2013 Drug Trend Report by Optum

DRUG TREND REPORT 2013 WorkERs’ Compensation DRug Trend Report

Contributors:

Beth Kuschner, R.Ph., Pharm.D., Clinical Pharmacist

Joe Anderson, Director of Analytic Services

Barry Jarnigan, Chief Marketing Officer

Sarah Berger, Vice President - Marketing

Contributors:

Lynette Inkrott, Sr. Product Analyst Andrew Spaner, Statistical Analyst Angela Jenkins, Director of Regulatory Compliance

Robert Hall, M.D., Medical Director

Brian Allen, Vice President â&#x20AC;&#x201C; Government Affairs

Tron Emptage, R.Ph., M.A., Chief Clinical Officer

As a leader in the workers’ compensation PBM industry, it is our responsibility to make a difference. Claim Your Impact is a nationwide initiative to share individuals’ acts of innovation and ethical professionalism in support of injured workers. By doing what’s right for payors and injured workers alike, we make an impact. For the past several years, our annual drug trend report has demonstrated Progressive Medical’s ability to help our clients gain more control over their pharmacy-related claims expense and achieve better outcomes. We’ve worked together to reduce year-over-year costs, fill fewer prescriptions and diminish out-of-network hassles while recognizing higher savings, streamlined claim processes and increased workflow efficiencies. Less has become more despite rises in average wholesale price (AWP), persistent physician dispensers and the opioid epidemic. This year’s findings are no different. In 2012, our pharmacy program decreased the number of prescriptions per claim and days’ supply per prescription, contributing to an overall reduction in drug utilization of 2.8%. Product and claim mix further enhanced these savings by an additional 3.2% for a combined 6.0% reduction in prescription cost per claim. This achievement was unfortunately offset by drug inflation as noted in the AWP of 5.5%. The net reduction equaled 0.5% in total prescription cost per claim. This is the third consecutive year despite increases in average AWP in each of these years, that our clients have experienced a net decrease in the prescription cost per claim. Our ability to capture up to 98% of retail prescriptions gives clients more control over their pharmacy-related claims expense. More control facilitates deeper understanding and the ability to promote better outcomes at every phase, from first notice of loss to settlement. We are pleased to present you with our annual Drug Trend Report, and invite you to join our initiative by claiming your impact today. Dan Gifford, Executive Vice President – Product Management

Emry Sisson

Tommy Young

the trends

Daily Execution of the basics

* These pages demonstrate a sampling of the more than 800 impacts claimed since the launch of the Claim Your Impact initiative in November 2012. Visit claimyourimpact.com to read more, and claim your impact.

Appendix

Methodology: Consistent with prior years’ reports, the analysis (except where noted) is based on Progressive Medical’s in-network pharmacy data for the 2011–2012 time periods. Over 200,000 claims and nearly three million prescriptions were analyzed to produce this report.

The data does not include transactions for clients who have been with us fewer than two years so as not to distort the results due to their inconsistent inclusion or exclusion.

WE cLAIM OUR IMPACT

overall reduction in prescription drug cost per claim

98%

UP TO retail pharmacy network penetration

We identify high-risk claims earlier

The Trends Utilization, Opioid Analgesics, Generic Efficiency, Compounded Medications, On the Horizon and Government Affairs

Utilization Overall

Progressive Medical achieved an overall utilization decrease of 2.8% in 2012, as evidenced by an overall decrease of the number of prescriptions per claim of 2.0% and decreased days’ supply dispensed per prescription of 0.8%. Also seen is a 3.2% reduction in our product and claim mix. This reduction is demonstrated through changes in medication categories for individual claims, changes to lower cost alternatives within a therapeutic class and lower cost products. These two utilization trends result in an overall decrease of 6.0% in prescription spending. But we also must recognize the impact of inflation. Earlier this year, the Federal Bureau of Economic Analysis reported prescription drug inflation of 3.6% for the year 2012.1 Our analysis looks at only those prescription drugs dispensed for our book of business and those AWPs increased at a rate greater than the general healthcare average. These medications had a higher than average inflation rate. And while prescription drug inflation was less than last year, 5.5% (2012) versus 6.8% (2011), the increase was still significant. Our programs effectively minimized the impact of AWP inflation and resulted in an overall prescription spend decrease of 0.5%.

Of equal importance to overall utilization trends is the claim age and utilization within various stages of the claim cycle. Progressive Medical saw more claims closing in the acute (within 90 days of the first notice of loss) stage based on our overall pharmacy program.

Figure 1: top

25 drugs as a percentage of total spend

Figure 2: top

25 rank by daily spend

page 25

page 26

Medication Categories In last year’s report we noted the top five medication categories per drug spend were opioids, anticonvulsants, anti-inflammatories, antidepressants and muscle relaxants. This year, we saw dermatological agents enter the top five while muscle relaxants fell to sixth. We view this as a positive trend due to brand versus generic utilization; as well as the result of change in product mix including the use of short-acting muscle relaxants versus the more expensive long-acting alternatives, regardless of generic status.

