2019 Drug Trend Report
Each year, myMatrixx releases our Drug Trend Report to track the utilization and costs of pharmaceuticals used in workers’ compensation cases. The future is always uncertain, but by looking back at the previous year and performing an in-depth analysis of available drug data, we can better help our partners understand the primary factors driving the industry. For 2019, we’ve identified several significant trends, including some good news in the form of lower overall spending in workers’ compensation plans — despite rising drug prices.
Key figures we found include:
- A 6.1% decline in total drug spending for payers with plans managed by myMatrixx
- A 0.4% net decrease in drug spend thanks to effective pharmacy management that more than offset a slight increase in utilization
- Nearly 50% of myMatrixx payers spent less on drugs in 2019 than in 2018
Drug spend declines continued for our workers’ compensation payers
While rising prescription drug prices continued to dominate the headlines last year, myMatrixx once again delivered a decrease in drug spending to payers. In fact, overall spending on drugs declined 6.1% compared to 2018, and total medication dispensed decreased 4.3%. This could be attributed to effective pharmacy management by myMatrixx and other factors such as fewer workers’ compensation claims, and enhanced prescription drug monitoring programs, prescriber education and state mandated formularies and treatment guidelines.
Another measure of drug trend is utilization by days’ supply per injured patient, which increased 1.9% in 2019, even as total utilization declined. This apparent discrepancy is due to the age of claim effect, which reveals that claimants with 10+ years of drug utilization have almost seven times greater days’ supply of medication than claimants during their first year following an injury. So while a decline in new claimants reduces overall utilization, it also increases average utilization per injured patient as older claims become more predominant. This utilization trend is the reason we designed the myMatrixx myRxAdvocateSM program to monitor, intervene and report on the entire life of a claim.
In 2019, payers with a workers’ compensation program managed by myMatrixx experienced a 6.1% decline in total costs and a 4.3% decrease in number of prescriptions. Per injured patient, prescription drug costs decreased 2.4%, while utilization increased 1.9%.
Keeping the downward pressure on opioids
In 2019, myMatrixx delivered a 10.7% decline in opioid spending and a 2.4% reduction in cost per days’ supply through utilization management. In fact, 73.1% of payers spent less on opioids in 2019 versus 2018, the fifth consecutive year of declining opioid spend – down 45.1% overall since 2015. The success in the battle against opioid abuse is the result of multiple strategies, including our pharmacovigilance program, state PDMP programs, the FDA REMS program, provider awareness and education. Our targeted clinical pharmacy interventions are helping many clients realize 0% opioid utilization for new claims.
We also saw increasing costs associated with abuse-deterrent formulations of opioids (ADFs). The value of ADFs of long-acting opioids such as OxyContin®, has been challenged. Our Point-of-Care Formulary is an effective tool to manage the use of this class of opioids.
Average spending on opioids declined 10.7% for payers, from $259.58 to $231.83 per injured patient per year between 2018 and 2019.
Generating value with generic substitution and channel optimization
Generic substitution remains a cornerstone of our strategy to offset rising prescription drug prices. Last year, a primary driver of generic savings was the July 2019 launch of pregabalin, the generic version of Lyrica. Efficient substitution assured that payers received maximum benefit as quickly as possible, with 91.8% of all Lyrica prescriptions converted to pregabalin within 4 weeks and 96.4% within 180 days. Generic efficiency – the percent of generic drugs dispensed when a generic is available – was at or near 100% for all clients.
After the launch of pregabalin in July 2019, we converted 91.8% of Lyrica® prescriptions to the generic within four weeks and 96.4% within 180 days. Payers spent 40% less on pregabalin ($12.01 average cost per days' supply) compared to Lyrica ($19.98).
The average generic fill rate reached 87.0% in 2019
In 2019, payers could have saved $21.4M by achieving optimal mix, the maximum clinically appropriate generic fill rate for each therapy class. State-level mandates along with programs that encourage generic usage, such as step therapy and our physician outreach, can help reduce waste due to suboptimal mix.
Lower costs through home delivery
Home delivery yielded 23.1% lower costs on average than at retail pharmacies, while fulfilling a vital need among catastrophic patients and those living in rural areas in states like Texas. Consult with your clinical account executive to identify injured patients most suitable for home delivery.
