California Workers' Comp Drug Formulary Would Reduce Costs, Study Shows

The CWCI analysis, which is available to members and subscribers of the group in the research section of the institute’s website or for purchase through the CWCI store, examines the impact of the proposed formulary on current prescribing patterns and the workers’ comp medical dispute resolution process. CWCI researchers modeled 650,000 prescriptions and other proprietary databases against the terms of the proposed regulations.

One finding that stands out in the study is that 31 percent of the prescription drugs dispensed to California injured workers last year are on the proposed exempt drug list and could be dispensed without pre-authorization.

Drugs on the exempt list include anti-inflammatories and ulcer related drugs, which are considered low risk.

Swedlow said exceptions like this could help reduce pressure on the state’s independent medical review and utilization review processes.

“What we found was about one-in-five utilization reviews are for these exempt drugs, so we would experience some reductions in that category of utilization review,” Swedlow said.

Prior CWCI studies have shown that nearly 45 percent of URs and nearly half of IMRs were for pharmaceuticals.

The proposed formulary exempts 15 “special-fill” drugs, which allow a four-day supply following an injury if prescribed or dispensed at the first medical visit within seven days, and 14 perioperative drugs that can be dispensed four days prior to surgery and up to four days after surgery.

The authors of the study say the proposed formulary will help ensure that drugs provided to injured workers meet evidence-based medicine standards while reducing disputes over prescription drug requests.

An analysis of SB 1124 conducted as the bill worked its way through Legislature drew upon existing formularies in Texas and Washington as examples.

The Texas formulary was phased in beginning in 2011, and it had an immediate impact. In the first year, non-formulary drug payments fell by 82 percent, according to the analysis.

Washington implemented its formulary in 2004, and it also had a significant effect on the utilization and cost of workers’ comp prescription drugs, according to the analysis, which drew on a 2011 WCRI study that found average prescription payme