Trends

As a percentage of total prescription volume, long-acting opioid analgesic utilization decreased. In conjunction, as a percentage of total prescription volume, use of anti-inflammatory drugs, anticonvulsants and antidepressants either increased or remained the same. This reflects our push for increasing adherence to therapy guidelines recommended by organizations such as the Official Disability Guidelines (ODG), American College of Occupational and Environmental Medicine (ACOEM), American Medical Association (AMA), the American Pain Society (APS), and the American Academy of Pain Management (the Academy). It is also indicative of the increased use of non-opioid adjunct medications for the treatment of chronic pain conditions. The trend also shows that while muscle relaxants can assist in lowering pain symptoms, their long-term use is often contraindicated. Despite the absence of a dramatic decrease, we consider the shift to be a positive trend that is helping achieve better outcomes.

utilization of opioid analgesics decreased

utilization of anti-inflammatories,

we help more claims close in the acute stage

anti-convulsants and anti-depressants increased

Individual Drug Products In the case of Nucynta (tapentadol) and Nucynta ER (tapentadol extended release), upward movement of Nucynta (the immediate release formulation) from number 32 last year to number 27 this year translates into a 5% increase in the number of prescriptions. Released in 2011, Nucynta ER debuts this year in the top 100 at number 73, and is definitely a medication that must be watched as it is the first opioid analgesic to receive Food and Drug Administration approval for pain associated with diabetic neuropathy. Exalgo (hydromorphone extended release) jumped from number 70 to number 42 as a result of it doubling in the number of prescriptions dispensed in our book of business in 2012 over 2011. Exalgo was released in March 2010 with the 32mg strength approved in August 2012. At a current AWP of nearly $50 per tablet for the 32mg strength, this is a medication that could jump into the top dispensed long-acting opioids by spend very quickly. Our clinicians are keeping an eye on this medication.

rank, it reflects a shift in prescribing to better coincide with guideline recommendations to use an oral drug as first line therapy for nerve pain versus a topical drug. Driven by an increase in AWP, Provigil (modafinil) was a notable mover in terms of dollars spent — up six spots, from number 25 to number 19 — despite fewer prescriptions dispensed.2 In addition to the aforementioned, we continued to follow brand medications Gralise, Horizant, Viibryd, Intermezzo and Duexis that were released in 2011. To date their impact has been minimal. Utilization across our book of business is insignificant; effectively managed through our Medication Plans.

Two opioid medications decreased in spend while utilization remained relatively flat. They are brand Kadian (morphine capsules extended release) and generic hydrocodone/acetaminophen. Meanwhile, generic oxycodone/acetaminophen experienced reductions in both spend and utilization.

We can intervene sooner, and more effectively

Use of Fentora (fentanyl citrate buccal) dropped by approximately 25%, while utilization of Actiq (fentanyl citrate lozenge) fell 31.5%. This decrease is quite possibly a reflection of the increased prescribing regulations placed on the transmucosal immediate release fentanyl (TIRF) products following the launch of the TIRF Risk Evaluation and Mitigation Strategy (REMS) in 2012 as well as our program’s aggressive management of these medications through the use of our proprietary Medication Plans. Lyrica (pregabalin) leapfrogged Lidoderm (lidocaine patch) to become the second most dispensed medication in 2012. While not a significant jump in

Trends

Opioid Analgesics The misuse of opioid analgesics, and the associated deaths therefrom, has been declared an epidemic by the Centers for Disease Control (CDC). The dramatic increase in use of opioids over the last two decades partially comes from the availability of extended release narcotics, the reported safety of narcotics in treating chronic non-malignant pain, the change in the treatment guidelines and acceptance of more aggressive treatment of chronic pain in the general population.

4.2%

decrease in the prescription cost per claim of opioid analgesics

The use of opioid analgesics in the United States is associated with safety, efficacy, misuse, abuse, addiction and overdose concerns, and the regulatory push has been to reduce opioid use due to the associated risks. As a result, the medical community is starting to see data indicative of decreasing use of opioid analgesics. The impact of our programs is similarly encouraging. Comparing the last two drug trend years, 2011 with 2012, shows we have reduced the number of opioid prescriptions per claim. Additionally, our program has helped to reduce the days’ supply of opioid containing prescriptions by 2.13%; however this is slightly blunted by the increasing age of claims. Together the product and claim mix resulted in a net reduction in cost per claim of 7.5%. Finally, we have to look at inflation. Inflation in AWP of 3.3% for opioids netted a decrease in the opioid prescription cost per claim of 4.2%. From an industry perspective there are several reasons opioid analgesics are beginning a downward trend: prescribing patterns are changing in response to federal and state guidelines, use of Prescription Drug Monitoring Programs (PDMPs), application of urine drug testing, and the evolution of abusedeterrent formulations.3 Absent abuse-deterrent formulations most opioid analgesics can be crushed and misused. Often they are inhaled as a powder or injected as a solution.4 One of the goals of abuse-deterrent formulations is to prevent this type of misuse. Over the past few years, several existing products have been reformulated to combat this issue, including OxyContin (2010), Oxecta (2011) and Opana ER (2012). And while not specifically considered “abusedeterrent,” the membrane of Exalgo makes it difficult to crush or extract for injection. Several other abuse-deterrent agents are in the pipeline.

