2011 Workers Compensation Drug Trend Report. published april 2012 the express scripts research & new solutions LaB

Transcription

1 2011 Workers Compensation Drug Trend Report published april 2012 the express scripts research & new solutions LaB

2 Contents INTRODUCTION THERAPY CLASS REVIEW 2011 Highlights 1 Introduction 1 Driving Out Waste to Control Trend 2 Other Factors Driving Trend 3 Regulatory Landscape 4 Compounded Prescriptions 5 Solutions 6 Narcotic Analgesics 11 Anticonvulsants 12 NSAIDs 13 Dermatologicals 13 Antidepressants 14 Skeletal Muscle Relaxants 14 Looking Ahead 15 TREND OVERVIEW APPENDIX / NOTES Overview of 2011 Workers Compensation Trend 8 Age-of-Injury Effect 16 Home Delivery Efficiency Rating 17 Methodology 18 Notes 18 express scripts 2011 Workers compensation Drug trend report

3 2011 Highlights Overall spend decreased in 2011 for the second consecutive year. A 3.7% decrease in utilization, combined with a modest 1.5% increase in the cost per prescription, resulted in a total cost trend of -1.8%. Spend increased significantly in the dermatological therapy class, driven primarily by cost increases for a few widely used medications in the class. Overall spend for narcotic analgesics, the most-expensive therapy class, decreased in The increased cost of new narcotic medications was offset by a decrease in utilization in the class. Antidepressants, previously the third-most-expensive therapy class, dropped to fifth. Waste in workers compensation was $2.1 billion in Contributing factors included: Use of more-expensive brand-name prescription drugs Dispensing of medications through channels that are less efficient than home delivery Processing of prescriptions through out-of-network pharmacies and third-party billers Express Scripts offers insights and actionable solutions that can help clients drive waste out of their workers compensation pharmacy benefits while improving clinical safety and minimizing disruption. Introduction As an industry leader in understanding what drives drug trend and promoting evidence-based clinical care, Express Scripts has spent the last 20 years providing expertise in managing pharmacy benefits for clients and their injured workers. We currently manage prescriptions for injured workers in all 50 states. Our insights help clients navigate the complexities of state and federal regulations and make decisions about the pharmacy benefit that are both clinically appropriate and cost effective. Overall drug trend for Express Scripts Workers Compensation clients fell 1.8% in 2011 down for the second consecutive year. Although many factors contributed to the reduction in drug trend, the primary cause was our ability to drive out waste. 1 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / NOTES

4 Waste: Waste Any additional spend on pharmacy costs that provides no incremental gain in health outcomes. Driving Out Waste to Control Trend Waste in the workers compensation benefit can be partially attributed to behavior the active and passive decisions that injured workers and healthcare professionals make about which medications are prescribed and where and how those medications are obtained. Express Scripts focuses on three major causes of waste: Utilization of higher-cost medications when therapeutically equivalent, lower-cost alternatives are available Utilization of channels for prescription dispensing that are less optimal than home delivery Processing of prescriptions through out-of-network pharmacies and third-party billers These behaviors create $2.1 billion in waste per year for our clients and other workers compensation payers across the United States. Potential Savings from Optimal Drug Mix: $2 Billion What it is: Using expensive brand-name prescriptions creates waste when equally effective, lower-cost equivalents are available. There are many reasons why prescribers choose branded medications over generic alternatives, including habit and lack of awareness of generic alternatives. Injured workers can also increase costs by requesting brand-name medications instead of equally effective generic equivalents. Unintentional waste also can be created by workers compensation payers when, to limit potential disruption, they allow injured workers to continue using expensive prescriptions rather than make efforts to move workers to equally effective, lower-cost options. What is included: Savings represent waste that can be avoided by achieving optimal mix (i.e., the maximum, clinically appropriate generic fill rate for each therapy class). Eliminating it: State-level generic mandates and programs such as step therapy and the Express Scripts Physician Outreach Program, which encourage the use of generics each year can help eliminate $2 billion in waste due to suboptimal mix. Over the next few years, significant additional savings opportunities are likely as several popular brand-name drugs, such as Cymbalta (duloxetine), Celebrex (celecoxib) and Opana ER (oxymorphone extended release), lose patent protection. These three medications collectively contributed more than 10% of the per-userper-year spend in express scripts 2011 Workers Compensation Drug Trend Report

