Effective December 26, 2012, Michigan changed the reimbursement rules to set the prices for physician-dispensed prescription drugs to 90 percent of the average wholesale price (AWP) of the original drug used in the repackaging process, plus a dispensing fee. The new rules explicitly require that dispensing physicians provide the underlying National Drug Code (NDC) of the original drug. Michigan’s reform was aimed at reducing the prices paid for physician-dispensed prescriptions while continuing to allow physicians to dispense drugs they prescribe to their patients. As of June 2016, 20 states have made changes to rules governing physician dispensing.
As part of a series of WCRI studies that examine the impact of physician dispensing reforms, this report presents the results of the price-focused reform in Michigan on the frequency and costs of physician dispensing in Michigan. The analysis is based on detailed transaction data for physician- and pharmacy-dispensed prescriptions filled by injured workers up through the first quarter of 2014 that capture 15 months of post-reform experience. With additional data over a longer time period, we will examine the subsequent effects of the reform.
Monitoring Michigan Reforms on Physician Dispensing. Dongchun Wang, Vennela Thumula, and Te-Chun Liu. July 2016. WC-16-49.
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