After the OxyContin reformulation became available in the market, admittances to substance abuse programs for OxyContin abuse decreased.5 And while we expect the development and release of new abuse-deterrent opioid analgesics will continue, the recently released Oxecta was not among our top 100 medications this year. In 2012, the FDA released and implemented its much anticipated Risk Evaluation and Mitigation Strategies (REMS) program for long-acting opioid analgesics. As noted in last year’s report,6 the intent of this voluntary REMS program is to educate prescribers and patients on use of long-acting/ extended-release opioid analgesics. Prescribers may write for long-acting opioid analgesics without receiving the additional education and the FDA will be evaluating the impact of this REMS program. The future will show whether requiring registration or not making the program mandatory has an effect on prescribing. The REMS program for transmucosal immediate release fentanyl (TIRF) drugs (Actiq, Fentora, Lazanda, Onsolis, Abstral, and the recently approved Subsys)7 was mandatory. Although TIRF drugs are not covered under Progressive Medical’s Medication Plans,8 there are situations when we are required to cover them. Due to our management of these medications, we anticipated that prescriptions for these products would decrease between 2011 and 2012, and this occurred. Prescriptions of Actiq and Fentora, the two most common TIRF products, decreased in 2012. We will continue to manage these opioids and their downward trend. Two notable issues regarding opioids arose at the end of 2012 and the beginning of 2013 that will have an impact in future medication spend. The FDA advisory panel voted against approval of an extended-release version of hydrocodone (Zohydro), citing safety concerns regarding addiction.9 They also recommended moving combination hydrocodone products, including Vicodin, Lortab and Norco, to Schedule II.10 Changing the Drug Enforcement Agency’s (DEA) classification or “up-scheduling” hydrocodone combination products would require a written prescription for all new prescriptions and would ban refills of these products. In comparison, as a Schedule III drug, these products can be phoned in by the prescriber and may have up to six total fills to be used within six months of original issue date. We are actively following this potential reclassification, as the change may decrease utilization.11

Generic Efficiency When evaluating the effectiveness of a PBM, payors often inquire about “generic dispense rate”. We believe “generic efficiency” is a more meaningful measurement of a PBM’s performance when it comes to generic fulfillment. This is more meaningful because generic dispense rate can be positively or negatively affected simply by the introduction (or removal) of a brand or generic medication from circulation. Generic efficiency is an expression of the percentage of times that a generic script was dispensed versus the number of times a generic could have been dispensed.

a 1% increase in generic utilization results in a 1.8% reduction in spend

While it will never be possible to achieve 100% generic efficiency, due to workers’ compensation state-based rules and regulations, the most effective PBM programs will have a generic efficiency of 99% or higher. In our case, it is 99.5%.

Trends

Generic releases that occurred in late 2011 and 2012 that are expected to have an effect on 2013 drug spend, along with other notable generic medications, are found in the appendix, pages 26 and 27.

figure 4: generic figure 5: top

page 26

release table

page 27

25 generics

Looking ahead to 2013 and 2014, we anticipate six medications will have a generic release that could impact spend: Lidoderm, Opana ER, Exalgo, Cymbalta, Nexium and Celebrex. • Lidoderm (lidocaine patch). Patent expired in May 2012 but a generic is not yet commercially available. • Opana ER (oxymorphone). Shipments of generic Opana ER equivalents began in January 2013 after patent litigation resolved. While brand Opana ER has been reformulated to deter abuse, the generic Opana ER is considered equivalent to the old formulation of Opana ER, not abusedeterrent and therefore not considered a therapeutic equivalent to the crush-resistant brand name Opana ER. • Exalgo (hydromorphone). Generic release of this opioid analgesic is expected in late 2013. • Cymbalta (duloxetine). Generic release of this antidepressant is expected in December 2013.

• Celebrex (celecoxib). Generic release of this anti-inflammatory is also expected in May 2014. Vicodin products should also be watched for their potential impact on spend. In 2011 the FDA issued a requirement that all opioid/acetaminophen (APAP) combination products contain no more than 325mg of APAP. Ahead of the January 2014 compliance requirement, Abbott, maker of Vicodin, Vicodin ES and Vicodin HP reduced the amount of APAP in these products to 300mg per tablet. These products do not technically have a generic equivalent available. However, a separate hydrocodone/APAP product (Xodol) is commercially available as a generic formulation, and the strengths of Xodol are the same as those of the reformulated Vicodin products. ** Of note, there is variability in the AWP for the various generic formulations of hydrocodone/APAP; some are considerably more expensive than others. The image below highlights the significant pricing disparity between the new Brand Vicodin, generic vicodin and a hydrocodone/APAP alternative. By volume, hydrocodone/APAP products are the most commonly dispensed prescription medications in our book of business. If the number dispensed remains consistent and the Vicodin reformulations are used instead of available generic alternatives, this could result in an increased opioid spend of several million dollars. Progressive Medical is continuing to review and monitor our prescription volumes to alert our customers to changes in these types of trends.