5 Potential Savings from Channel Waste: $40 Million What it is: Prescription drugs can be dispensed through a number of channels, including home delivery, retail pharmacies and physician offi ces. The use of home delivery for longterm medications, where appropriate, could erase $40 million per year in waste. Home delivery from the Express Scripts Pharmacy SM combines state-of-the-art technology with clinical expertise and purchasing power to ensure accuracy and cost-effectiveness, with a dispensing accuracy rate greater than 99.9% compared to 98.3% in retail. 1 What is included: Savings represent waste that can be avoided by increasing use of a home delivery pharmacy, resulting in better unit pricing and lower dispensing fees for prescriptions. Eliminating it: By leveraging programs that encourage the use of home delivery, such as Express Scripts Home Delivery Education, and reinforcing the use of home delivery during communications with injured workers, $40 million in annual waste could be eliminated while offering injured workers safer, more convenient access to their medications. Potential Savings from Eliminating Out-of-Network and Third-Party Biller Waste: $107 Million What it is: Medications used to treat acute work-related injuries and illnesses often are dispensed at a retail pharmacy. However, when injured workers use out-of-network pharmacies or do not notify an in-network pharmacy of their pharmacy benefi t manager (PBM), waste is generated through higher nonparticipating pharmacy charges and third-party biller costs. What is included: Savings represent waste that can be avoided by ensuring that prescriptions are fi lled at a retail network pharmacy and are processed directly to the PBM online, thereby avoiding a third-party biller. Eliminating it: By using network management strategies such as the Express Scripts ExpressComp National Network, First Fill program, pharmacy ID cards and Paper Bill Conversion program workers compensation payers could eliminate $107 million in annual waste. Exhibit 1 Third-Party-Biller and Out of Network 5% Other Factors Driving Trend Distribution of Potential Savings by Source of Waste Channel 2% Mix 93% In addition to the waste generated through suboptimal drug mix, use of a higher-cost channel and use of out-of-network pharmacies and third-party billers (Exhibit 1), several other factors and issues often contribute to rising costs for payers. They demand solutions that increase savings while enhancing medication safety for injured workers. Narcotics Abuse and Misuse The occupational injuries and illnesses that workers compensation benefits are designed to cover often result in acute (short-term) or chronic pain. The International Association for the Study of Pain defi nes chronic pain as pain that persists beyond normal tissue healing time, which is assumed to be 3 months. 2 Prescription narcotic medications, also called opioids, can provide significant pain relief for both acute and chronic pain when taken as prescribed, but their use involves balancing analgesia with several risks. One such risk is the potential for dependency and abuse. In addition to pain relief, narcotic medications can provide reinforcing effects, including reduced anxiety and aggression, as well as increased feelings of pleasure. 3 It is often these reinforcing effects that lead to dependency and substance abuse. Substance abuse produces a variety of desirable psychosocial effects but also comes with a direct financial cost. 3 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / NOTES

6 Studies have found that individuals who abuse pain medications use more healthcare resources than nonabusers. For example, opioid-abusers are 2.3 times more likely to have an emergency room (ER) visit than nonabusers. 3 In 2009 alone, 1.2 million ER visits were attributed to prescription-drug abuse. 4 Further, the Centers for Disease Control and Prevention (CDC) reported that narcotic prescription overdoses accounted for nearly 15,000 deaths in 2008, four times as many deaths as in Balancing the potential for abuse and misuse with the pain relief offered by narcotics presents a special challenge in managing this therapy class. Network Penetration/Third-Party Billing Managing out-of-network bills is an issue that nearly all workers compensation payers face. Paper bills for prescriptions fi lled at nonparticipating pharmacies and those processed by third-party billers create an additional administrative burden as well as higher prescription-drug costs. Express Scripts helps mitigate the impact of paper bills through our Paper Bill Conversion program, which saves money for clients by paying the pharmacy or biller on the client s behalf and, when possible, by encouraging pharmacies to submit future prescriptions online directly to Express Scripts. The program also ensures that all prescriptions, whether submitted for payment electronically or on paper, receive the same careful scrutiny for formulary and drug utilization review (DUR) edits. Repackaging/Dispensing by Physicians Additional costs may be incurred when medical providers dispense medications directly to injured workers. Because medications dispensed from a physician s offi ce typically are repackaged or relabeled, they often are not subject to the same pricing regulations as those dispensed by a pharmacy. In addition, these medications often lack the safety checks for possible drug interactions that are provided by the PBM and retail network pharmacies. A study of physician dispensing in Florida, where this practice is more widespread than in many other states (in part because of the state s fee schedule), provides insights into the impact on costs. A 2011 study by the Workers Compensation Research Institute found that the average payment per workers compensation prescription in Florida was 45% higher than the median payment of the 16 other states in the study. 6 In response, the Florida legislature proposed but eventually tabled a regulatory change to address medication repackaging, estimated to save the state $62 million annually in workers compensation costs. 7 In addition, recently enacted legislation that banned physician dispensing of schedule II (C-II) and schedule III (C-III) narcotics in Florida has resulted in a 97% drop in the dispensing of oxycodone, one of the most heavily used prescription narcotics dispensed from physician offices. 8 Regulatory Landscape Workers compensation is heavily regulated in an effort to protect workers, prevent fraud and facilitate injury claim processing, with differential effects on cost. Along with Florida, a number of other states implemented or were considering signifi cant regulatory changes in 2011, including the following: Texas implemented a closed formulary, in which some prescription drugs are always approved and others require prior authorization. Associated regulations allow payers to deny medication reimbursement retrospectively, adding a new dynamic to the review process. Texas also is considering reversing a ban on physician dispensing. Oregon now requires physicians to submit clinical justifi cation for prescribing certain medications. Maryland is considering a fee schedule and pharmacy guidelines. Alabama, Georgia and Nevada raised the reimbursement rates of their fee schedules. Case Studies Step Therapy Helps Clients Increase Generic Fill Rates While Decreasing Pharmacy Spend Client Goals: Control rising prescription-drug costs without disrupting injured workers. Solution: Implement a step therapy program. Results: After the first year of step therapy enrollment, this insurance carrier increased its generic fill rate (GFR) by more than 2% over the previous year. Home Delivery Education Pilot Boosts Conversions 53% Client Goals: Control rising prescription-drug costs by increasing the use of the Express Scripts Pharmacy. Solution: Add behavioral science messaging to existing Home Delivery Education materials. Results: This client increased home delivery conversions by 53%; enhanced letter became the new standard. New Innovation Increases Generic Fill Rate 2.3% and Saves More Than $200,000 Client Goals: Control rising prescription-drug costs without disrupting injured workers. Solution: Add a single-source brand component to the Physician Outreach Program. Results: This client increased GFR 2.3% and saved more than $200, EXPRESS SCRIPTS 2011 WORKERS COMPENSATION DRUG TREND REPORT

