Risk & Insurance - April 2012

INSIGHTS

Sponsor’s Message on Workers’ Compensation

Overall Pharmacy Spend Increased Only 3.2%,

Narcotics Utilization Dropped in 2011

PMSI’s 2012 Annual Drug Trends Report reveals latest industry insights

In the 2012 Annual Drug Trends Report, PMSI
reveals many insightful trends in workers’
compensation. The Report focuses on 10 notable
areas influencing pharmacy spend within PMSI’s
customer base and the industry as a whole, such
as Average Wholesale Price (AWP), Brand and
Generic Mix, Mail Order Utilization, and Narcotics
Utilization. Here’s a quick synopsis of some of the
more interesting findings:
Overall Pharmacy Spend Increased Slightly
But at a Rate Much Lower than AWP
Average spend per injured worker increased only
3.2% in 2011. Interestingly, this rate of increase
was far less than the 2011 average AWP increase
of 6.3%. AWP continued to be a major driver of
pharmacy cost increases, with an average brand
AWP increase of 3.9% and a generic AWP increase
of 8.3%.
Cost Savings from Mail Order Continued to
Outpace Retail

Mail order utilization continues to be a major cost containment program for pharmacy. The average mail order cost per day of supply in 2011 was approximately 21% less than the average retail cost per day of supply. As a result, every 10% shift in days of supply from retail to mail order during the year resulted in a 0.5% reduction in spend. PMSI’s clients continued to aggressively use mail order in 2011, and achieved an average mail order penetration of 27.5%.

Narcotics Utilization Decreased
In 2011, the use of narcotic analgesics decreased
by 1.7%, as measured by morphine equivalent
dose (MED) per injured worker per day. The
largest reduction occurred in the area of long-
acting narcotics, which saw a utilization decrease
of 68 mg to 64 mg MED per day.
Additionally, PMSI found a decrease in the use
of narcotic analgesics within the first year of
injury—a trend that has continued over the last
three years. The percent of injured workers using
narcotic analgesics in the first year after injury
dropped from 59% in 2010 to 57% in 2011, as
illustrated below.
Since narcotics make up more than a third of all
workers’ compensation prescriptions dispensed,
this decline demonstrates the effectiveness
of PMSI’s MedAssess™ clinical programs by
addressing issues with appropriate narcotic
selection, dose, and duration of therapy.

Changes in Utilization within the First Year After Injury

2012 Annual Drug Trends Report now available

Every year, PMSI analyzes the transactions from its book of business and reports the results in the Annual Drug Trends Report. This year’s report is a reliable resource for industry trends and also a testament to PMSI’s cost containment strategies and clinical programs.