7.5/300mg

38x

5/300mg

18x Brand Vicodin/Xodol $5.89 per tablet on average.

• Nexium (esomeprazole). Generic release of this stomach protectant is expected in May 2014.

5/300mg

5/500mg Generic Vicodin $0.32 per tablet on average.

5x Hydrocodone/ APAP $1.54 per tablet on average.

Brand Vicodin/Xodol $9.89 per tablet on average.

7.5/300mg

7.5/750mg Generic Vicodin ES $0.26 per tablet on average.

6x Hydrocodone/ APAP $1.57 per tablet on average.

Compounded Medications

flurbiprofen, oxycodone, baclofen, hydrocodone and capsaicin. By volume, in 2012 compounded medications represented 0.60% of all prescription medications, up from 0.44% in 2011. They accounted for 2.08% of total spend (up from 1.24% in 2011).

The FDA defines traditional pharmacy compounding as “the extemporaneous combining, mixing, or altering of ingredients by a pharmacist in response to a physician’s prescription to create a medication tailored to the specialized medical needs of an individual patient. Traditional compounding typically occurs when an FDA-approved drug is unavailable or a licensed healthcare provider decides that an FDA-approved drug is not appropriate for his or her patient’s medical needs.”12

Strict sterility and compounding guidelines are available from state and local governing bodies and industry groups alike. In light of the 2012 contamination incident, we anticipate that 2013 will see increased legislative action surrounding the rules and laws that pharmacies, pharmacists and other health care providers will have to follow if engaged in compounding.

They go on to say that all compounded medications are actually considered new medications and should go through appropriate approvals as there is the potential for patient harm in untested drugs. According to the Official Disability Guidelines, topical compounded medications do not have sufficient evidence to support widespread use.13

On the Horizon

Most of the compounded medications processed in workers’ compensation are topical, are used for pain management and have low medical risk potential. Occasionally oral or injectable medications are dispensed that could have increased potential for harm, particularly where compounding doesn’t follow all industry safety requirements. Progressive Medical requires prior authorization on all compounded medications products prior to dispensing at the retail pharmacy. In the event that an ingredient does not fit the client’s Medication Plan or other state guideline, we require approval of each respective ingredient used in the compounded medication. On average, we see four to five individual ingredients in every topical compounded medication for an injured worker. Our clinical team assists claims professionals by retrospectively reviewing every compounded medication form for appropriateness and where indicated, will suggest alternatives to promote utilization of the right medication. The most common ingredients used in compounded medications that we see in our book of business are gabapentin, ketoprofen, ketamine, cyclobenzaprine,

We anticipate continued focus on the development of tools and resources to help reduce the misuse and abuse of, and addiction to, opioid analgesics. These efforts will involve both regulatory action and product developments by medication manufacturers. In February 2013, the FDA held a two-day hearing on whether to alter the labeling for opioid analgesics to limit use to less than 90 days, limit dose to 100mg/day morphine equivalents and to strike from the labels the term “moderate” from “moderate to severe pain.” Proponents of the measure said that this will reduce improper prescribing of opioids but not limit use in those benefiting from the therapy. Opponents of the measure said that while additional measures are needed to curb opioid abuse, label limitations will likely decrease access to medications as third-party payors decline to pay for anything outside the labeled indications. The FDA needs more information before making its decision. We will continue to monitor this issue very closely.

Trends

The use of urine drug monitoring as part of an effective medication compliance program is also a topic to watch. We believe an effective urine drug monitoring program should include established criteria for when testing is appropriate and offer physicians access to a network of lab partners who provide a comprehensive panel at a fixed price. As such, we anticipate continued growth in this arena as payors look to understand the consistency of results relative to expectations based on what has processed through the PBM program. As noted earlier, we expect that the development of abuse-deterrent opioid reformulations will continue. While abuse more often than not occurs through oral ingestion, the creation of abuse-deterrent opioids to prevent crushing will reduce the abuse liability of the medications from these routes. Discussion about medical marijuana, along with questions surrounding its compensability, efficacy and its appearance in urine drug screens, will continue as more states pass legislation about the medical use of this substance.