7 Express Scripts closely follows the workers compensation regulatory landscape across the country and is committed to helping our workers compensation clients comply with federal and state pharmacy regulations while driving out waste. Compounded Prescriptions A compounded prescription is one that is not available commercially in the strength, dosage, form or exact combination needed by the patient. For example, a pain medication might be compounded so it can be applied directly to the skin. Compounding requires the dispensing pharmacist to mix two or more products with unique National Drug Codes (NDCs) to create a fi nal drug product. However, many compounds contain ingredients that are also available as standard, commercially prepared products in a similar dosage. Because of the time, effort and expertise necessary for pharmacists to create compounded products, their associated costs are often much higher than those of a standard product. Compounded medications have had double-digit cost trends since 2008 (Exhibit 2). Per-user-per-year costs for compounds increased 13.7%, to $1,872, in Exhibit 2 Per-User-Per-Year Cost for Compounded Medications, $2,000 $1,600 $1,200 $800 $400 $ If commercially available medications were used for just two of the most widely prescribed topical compounds in workers compensation diclofenac and capsaicin the potential savings would be very significant. Several forms and strengths of diclofenac a nonsteroidal anti-infl ammatory drug (NSAID) (Exhibit 3) are available as brand-name, commercially prepared, topical products. However, diclofenac often is compounded for other, non-commercially prepared strengths. As shown in Exhibit 3, the average 2011 price for a compounded version of diclofenac was $720; the cost of a commercially available alternative was only $192 per prescription a savings of $528. Similarly, the average cost for a compounded formulation of capsaicin a topical derivative of hot chili peppers used to manage pain was nearly $750, but the average cost per prescription of a similar, commercially available product could be as much as 95% less. $800 $600 $400 $200 Exhibit 3 $0 Potential 2011 Savings Per Prescription for Two Key Compounds $528 $192 DICLOFENAC Commercially Available Alternative $722 $25 CAPSAICIN Savings vs. Compounded Product 5 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / NOTES

8 Solutions Express Scripts is committed to developing evidence-based solutions to eliminate wasteful pharmacy spend and to address key industry challenges (Exhibit 4). All PBMs can help control workers compensation costs using proven tools, including network and utilization management and generic conversion. 9 Express Scripts goes a step further by using in-depth research, advanced analytics and real-world testing to develop solutions to meet the challenges that face our clients. This unique approach, combined with our dedicated, highly experienced workers compensation team, helps clients better understand and manage the pharmacy contribution to their overall medical costs while ensuring that injured workers receive clinically appropriate care. Exhibit 4 Express Scripts Workers Compensation Programs and Services Program Description Result FORMULARY MANAGEMENT Standard Formulary Injury-Specifi c Formulary Includes medications that focus on short-term management of acute-care complaints, trauma and complications such as infections, as well as medications that manage long-term pain and address long-term complications associated with permanent disability cases Limits formulary status to medications that are more appropriate to an injured worker s specific injury, such as burns and eye trauma Safety, efficacy, cost control Safety, efficacy, cost control of inappropriate prescriptions CLINICAL AND TREND MANAGEMENT Concurrent Drug Utilization Review (DUR) Retrospective DUR Prior Authorization (OASIS) Step Therapy Identifi es potential problems at the point of service with the injured worker s prescription that could impact care, potentially resulting in an adverse drug event Analyzes potential problems of fraud and abuse after a prescription is dispensed and communicates additional system checks to prescribers Using OASIS, the Express Scripts proprietary, automated, web-based tool, payers determine whether prescribed medications not on the formulary should be covered Encourages physicians, through point-of-sale edits, to prescribe step-one medications (usually generics) before higher-cost brand-name drugs Increased safety for injured workers, deterrence of fraud and abuse at the point of service Increased safety for injured workers, deterrence of fraud and abuse Cost control with minimal disruption Increased GFR, cost control 6 express scripts 2011 Workers compensation Drug trend report