Three emerging trends for workers' compensation plans
When myMatrixx customer data identified three key areas of concern, our clinical team quickly developed strategies to combat these trends:
Prescriber-dispensed private-label topical drugs creating unnecessary financial burden
Many topical drugs or dermatologicals applied to the skin are available over-the-counter or are dispensed affordably through retail pharmacies. Other ones are private-labeled and distributed only by prescribers. Many of these are egregiously priced and offer little to no therapeutic advantage for injured patients over traditional therapies. Since prescriber dispensing occurs outside traditional retail networks, myMatrixx works together with clients to implement plan-level and jurisdiction-specific strategies whenever possible. The greatest boon to addressing this problem is access to data regarding prescribers who engage in this practice.
Our strategy has three steps:
- Gain copies of paper bills from clients
- Target interventions to prescribers, highlighting patient safety concerns
- Initiate multiple escalation steps, depending on jurisdictional and client limitations
Many topical drugs or dermatologicals applied to the skin are available over-the-counter or are dispensed affordably through retail pharmacies. Other ones are private-labeled and distributed only by prescribers. Many of these are egregiously priced and offer little to no therapeutic advantage for injured patients over traditional therapies.
Specialty pharmaceutical spending on the rise
Only 2.1% of injured patients used a specialty drug in 2019, yet the costs accounted for 8.8% of total pharmacy spend. Though still rare for workers’ compensation payers, we are also seeing a rise in injured patients who have annual drug spending of $250K or more, just as in the commercial market. Mitigating this spend requires early identification of claims, projected costs, compliance and cost Management.
Specialty drug claims in workers’ compensation plans typically include anticoagulants and therapies for HIV, hepatitis C and oncology. Medications for HIV are typically covered following a needle-stick exposure and are also included in some payers’ first-fill and acute formularies for post-exposure prophylaxis. In 2019, spending on HIV drugs increased 22.1%, driven primarily by a 16.2% rise in utilization.
In addition, medications to treat ophthalmic conditions entered the top 10 specialty therapy classes for the first time.
While just 2.1% of injured patients used a specialty drug in 2019, the costs accounted for 8.8% of total pharmacy spend for workers’ compensation payers.
As the traditional drug market becomes saturated with generic drugs, the next influx of generics will be for specialty drugs. In the super spending example at right, the generic substitution of icatibant for brand Firazyr® alone saves over $414,000 on an annualized basis.
Injured patients in “super spending” category
As in the commercial market, having prescription drug costs of $250K or more is considered super spending, including these workers’ compensation cases from 2019.
Aging workforce contributing to higher costs
In addition to age of claim, myMatrixx is also focusing on age of patient, where we see a similar increase in drug utilization for older age groups. We were able to slow the rate of increase for drug spend in the older population from 2018 to 2019. Our comprehensive pharmacovigilance program includes applying AGS Beers Criteria® for potentially inappropriate medication use in older adults to ensure the medication is appropriate for the injury and for the unique health care concerns of a senior patient. Effective, ongoing management of this population requires an understanding of the changing needs of geriatric patients and an application of the Beers Criteria throughout the life of these claims.
Costs escalate for injured patients in older age groups.
Top 10 therapy classes and insights
In 2019, utilization increased for nine of the top 10 therapy classes, particularly dermatologicals (23.5%) and anticoagulants (11.7%) with opioids being the only class to decline (-8.6%). New to the top 10 were antihyperlipidemics, used to treat high cholesterol. Its -2.4% total trend was driven primarily by a 6.6% increase in days’ supply PPPY, moderated by an 8.9% decrease in the average cost per days’ supply.
2019 Executive summary
Key findings from the 2019 Drug Trend Report
In calculating trend, prescription drug use was considered for payers with a stable injured-patient base, defined as having a change in user volume of less than 50% from 2018 to 2019.
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 per-patient-per-year (PPPY) basis, was calculated by dividing the total days’ supply of medications by the total number of users in a year.
Market share was determined by calculating the percentage of total days’ supply of medication represented each medication in a therapy class.
Prescription drug costs were calculated by adding together ingredient cost, taxes, administrative fees and dispensing fees.