Government Affairs Opening gavels have fallen in legislative sessions throughout the country as a number of states grapple with ways to improve their systems and reduce costs for employers. There are a number of general reform issues that linger from the 2012 sessions. Physician dispensing and a comprehensive and effective strategy to contain the misuse and abuse of opioids has also proven elusive in most places. Adding to the political dynamics for 2013 are all the new faces that won legislative seats in the November elections around the country. Suffice it to say, the stage has been set for an active 2013, with a several states already fully immersed in their legislative sessions. Map of state activity: compounds

We expect that personalized medicine will become prominent over the next several years. With gene sequencing completed, many variations in how a drug acts in the body have been discovered, with significant inter-patient variability.14 Determining if a patient has any of these genetic variations may figure into how drugs should be dosed for pain. We will see ongoing activity targeting market influences such as: nontraditional dispensing, repackaged medications, the use of pharmacy networks and general workersâ&#x20AC;&#x2122; compensation reform.

States requiring ingredient level billing for States requiring ingredient level billing and States requiring ingredient level billing for compoundsthat added language to address/modify compounds compounds after January 1, 2012 States that added language to address/modify compounds after January 1, 2012

States that added language to address/ States that have proposed language to modify compounds after January 1, 2012 address/modify compounds States requiring ingredient level billing and that added language to address/modify compounds after January 1, 2012 States requiring original NDCs States that have proposed language to address/modify compounds

States requiring both the original and repackaged NDC States that allow the AWP if original NDC is not available States requiring the original NDCs and allow the AWP if original NDC is not available

State Activity California As the 2012 legislative session wound down, the California legislature passed SB 86315, a comprehensive workers’ compensation reform bill. The bill sought to address some perceived inequities in the indemnity benefits for injured workers, clean up the lien process, provide a simplified dispute process for medical billing issues, and further clarify rules for provider networks and reimbursement. For prescription drugs dispensed to injured workers, SB 863 clarified that the workers’ compensation system was exempted from the pharmacy reimbursement cuts that were mandated for the Medi-Cal system. Interestingly, SB 863 also mandated that a copy of the prescription be submitted with each pharmacy bill. There has been quite a bit of furor over this requirement, since there is no practical and economical way for pharmacies to comply. Not to mention the fact that all of the information found on the prescription from the doctor is already included in the paper or electronic bill, and that the designated e-billing standard does not support attachments. A clean-up bill, SB 14616 has already been filed that would exempt pharmacies from this requirement. The legislation has broad support and has passed out of the Senate and is awaiting action in the Assembly. Our government affairs team is actively engaged in promoting the change and we will continue to communicate on progress in the weeks and months ahead.

map of state activity: repackaged medications and use of ndc

States requiring original NDCs

States that allow the AWP if original NDC is not available

States requiring both the States requiring bothoriginal the original and repackaged States NDC requiring the original NDCs and allow and repackaged NDC the AWP if original NDC is not available States that allow the AWP if original NDC is not available States requiring the original NDCs and allow the AWP if original NDC is not available States requiring original NDCs States requiring both the original and repackaged NDC

reimbursement for repackaged medications based on the AWP of the medication as determined by the original manufacturer’s National Drug Code (NDC). This pricing formula would put reimbursement for physiciandispensed drugs on par with the retail pharmacies. States that allow the AWP if original NDC is not available

Florida Battle lines drawn in 2012 are becoming more deeply entrenched on the issue of reimbursement levels for repackaged medication. Over the last several years, repackaged medications have been priced at levels exceeding 300% of the cost of the same medications dispensed by a pharmacy. NCCI estimates the additional cost to the Florida workers’ compensation system due to these inflated prices exceeds $27 million annually. • Workers’ compensation payors are supporting bills17 by Senator Alan Hays (R-Umatilla) and Representative Matt Hudson (R-Naples) that would limit

States requiring the original NDCs and allow the AWP if original NDC is not available

• Dispensing physicians and repackagers are supporting a bill18 sponsored by Representative Jose Diaz (R-Miami) that would allow repackagers to continue to price medications based on their own unique NDC and stated AWP. The Diaz bill does offer a nominal rebate of $15 on medications that have an AWP greater than $25.

Trends

With both sides presenting competing financial and patient impacts, any change from the status quo faces an uphill battle. Both bill sponsors have signaled that the bills will not advance through the legislative process without some type of compromise being reached. Negotiations are underway and focus on reimbursement levels based on the original manufacturer’s NDC number, the ability of payors to re-price to contract rates and time limits on physician dispensing. These are critical issues that historically have been jealously guarded by both sides and it will be tough to get movement from current positions. Hawaii For the third consecutive year, the Hawaii legislature is considering legislation (SB1302)19 that would limit the reimbursement for repackaged medications to amounts comparable to that of retail pharmacies. Previously, the measure failed in both 2011 and 2012 because the chair of the Judiciary and Labor Committee refused to schedule the bill for a hearing. The prospect for passage seems bleak. Illinois In July 2012, the Illinois Workers’ Compensation Commission adopted a rule to limit reimbursement for repackaged medications to the AWP based on the original product NDC. The rule sparked a flurry of lobbying activities on both sides of the issue as it made its way through the rulemaking process. One stop along the way was the Joint Committee on Administrative Rules (which ultimately approved the rule). The journey culminated on November 20, 2012, when the Illinois Secretary of State Index Department accepted the Workers’ Compensation Commission rule; the rule became effective upon that acceptance. The text of the final rule was published on December 7, 2012 in the Illinois Register.20 This effort in Illinois is a great example of industry stakeholders uniting their efforts to promote positive change.