9 CLINICAL AND TREND MANAGEMENT CHANNEL MANAGEMENT Program Description Result Physician Outreach Program ScriptAlert Pharmacist Drug Review (PDRx) Fraud, Waste and Abuse Drug Testing Support Physician Peer-to-Peer Home Delivery Education ExpressComp Network Paper Bill Conversion Educates physicians who prescribe multisource brands as dispense as written (DAW1) or select single-source brands when effective generic alternatives are available and asks them to consider the alternatives, if appropriate for the patient Identifi es potentially inappropriate patterns of medication use and evaluates the need for interventions such as case management, independent medical examinations and peer-to-peer conversations Details drug therapy problems, proposed alternative drug therapies and desired clinical outcomes in formal written reports based on a licensed pharmacist s professional review of an injured worker s entire medication file using established medical practice guidelines A multidisciplinary team coordinates advanced analytics and investigative outreach to physicians, pharmacies and injured workers to verify the validity of prescriptions and detect and deter potentially fraudulent activity By providing data and analytical support, assists clients who utilize drug-testing vendors to improve the efficacy of existing drug-testing programs and provides greater clinical insight As an extension to existing programs, provides consultative outreach to prescribing physicians through the escalation of drug-therapy concerns among injured workers Communicates with injured workers to help facilitate the transfer of prescription(s) to the Express Scripts Pharmacy, from which injured workers receive up to a 90-day supply, set up automatic refills and benefit from % dispensing accuracy Provides access to our network of more than 54,000 retail pharmacies in all 50 states, which is fully integrated with the Express Scripts Pharmacy and our clinical programs Pays pharmacies and third-party billers on behalf of our clients to maximize savings; provides outreach to all parties to convert future prescriptions to online submission to Express Scripts when permissible Increased GFR, cost control Safety, efficacy of treatment Safety, efficacy, cost control Fraud deterrence, cost control Safety, fraud detection, deterrence Safety, narcotic abuse prevention Increased adherence, safety, cost control Safety, fraud deterrence, abuse prevention, cost control Increased network penetration, client savings 7 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / NOTES

10 Overview of 2011 Workers Compensation Trend The top six therapy classes represented 76.2% of total drug spending in As shown in Exhibit 5, drug spend actually decreased 1.8%, reflecting a 3.7% decrease in per-userper-year utilization that more than offset a 1.5% increase in the cost per prescription. As expected, narcotic analgesics had by far the highest per-user-per-year cost, despite slightly negative trends in utilization and the cost per prescription (Exhibit 5 and 6). Increasing by 7.4%, dermatologicals had the highest per-user-per-year cost trend. OxyContin (oxycodone extended release) had the highest per-user-per-year cost and accounted for 10.1% of total workers compensation drug spend in 2011 (Exhibit 7). Exhibit 5 Components and Drivers of Trend for the Top Six Therapy Classes Ranked by 2011 Overall Per-User-Per-Year (PUPY) Cost COST/RX UTILIZATION NEW DRUGS OVERALL Therapy Class Average Trend Avg. Rx/User Trend PUPY Cost Trend PUPY Cost Trend Narcotic Analgesics $ % % $ % $ % Anticonvulsants $ % % $ % $ % NSAIDs $ % % $ % $ % Dermatologicals $ % % $ % $ % Antidepressants $ % % $ % $ % Skeletal Muscle Relaxants $ % % $ % $ % Top 6 Therapy Classes $ % % $ % $1, % Other Therapy Classes $ % % $ % $ % Total $ % % $ % $1, % 8 express scripts 2011 Workers Compensation Drug Trend Report

11 Exhibit 6 $600 $500 $400 $300 $200 $100 $ Top Six Therapy Classes by Percentage of Total PUPY Cost NARCOTIC ANALGESICS ANTICONVULSANTS DERMATOLOGICALS NSAIDs ANTIDEPRESSANTS SKELETAL MUSCLE RELAXANTS PUPY Cost Percentage of Total PUPY Cost 40% 35% 30% 25% 20% 15% 10% 5% 0% 9 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / NOTES

12 Exhibit 7 Market Share and Trend Components for the Top 15 Medications Ranked by 2011 PUPY Spend Rank Medication PUPY Spend 1 OxyContin (oxycodone extended release) % of Total Spend PUPY Spend Change from 2010 TREND Cost/Rx Utilization Total $ % -$ % -5.7% -6.2% 2 Lidoderm (lidocaine transdermal) $ % $ % -1.9% 2.9% 3 Lyrica (pregabalin) $ % $ % -8.5% 2.2% 4 hydrocodone and acetaminophen $ % -$ % -1.7% -0.3% 5 Cymbalta (duloxetine) $ % $ % 3.7% 12.6% 6 Celebrex (celecoxib) $ % -$ % -8.8% -2.3% 7 Opana ER (oxymorphone extended release) $ % $ % 29.0% 52.3% 8 fentanyl $ % -$ % -1.6% -1.4% 9 gabapentin $ % $ % 7.2% 2.0% 10 Kadian (morphine extendedrelease capsules) $ % -$ % -6.0% -0.4% 11 oxycodone and acetaminophen $ % $ % 5.1% 0.8% 12 tramadol $ % $ % 13.7% 3.4% 13 Flector (diclofenac transdermal) $ % $ % -1.4% 4.5% 14 cyclobenzaprine $ % $ % 7.9% 31.1% 15 oxycodone $ % -$ % 0.8% -28.6% 10 express scripts 2011 Workers Compensation Drug Trend Report

