Prescription Benchmarks for Washington

Abstracts

Prescription Benchmarks for Washington

Rapid growth of costs for prescription drugs for injured workers in some states is a major issue for policymakers, but not in Washington State where costs were among the lowest compared to 17 other states, according to a new study by Workers Compensation Research Institute (WCRI).

WCRI’s study, Prescription Benchmarks for Washington, points out several state policies and programs that may have allowed Washington to keep prescription costs low — 40 percent lower than the median state, including:

A formulary of approved drugs and therapeutic interchange,
Lower then typical pharmacy fee schedule,
Mandatory generic substitution, and
Infrequent physician dispensing.

The study also provides a wealth of detailed price and utilization statistics that may be useful when debating such issues as: pharmacy fee schedules, physician prescribing patterns, medical cost drivers, and laws that mandate the use of generics.

The data used for interstate comparisons covers prescriptions for claims with injuries occurring in 2006 and includes all prescriptions through March 2008. Reader should be cautioned that the results based on 24 months of experience understate the ultimate values of the metrics that depict quantities and costs.

Questions Addressed:

How do the costs, prices and use of prescriptions in Washington compare to the 17 states in WCRI’s forthcoming Prescription Benchmarks, 2^nd Edition?
What state policies and programs help explain the lower prescription prices in Washington?
How important is physician dispensing in Washington?

Sample of Major Findings:

The average prescription cost per claim in Washington was 40 percent lower than the median of the 17 states in the second edition of the WCRI prescription benchmarks—after adjusting for the longer claim duration. Without this duration adjustment, the average prescription cost per claim was 11 percent lower than the 17-state median.
The average price per pill paid to Washington pharmacies was 35 percent lower than the median state as a result of state policies and programs, such as: a formulary of approved drugs and therapeutic interchange, lower than typical pharmacy fee schedule, and mandatory generic substitution.
Physicians in Washington more often prescribed stronger, Schedule II narcotics, compared to physicians in the other study states.

Prescription Benchmarks for Washington. Dongchun Wang and Te-Chun Liu. July 2011. WC-11-33.

955 Massachusetts Avenue Cambridge, Massachusetts 02139 617-661-WCRI (9274)