quantity that can be dispensed to a 30-day supply. Passage of the legislation would have resulted in significant savings on prescription drug costs in Maryland, at least as it relates to refills of prescriptions. The legislature adjourned without taking any action on this bill. We will continue to have our eye on this as the year, and the bill, progress. Michigan The Michigan Workers’ Compensation Agency adopted a new rule dealing with the reimbursement for repackaged medications. The rule requires that reimbursement for repackaged medication be based on the average wholesale price as determined by the original manufacturer’s NDC for the repackaged medications. The rule was submitted to the legislative Joint Committee on Administrative Rules for a hearing and approval. The committee allowed the rule to take effect without comment and the final rule was published and effective on December 26, 2012.22 Payors in Michigan should see a decrease in the cost of physician-dispensed medications as a result of this rule.

Map of state activity: Repackaged medications

Maryland After an unsuccessful attempt by the Maryland Workers’ Compensation Commission to limit reimbursement for repackaged medications, House Delegate Sally Jameson responded by introducing HB 174,21 a bill to restrict physician dispensing to the first 72 hours following an injury and limiting the States that added language to address/ States with regulatory limits on repackaged modify States repacks after January 1, 2012 drugs that added language to address/modify repacks after January 1, 2012 States that have proposed language to States thatrepacks have proposed language to address/modify repacks address/modify States with regulatory limits on repackaged drugs

New York Near the end of 2012, the Workers’ Compensation Board released its long-awaited permanent rule23 on pharmacy networks, which mandates that injured workers use pharmacy networks designated by their employers, and limits reimbursement on repackaged medications by requiring the use of AWP based on the original manufacturer’s NDC code. The rule also requires insurance carriers or employers who utilize a network to reimburse out-ofnetwork pharmacies at the fee schedule rate until the pharmacy is provided a notice by the insurers or employers that the injured worker is subject to a pharmacy network. New York is also in the process of developing rules for its iSTOP prescription drug monitoring database. The iSTOP program is scheduled to begin in January 2014. Pennsylvania The Chamber of Commerce in Pennsylvania has published a white paper outlining reforms they hope to achieve through the legislative process in the 2013 Session. The proposal seeks the establishment of pharmacy networks, the adoption of a fee schedule, limits to the reimbursement for repackaged medications and controls on the prescribing and dispensing of opioids. Over the past year, the Department of Labor has also had a working group looking at various reform issues. Recommendations coming from this working group include requiring injured workers to use a pharmacy network and implementing controls on the use of opioids. The legislature has yet to take up either proposal. Texas Starting September 1, 2013, all claims in Texas will be subject to the closed formulary rules. Over the course of the last year (and continuing into August 2013) insurance carriers and self-insured employers have been working to transition their legacy claims (claims occurring prior to September 1, 2011) into the new closed formulary. The treating physician and the insurance carrier or self-insured employer are working together to coordinate a voluntary treatment plan to manage the prescription drugs being used by the injured worker. The goal of the closed formulary is to limit the prescribing of “N” drugs as indicated by the Official Disability Guidelines (which includes the majority of opioids) and to help contain the cost of pharmacy care. A preliminary study released by the Texas Division of Workers’ Compensation in October 2012,24 indicates that the adoption of the closed formulary has

Map of state activity: physician dispensing

Physician Dispensing Allowed butbut Restricted Physician Dispensing Allowed Restricted Allow Physician Dispensing Allow Dispensing Physician Dispensing Physician Banned

States Proposing Regulatory Physician Dispensing AllowedChanges but Repricing

Regulated Physician Dispensing Allowed but Repricing Regulated States Proposing Regulatory Changes Physician Dispensing Banned

reduced the use of “N” drugs for new claims in Texas by 60% and the amount spent on “N” drugs by 80%. It should be noted that these are very preliminary numbers and the division will continue to monitor results. Analysis indicates our clients are seeing a 16.8% decline in the number of claims using opioid analgesics in the first year of injury after 9/1/2011. States requiring original NDCs

States requiring both the original and repackaged NDC

States that allow the AWP if original NDC is not available

States requiring the original NDCs and allow the AWP if original NDC is not available

The Rest In addition to the aforementioned, there are numerous issues in other states that are anticipated to bring change to the nation’s workers’ compensation systems. Oklahoma is again looking to allow an opt-out provision for employers, while Tennessee looks to move to an administrative adjudication system. Meanwhile, Louisiana, New Mexico, Oregon and others are taking action to adopt e-billing options. A handful of states are also looking to redesign their PDMP processes in an effort to make them a more valuable prevention tool.