13 Therapy Class Review Narcotic Analgesics Given the nature of most work-related injuries, prescriptions for narcotic analgesics continue to account for the most spend and are the most utilized by the injured worker population. Aside from their generally high cost, prescription drugs in this class may be problematic because tolerance to their effects develops over time, usually requiring increasingly higher dosages to control pain. Significant risks also are associated with dependence on or misuse of narcotics. Although the percentage of Americans who abuse prescription drugs remained at about 2.7% between 2002 and 2010, abuse still affects about 7 million individuals monthly. 10 Costs for ER visits, substance abuse treatment and additional medical care can add up significantly. One potential solution will come in the form of abuse-resistant formulations of narcotics such as OxyContin (oxycodone extended release). Oxecta (oxycodone immediate release) was approved by the U.S. Food and Drug Administration (FDA) in 2011, and other abuse-deterrent products are in development as well. These medications have the potential to minimize misuse and drastically alter utilization patterns in the coming years. Although the narcotic analgesics class accounted for 38.1% of the cost and 34.0% of the utilization for all workers compensation prescription-drug claims among our clients in 2011, overall per user spend for the class decreased 3.6%. Generic hydrocodone and acetaminophen, which commands the greatest market share, increased only modestly in average cost per prescription in Among the top five medications in the class, the only brand medication was OxyContin. Market Share Cost/Rx Cost/Rx Trend Medication hydrocodone and acetaminophen 41.3% 42.2% $ $ % tramadol 8.6% 10.2% $ $ % oxycodone and acetaminophen OxyContin (oxycodone extended release) 6.1% 6.2% $ $ % 6.2% 6.0% $ $ % oxycodone 5.0% 5.3% $ $ % $ $ % Cost PUPY #Rx PUPY Average Cost/Rx TREND 11 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / NOTES

14 Narcotic Analgesics continued Anticonvulsants Exhibit 8 oxycodone 40.2% codeine 0.5% 2011 Narcotic Active Ingredient Cost Share tramadol 5.7% fentanyl 14.3% other 8.0% hydrocodone 12.8% morphine sulfate 9.4% oxymorphone 9.2% Anticonvulsants are indicated for controlling seizures, and many have additional clinical indications. Examples include Lyrica (pregabalin), approved for neuropathic pain and fi bromyalgia, and Topamax (topiramate), prescribed for conditions such as migraine headaches. The overall spend for anticonvulsant medications was down 0.9%, accounted for by a 2.5% decrease in per-user-per-year prescriptions that more than offset a 1.6% increase in the cost per prescription. As in 2010, the generic for Neurontin, gabapentin, was the most highly utilized medication in this therapy class in Although its use increased 7.2%, its total trend was only 2.0%, due to a reduction of 4.9% in the cost per prescription. Lyrica, had the highest per-user-per-year cost in this class for the second consecutive year, was the only brand-name drug in the top five by market share. Trend for Lyrica increased 2.2%. Despite an 11.7% increase in the cost per prescription, Lyrica s overall trend was controlled through an 8.5% decrease in utilization. The Express Scripts step therapy and physician outreach programs both encourage the use of gabapentin as a generic alternative to Lyrica. Market Share Cost/Rx Cost/Rx Trend Medication Whereas most ingredients share of cost remained relatively constant from 2007 to 2011, fentanyl decreased 14.1 percentage points, to 14.3%, due to the availability of generics, and oxycodone increased 5.1 percentage points, to 40.2%. gabapentin 37.6% 41.3% $ $ % Lyrica (pregabalin) 32.9% 30.8% $ $ % clonazepam 10.1% 9.6% $ $ % topiramate 6.4% 6.2% $ $ % lamotrigine 1.8% 1.8% $ $ % $ $ % Cost PUPY #Rx PUPY Average Cost/Rx TREND 12 express scripts 2011 Workers compensation Drug trend report

