Significant Decrease in Physician-Dispensed Drugs after Pennsylvania Reforms, New WCRI Study Finds

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“The study finds the practice of physician dispensing became much less common in the state, and prescription drug costs decreased. But the emergence of new pharmacies in the state whose revenues were predominantly from high-priced compound drugs muted the cost savings from the reforms.”

CAMBRIDGE, Mass. May 17, 2018

Two years after the passage of House Bill 1846, the frequency and cost share of physician-dispensed drugs decreased considerably in Pennsylvania in line with the aims of the legislation, according to a new study from the Workers Compensation Research Institute (WCRI) titled Monitoring Physician Dispensing Reforms in Pennsylvania.

“With any reform, stakeholders want to know if the reform had its intended effect and if there were any unintended consequences,” said John Ruser, WCRI’s president and CEO. “In this case, the study finds the practice of physician dispensing became much less common in the state, and prescription drug costs decreased. But the emergence of new pharmacies in the state whose revenues were predominantly from high-priced compound drugs muted the cost savings from the reforms.”

The following are among the study’s findings:

  • Before the reforms (2013–2014), 1 in 3 prescriptions were dispensed by physicians. After the reforms (2015–2016), it was 1 in 10.
  • The cost share of physician dispensing decreased from 44 percent in 2014 (pre-reform) to 4 percent post-reform.
  • Prior to the reforms, 35 percent of injured workers receiving medical care in 2014 had at least one prescription. In 2016, it was 30 percent. This decline largely resulted from a drop in injured workers with physician-dispensed drugs with no material increase in those receiving pharmacy-dispensed drugs.
  • New pharmacies emerged in the state and dispensed expensive drug products such as compound drugs. As of 2016, pharmacies starting after January 1, 2013, dispensed 16 percent of all prescriptions filled by Pennsylvania workers and accounted for half of prescription payments.

The study used detailed transaction data for physician- and pharmacy-dispensed prescriptions filled in 2013 through 2016 that were within 24 months of the date of injury. The data used for this report came from payors that represent 47 percent of all medical claims in Pennsylvania. The authors of the study are Vennela Thumula, Te-Chun Liu, and Dongchun Wang.

For more information about this study or to purchase a copy, visit
https://www.wcrinet.org/reports/monitoring-physician-dispensing-reforms-in-pennsylvania.

ABOUT WCRI

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI's diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia, and New Zealand.

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About the Author: Bob Cooper

Bob Cooper is Canadian Business Tribune''s senior editor. He is also a nationally syndicated newspaper columnist and a bestselling author. He lives in London Ontario and covers the intersection of money, politics and finance. He appears periodically on national television shows and has been published in (among others) The National Post, Politico, The Atlantic, Harper’s, Wired.com, Vice and Salon.com. He also has served as a journalist and consultant on documentaries for CBC and Global News . In 2014, he was the winner of the Society of American Business Editors and Writers' investigative journalism award, and the winner of the Izzy Award for Journalism from Ithaca College's Park Center for Independent Media. He was also a finalist for UCLA's Gerald R. Loeb Award and Syracuse University's Mirror Award. Before becoming a journalist in 2006, Sirota worked in Washington for, among others, U.S. Rep. Bernie Sanders, the U.S. House Appropriations Committee Minority Staff and the Center for American Progress.

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