Trends

Federal Activity At the federal level, the FDA continues to develop its REMS program in an effort to inform physicians and patients of the potential risks associated with the use of opioids. The FDA is actively engaged in efforts to control the misuse and abuse of opioids and has established a task force to address a number of areas including the development of drugs, labeling, educational programs and collaborative efforts with other agencies. The FDA Safety Advisory Panel has also recommended moving some hydrocodone-based products from a Schedule III to a Schedule II classification (additional discussion may be found above, under “Trends,” page 9). Medicare SetAsides is another area of intense activity as workers’ compensation payors and Center for Medicare & Medicaid Services (CMS) try to hammer out a consistent model that can be applied evenly without requiring that payors set aside unjustly inflated amounts.

WE ADVOCATE

The Center for Disease Control has labeled prescription drug overdose deaths as an epidemic. Congress is weighing in with the introduction this spring of the Safe Prescribing Act of 2013. Sponsored by Senator Mark Kirk (R-IL), Senator Joe Manchin (D-WV), Representative Rodney Davis (R-IL) and Representative Edward Markey (D-MA), the bipartisan, bicameral act would reclassify drugs containing hydrocodone to a Schedule II status, placing tighter restrictions on their use and availability.

CHANGE

All of this activity is taking place against the backdrop of the Affordable Care Act. Industry analysts and prognosticators are working furiously to monitor implementation and potential impact that the reforms may have on the workers’ compensation system.

To fully appreciate our impact on the industry, one must understand the traditional payor-PBM relationship. A PBM generates revenue by processing prescription transactions. A payor generates profit by ensuring claim resolution is appropriate and quick. A third-party biller ensures that pharmacies are paid for the prescriptions they dispense. These three entities are intertwined, but unfortunately their objectives are often at odds. The only way to change this dynamic is for these entities to have a unified purpose: to do what is right for clients and injured workers alike. By integrating the best aspects of both PBM and third-party billing programs into one seamless solution, we have moved beyond processing prescriptions.

daily execution of the basics 17

Daily Execution of the Basics

Progressive Medical captures more retail prescriptions than any other workers’ compensation PBM. Through the use of proprietary connectivity with our affiliate, StoneRiver Pharmacy Solutions we are the only PBM capable of Medication Plan: a proprietary approved drug electronically applying list developed through the work of our Clinical client-specific business Oversight Committee and our Pharmacy & Therapeutics Committee. The clinical review rules, eligibility, involves an extensive analysis of evidence based Medication Plans and medicine, and both nationally and regionally approved medical guidelines. Drug Utilization Review (DUR) edits in real-time at the Drug Utilization Review (DUR): a process by which a pharmacy is alerted to clinical and pharmacy point of sale eligibility issues related to a injured worker. starting with the first These edits are often based on a customer’s application of our proprietary Medication Plans retail fill. and business rules, as well as regulatory guidance (Texas as an example) where applicable.

96 PERCENT

COVERAGE

All retail prescription transactions flowing through our network follow one of three paths:

1 The prescription is identified as meeting the program criteria and is ‘approved’ with all program parameters applied.

2 The prescription is identified as part of the program; however, something about the transaction prevents adjudication without additional input. Both the pharmacist and claims professional are electronically alerted of the need for review. If approved by the claims professional, all program parameters are applied and the injured worker receives their prescription. If disapproved, the prescription is rejected.

3 The prescription is identified as part of the program, however falling outside of program criteria. As a result, it is rejected.

This results in greater control and produces better outcomes as we save clients money, diminish out-of-network hassles25, and ensure that the injured worker receives the right drug at the right time. A recent case study involving a national payor decisively concluded that our unique and proprietary connectivity with StoneRiver Pharmacy Solutions generated additional savings of 35.9% in just twelve months. Not only were we able to electronically WE HELP YOU adjudicate the pharmacy transactions in real-time, we were also able to apply their specific business rules and network rates to what would otherwise have been out-of-network prescriptions these were captured in-network. StoneRiver Pharmacy Solutions and Progressive Medical act as one seamless entity, working from common real-time eligibility.

SAVE MONEY

We also helped our client realize administrative savings26 conservatively estimated at more than $250,000 over this same time period, while our utilization management programs further augmented savings by helping our clients avoid paying for the most expensive prescription medications - the ones that should never be filled in the first place.27 Our proprietary connectivity, customized Medication Plans and a multifaceted DUR program are our first line of defense against claims leakage, and prescription misuse and abuse. Prediction as a result of advanced analytics and a patent-pending multivariate statistical model is our second line of defense.