15 NSAIDs Given their ability to reduce pain and infl ammation, nonsteroidal anti-infl ammatory drugs (NSAIDs) are the second-most widely utilized category of medication for workrelated injuries and illnesses, and the third in terms of per-user-per-year cost. The top five medications ranked by per-user-per-year cost accounted for 70.9% of total spend in the NSAID therapy class in Celebrex (celecoxib), the only brand-name NSAID in the top five drugs, had a 21.8% market share in 2011, with its cost per prescription increasing 7.1%. The overall class spend increased 1.3%, resulting from a 2.8% increase in cost and a 1.5% decrease in utilization. Market Share Cost/Rx Cost/Rx Trend Medication ibuprofen 27.3% 27.4% $ $ % Celebrex (celecoxib) 23.5% 21.8% $ $ % naproxen 13.4% 13.6% $ $ % meloxicam 11.5% 12.2% $ $ % diclofenac 4.6% 4.9% $ $ % $ $ % Cost PUPY #Rx PUPY Average Cost/Rx TREND Dermatologicals The dermatological class includes steroids, antibiotics, anti-acne products, antifungals and pain relievers dispensed in forms (e.g., creams, gels, ointments, patches) that are applied directly to the skin. Dermatologicals can treat skin conditions or deliver medications to treat painful bruises and muscle strains. Often available as generics, many older dermatological products also have nonprescription versions. Frequently, a dermatological medication is used at the same time as an oral medication to reduce pain in different ways. Spend for the dermatological class rose 7.4%, fueled by increases in both cost (5.3%) and utilization (1.8%). The top three medications in the therapy class ranked by peruser-per-year cost, accounted for 79.7% of the utilization and 89.9% of the costs in this therapy class. The patches, Lidoderm (lidocaine transdermal) and Flector (diclofenac transdermal), are more convenient to use than other topical dosage forms, but they average $342 and $285 per prescription, respectively. Lidoderm alone accounted for almost one-half of the utilization and more than two-thirds of the total cost in the class. Utilization for Voltaren Gel (diclofenac gel), which may be used alone or in compounded medications, increased, pushing up trend as well. Market Share Cost/Rx Cost/Rx Medication Trend Lidoderm (lidocaine transdermal) 50.2% 48.3% $ $ % Voltaren Gel (diclofenac gel) 14.3% 16.3% $ $ % Flector (diclofenac transdermal) 15.7% 15.1% $ $ % Pennsaid (diclofenac topical solution) 0.7% 2.0% $ $ % mupirocin 1.4% 1.5% $ $ % $ $ % Cost PUPY #Rx PUPY Average Cost/Rx TREND 13 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / NOTES

16 Antidepressants Selective serotonin reuptake inhibitors (SSRIs) and serotonin-norepinephrine reuptake inhibitors (SNRIs) usually are prescribed to treat depressive and other mood-related disorders. Because they affect the central nervous system, however, many of them have indications for other conditions, such as insomnia and anxiety. 11 Additionally, specific types of antidepressants may be prescribed to manage pain conditions. One example is Cymbalta (duloxetine), an SNRI, which recently gained approval to treat neurologic pain, musculoskeletal pain and osteoarthritis. In such cases, antidepressants may be prescribed in lieu of or in addition to an analgesic drug, particularly if depression is also present. Trend for the antidepressant class was 1.5%, refl ecting a 5.5% increase in prescription cost and a 4.0% decrease in utilization. Skeletal Muscle Relaxants Although indicated for the short-term relief of muscle spasms, skeletal muscle relaxants also may be used off-label without approval from the FDA for fibromyalgia and other conditions. Although medications in this class generally are recommended for short, intermittent courses of therapy, many injured workers take them continuously. Some muscle relaxants are classified as controlled substances due to their potential for addiction and abuse. The 2011 spend for the class dropped 10.9%, due to decreases of 6.1% in cost and 5.1% in utilization. Accounting for 42.4% of the total spend for skeletal muscle relaxants in 2011, the top fi ve medications by market share all were generics. In 2011, two of the fi ve most frequently used medications Cymbalta and Lexapro (escitalopram) claimed 34.6% of market share. The three prescription drugs with the greatest per-user-per-year costs Cymbalta, venlafaxine extended release and Lexapro accounted for 67.0% of costs in this therapy class. Market Share Cost/Rx Cost/Rx Medication Trend Cymbalta (duloxetine) 24.5% 26.4% $ $ % amitriptyline 12.3% 12.0% $ $ % trazodone 9.6% 9.7% $ $ % Lexapro (escitalopram) 8.8% 8.2% $ $ % sertraline 6.7% 6.3% $ $ % Market Share Cost/Rx Cost/Rx Trend Medication cyclobenzaprine 30.2% 34.3% $36.17 $ % carisoprodol 21.6% 20.3% $24.85 $ % tizanidine 11.1% 12.2% $61.40 $ % methocarbamol 6.9% 7.6% $27.02 $ % baclofen 7.2% 7.4% $38.91 $ % $ $ % Cost PUPY #Rx PUPY Average Cost/Rx TREND $ $ % Cost PUPY #Rx PUPY Average Cost/Rx TREND 14 express scripts 2011 Workers compensation Drug trend report

17 Looking Ahead Express Scripts is carefully investigating injured workers behaviors related to their decisions about medication use including generics, narcotics and channel. Other important issues under study include prescriber behavior and the impact of various programs on workers compensation costs and outcomes. Solutions developed in The Express Scripts Research & New Solutions Lab are informed by an ongoing pipeline of pilot programs and studies rooted in the applied behavioral sciences. During 2011, we worked on developing and launching pilots to increase generic medication use and home delivery penetration among injured workers. Currently, we are actively engaged in designing and conducting additional pilots and evaluating their effect. We firmly believe that employing cross-functional, multidisciplinary teams of experts is the best way to develop evidence-based solutions that will result in enhanced savings opportunities for payers and contribute to the treatment outcomes of injured workers. 15 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / NOTES

