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New Regulations Limit the Prices for Doctor-Dispensed Drugs

A new study from the Workers Compensation Research Institute (WCRI) says that regulations will reduce costs, but will not reduce patient access to pharmaceuticals. The California statute has become a model for many other states, so their recent amendment was the focus for the study.

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The study examines physician dispensing before and after a 2007 change in the California statute that governed the prices paid to physician-dispensers. Before the statute was changed, physicians would typically charge higher prices than pharmacies for the same medication. The issue was that the workers’ compensation patients who are reimbursed for medical expense could cost the insurers less by going to pharmacies, but it is more convenient to just get your prescription from your doctor.

One example is Vicodin, the most common drug, which physicians were charging $0.85 per pill and the pharmacies were only charging $0.43 per pill. After the reform, physicians were paid $0.52 per pill and pharmacies charged $0.48 per pill, so the discrepancy was not as significant.

Dr. Richard Victor, WCRI’s Executive Director, said, “There is a great discrepancy between what doctors and pharmacies charge for dispensing the same drug. One question for policymakers is whether the large price difference paid when physicians dispense is justified by the benefits of physician dispensing. Policymakers can learn from the California experience.”

Critics of the regulations express concern that many patients will not get needed medications if they do not get them at the physicians’ offices, but the California study shows that physicians continued to dispense prescriptions even though the prices they received were lowered. Three years after reforms, all prescriptions dispensed at physicians’ offices only dropped two percent.

The study also found that less expensive generics were almost always dispensed by both physicians and pharmacies, so that that should not influence the pricing discrepancy between the two prescription dispensers.

The data used in this study included approximately 5.7 million prescriptions paid under workers’ compensation for nearly 758,000 claims in 23 states between 2007 and 2011. Massachusetts data was used in this study, even though physician dispensing is prohibited in general.

Pulgini & Norton, LLP attorneys have handled workers’ compensation claims for over 25 years in and around Boston and its surrounding areas. If you or a family member has been injured at work and would like to seek legal assistance, please contact us at (781) 843-2200 or (888) 344-2046 or email us.

Cited Sources:

New Regulations Limit the Prices Paid for Doctor-Dispensed Rx and Reduce Costs, But Unlikely To Reduce Patient Access, Digital Journal, July 19, 2012

New Regulation Limit the Prices Paid for Doctor-Dispensed RX and Reduce Costs, But Unlikely to Reduce Patient Access, Workers Compensation Research Institute, July 19, 2012

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