18 Appendix / Notes Exhibit 9 Average Billed Ingredient Cost and Adjusted Generic Fill Rate by Age of Injury Appendix 1: How Two Express Scripts Programs Can Help Payers Control Costs Related to the Age-of-Injury Effect The longer an injured worker continues to take medication for an injury, the more the costs rise. This direct relationship with cost is one aspect of a phenomenon called the age-of-injury effect. An analysis of prescription data from Express Scripts Workers Compensation clients found that the average cost per prescription during the fi rst year of treatment is approximately $ By the third year of drug treatment, the cost per prescription doubles, and then triples by the ninth year. The 2011 data show that costs level off at an average of $ per prescription, approximately 11 years post injury. From an average cost per prescription of $48.20 in the first year of an injured worker s treatment, the cost per prescription doubles by the third year of treatment and then triples by the ninth year. Age of injury also has a relationship with the generic fi ll rate (GFR): as the age of injury increases, the GFR declines. In the fi rst year of injury, the GFR is 89.6%; by year three, the GFR drops to 76.6%; and by year nine, it is 68.7%. At year 11 after injury, the GFR is 66.6% nearly 23% lower than the GFR in the first year of injury. These two relationships the direct relationship between time post injury and the average cost per prescription, and the inverse relationship between time post injury and the GFR are shown in Exhibit 9. $160 $140 $120 $100 $80 $60 $40 $20 $ Years Post Injury Average Cost Per Rx Adjusted Generic Fill Rate Possible explanations for these two relationships are as follows: 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% As additional time elapses after the injury, injured workers have the potential to be prescribed more expensive or higher doses of medications. If fi rst-line treatments (usually generics) are inadequate, the prescribing physician is likely to move the injured worker to other, more-costly treatments. If further health issues or complications from the injury become apparent over time, additional medications may be prescribed. When a new brand-name drug enters the market, the physician may switch the injured worker to the new medication if there is reason to believe it will provide additional benefi t. 16 EXPRESS SCRIPTS 2011 WORKERS COMPENSATION DRUG TREND REPORT

19 Two Express Scripts Workers Compensation programs can benefi t payers who struggle to contain the costs of aging claims. Our Pharmacist Drug Review (PDRx) program provides a clinical pharmacist s analysis of an injured worker s therapy. With PDRx, the payer has a comprehensive view when reviewing an injured worker s treatment. Along with PDRx, clients can leverage our consultative Physician Peer-to-Peer program to help address the challenges and potential substance abuse associated with longterm claims. This program facilitates a conversation between an independent physician who reviews the injured worker s claim and the prescribing physician to ensure that the medication therapy is clinically appropriate and adequately considers available generic equivalents. Appendix 2: Home Delivery Effi ciency Rating The use of a home delivery pharmacy like the Express Scripts Pharmacy SM which has a proven record of safer, more accurate dispensing and higher use of clinically appropriate, less-expensive generics and step-one medications than retail is an important way to drive out waste. The home delivery penetration (HD penetration) rate is frequently used to calculate the proportion of all prescriptions fi lled via the home delivery channel. However, this home delivery penetration rate assumes that all prescriptions could be filled by home delivery and therefore includes many prescriptions for which home delivery might not be the best choice for example, prescriptions for schedule II (C-II) narcotics and one-time-only/limited-duration prescriptions such as antibiotics. In an effort to provide a more accurate picture of home delivery utilization, Express Scripts has created the home delivery effi ciency rate (HD effi ciency), which targets only those prescriptions for which home delivery is the most cost-effi cient, clinically appropriate choice. Home Delivery Pentetration Metric Equation HD Penetration = Total Number of Prescriptions Filled via Home Delivery Total Number of Prescriptions Home Delivery Effi ciency Metric Equation HD Effi ciency = Total Number of Prescriptions Filled via Home Delivery Total Number of Prescriptions Appropriate for Home Delivery Exhibit 10 shows how the rates for HD penetration and HD efficiency compare using the Express Scripts Workers Compensation book of business data for fourth-quarter Whereas the HD penetration rate shown is 5.7%, the HD efficiency rate is 15.4% nearly three times higher and a much more accurate measure of actual home delivery utilization. Exhibit 10 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Home Delivery Penetration Rate Compared to Home Delivery Efficiency Rate, Fourth Quarter % HD Penetration 15.4% HD Efficiency 17 INTRODUCTION TREND OVERVIEW THERAPY CLASS REVIEW APPENDIX / / NOTES

20 Appendix 3: Methodology When calculating trend and waste, prescription-drug use was considered for clients with a stable injured worker base. We defi ned a stable worker base as one whose user volume changed less than 50% between 2010 and Nonprescription medications and prescriptions that were dispensed in hospitals, long-term care facilities and other institutional settings were not included in our analysis. Utilization, determined on a peruser-per-year basis, was calculated by dividing the total number of 30-day adjusted prescriptions by the total number of users in a year. Prescription-drug costs included ingredient costs, taxes, administrative fees and dispensing fees. POTENTIAL SAVINGS FROM OPTIMIZING CHANNEL: We estimated the impact of moving all recurring (three or more refi lls) prescriptions currently dispensed in retail pharmacies to home delivery at the highest clinically appropriate and practical rate. The direct effect of this movement is a reduction in the unit cost as well as the dispensing fee. POTENTIAL SAVINGS FROM OPTIMIZING DRUG MIX: The impact of moving brand-name prescriptions to generics, when possible, was estimated by applying the average unit savings from generic use over brand-name use to all eligible brand-name prescriptions. We determined the savings associated with moving from the current generic fi ll rate (GFR) to the maximum GFR; this calculation was made separately for each therapy class, as determined from a review of the peer-reviewed scientifi c literature about clinically appropriate and practical GFR. Direct effects are reductions in the unit cost. ADDRESSING OUT-OF-NETWORK WASTE: For prescriptions that originated from a third-party biller, we estimated the waste resulting from insufficient claim-processing information that would be mitigated by fi lling prescriptions in network rather than through a third-party biller. Out-of-network waste was calculated as the difference between the average ingredient cost of the in-network claims and the average ingredient cost of the out-of-network claims. EXTRAPOLATION TO NATIONAL ESTIMATES: Using internal Express Scripts data on waste per injured worker, we extrapolated pharmacy-related waste to the entire country based on the estimated number of injured workers eligible for workers compensation benefits in the United States. 12,13 Notes 1. Research by Express Scripts Operational Department. 2. Elliott AM, Smith BH, Penny KI, Smith WC, Chambers WA. The epidemiology of chronic pain in the community. Lancet. 1999;354(9186): Stanos S. Implications on managed care in managing undertreated chronic pain. J Manag Care Med. 2011;14(2): Substance Abuse and Mental Health Services Administration, Center for Behavioral Health Statistics and Quality. The DAWN report: Highlights of the 2009 Drug Abuse Warning Network (DAWN) findings on drug-related emergency department visits. December Available at: oas.samhsa.gov/2k10/dawn034/edhighlights.htm. Accessed February 16, Centers for Disease Control and Prevention (CDC). Vital signs: overdoses of prescription opioid pain relievers United States, MMWR 2011;60: Available at: cdc.gov/mmwr/pdf/wk/mm60e1101.pdf. Accessed February 21, Workers Compensation Research Institute. Prescription Benchmarks for Florida: 2nd Edition. July Available at Accessed January 23, Florida House of Representatives. Staff analysis of CS/HB 511: Workers Compensation. Florida State Legislature, 2011 session. Available at: senate.gov/session/ Bill/2012/0511/Analyses/IAGaH4S5DYVyH6mTbbaN4rbaL4c= 11/Public/Bills/ /0511/ Analysis/h0511c.HHSC.PDF. Accessed February 23, Hiassen S. Sales of oxycodone by doctors fall in Florida. The Miami Herald. January 31, Available at html. Accessed February 13, Ivy, Jenny. Eight ways a PBM program can control workers comp costs. Benefi ts Selling Magazine. May Available at tspro.com/2010/05/01/eight-ways-a-pbm-programcan-control-workers-comp-costs. Accessed January 23, Substance Abuse and Mental Health Services Administration. Results from the 2010 National Survey on Drug Use and Health: Summary of national findings. NSDUH Series H-41, HHS Publication No. (SMA) Rockville, MD: Substance Abuse and Mental Health Services Administration, Ables AZ, Baughman OL. Antidepressants: Update on new agents and indications. Am Fam Physician. 2003;67(3): Biddle J, Roberts K. Claiming behavior in workers compensation. J Risk Ins. 2003;70(4): Fan ZJ, Bonauto DK, Foley MP, Silverstein BA. Underreporting of work-related injury or illness to workers compensation: Individual and industry factors. J Occup Environ Med. 2006;48(9): express scripts 2011 Workers compensation Drug trend report

21 The 2011 Workers Compensation Drug Trend Report: Authors / Contributors Authors Sharon Frazee, PhD Rochelle Henderson, PhD Contributors Julie Cain Patrick Donnelly Dave Edwards Francie M. Futterman Andy Hahn Jennifer Kaburick, RN Kris Kotoucek Alexei Makarkin Amy Monshausen Kamyar Nasseh, PhD Andrew Richmond Sarah Randolph, PharmD Yuhong Tian, PhD Anna Vlahiotis The authors would like to thank the many other individuals throughout the Express Scripts organization who contributed time and insight toward the completion of the 2011 Worker s Compensation Drug Trend Report.

22 Download the 2011 Workers Compensation Drug Trend Report Express Scripts is committed to following, promoting and implementing sustainable practices. We apply global sustainability principles to the way we do business and the way we fulfill the needs of clients, patients and employees. Express Scripts is committed to proactively balancing economic development with environmental stewardship and social development, and operates its business in a manner that respects the environment and conserves natural resources. We uphold our commitment to environmental stewardship by printing this report using solvent-free inks on papers that are certifi ed by the Forest Stewardship Council (FSC ). The interior of this publication was printed on stock that has 30% post-consumer waste content, and was produced by a certifi ed Sustainable Green Printing (SGP) facility. The electricity used to produce this book has been offset 100% with Missouri wind energy credits procured from the Ameren Missouri Pure Power program Express Scripts Holding Company. All Rights Reserved Express Scripts One Express Way St. Louis, Missouri Express-Scripts.com