Looking at all this data at once can be overwhelming. How do you measure the risk of a rare injury against the risk of an injured worker who has seen more prescribers than anticipated? Resources are limited. Priorities can be at odds. Knowing when to intervene on the right claim at the right time with the right tool - is still not an exact science. Our log linear, multivariate statistical model weighs and measures the risk of all the factors we know to be correlated with an injured worker’s potential to become a high-cost pharmacy claim, arriving at an individual risk score. This single measure is used by our clinical services team of pharmacists and nurses to prioritize intervention efforts. Figure 6: Sample scores of high-risk injured workers

page 28

After analyzing data for hundreds of thousands of injured workers across the nation, we have identified many different factors associated with a claim’s potential to become a high-cost pharmacy claim. Demographics include, but are not limited to, injury type, type of prescriber and the area in which the injured worker lives. Pharmacy metrics include morphine equivalence of opioid medications, duplicate therapies and the use of specific drugs or drug classes. The holistic incorporation of these factors in our statistical analysis provides a deeper understanding of the claim. Figure 7: frequency and severity of injury types

page 29

Figure 8: frequency and severity of selected prescriber types

page 30

We’ve also found claims age to be a significant driver of pharmacy costs. Although fewer than 25% of injured workers receive medication two years after their injury, they make up 86% of total pharmacy costs.

Quicker access to more information better equips claims professionals and clinicians to make decisions. Through the use of our patent-pending, multivariate statistical model we are able to more deeply analyze data to identify high-risk claims earlier so that we can apply the right intervention tools sooner and more effectively.

daily execution of the basics

• Some claims are simply inherently long term, and are therefore more likely to have co-morbidities that require medications otherwise not typically associated with a workers’ compensation injury or illness.

Our experience also indicates that older claims are more expensive than newer claims, as the injured workers involved not only take more prescriptions, but the prescriptions taken are also more costly (see Figure 9). This happens for a few reasons.

The interaction of these factors with claims age must also be considered.

• Older claims are more likely to have complications with their recovery. • When an opioid analgesic is used for pain management, there is risk of dependence on the opioid analgesic itself as well as on medications used to wean the injured worker off the drug.

figure 9: Prescriptions

per active claim and cost

450% 400%

350% 10 300%

Prescriptions per Injured Worker

250%

200% 150%

4 100% 2

50% 0%

0 0

Years Since Injury Date Prescriptions per Injured Worker

Cost per Prescription (Indexed, 100% = Cost when less than one year since injury)

Cost per Prescription (indexed)

We started an early intervention program in June 2012 that involved over 500 claims within the first six months of injury. Of this total, we intervened on half, chosen at random. The other half became a “control group” (and therefore received no intervention). We used this scientific approach to determine whether our interventions were as effective as we had hoped: not only a better outcome, but a measurable, statistically significant outcome.

A factor’s relative influence changes as claims age and more information is collected about the injured worker’s behavior, such as the number of pharmacies visited, types of medications received and types of prescribers visited. Ongoing analysis is essential as we know the influence of particular demographics can change as a claim matures (see Figure 10), and a claim can demonstrate the potential to become a high-cost pharmacy claim at any time. We recalculate an injured worker’s risk score throughout the life of the claim to assure both clinicians and claims professionals are reviewing the most relevant information as part of their ongoing claim adjudication.

figure 10: changes

To identify the claims that were the best candidates for early intervention, we used our patent-pending early intervention prediction model. Risk scores were calculated and claims were identified for intervention. We then used the appropriate clinical resource to make sure these claims were headed in the

in risk predictors as claim ages

100% 90% Pharmacy Behavior: Medications, Number of Prescribers, Number of Pharmacies

80% 70% 60% Percent of Predictive 50% Significance

Injury: Body Part, Nature of Injury Prescriber: Demographics of Treating Prescriber

40%

Geographic and other Demographics

30% 20% 10% 0% 1

Months Since Injury Date

daily execution of the basics

right direction. Claims receiving intervention saw opioid use drop 14%– 15% more than the control group. Prescription drug costs also decreased by 36.2% (see Figure 11). Meanwhile, the control group only experienced a 10.7% decrease in prescription drug costs per claim. The difference, a 26% reduction in prescription cost per claim, can be attributed to our program with statistical confidence of 96%. For comparison, this level of confidence is sufficient to meet the FDA’s standards for a “positive” drug trial.28

The cost and usage reductions realized two months after intervention clearly demonstrate our ability to change outcomes. This shows that when we identify claims that are most at risk for developing chronic use of prescription medications earlier, we can prevent pharmacy misuse in the first year of injury. This ultimately prevents more claims from developing into long-term claims. Despite the best efforts of payors and PBMs alike, there are claims that will mature into very complicated situations. Even the best defenses are not

figure 11: reduction

in injured worker pharmacy cost due to early intervention 120%

110.6% 100.0%

100% 89.3%

Cost per Claim (Indexed, 100% = Intervention Month)

80%

89.3%

26%

60%

63.8% 53.9%

40% 20% 0%

Intervention Month

1 Month Post Intervention

Early Intervention Program

2 Months Post Intervention Control Group

impenetrable. It is important to understand the options that exist to help improve the injured worker’s medication therapy, and hopefully steer them toward a better outcome. Sound, evidence-based clinical programs are our third line of defense against claims leakage, and prescription misuse and abuse. When a need for intervention is indicated, there are several options available, depending on the complexity of the claim. They include claims professional outreach, physician outreach, Drug Utilization Evaluation (DUE), and Intervention RxTM, a multi-faceted clinical tool that is equipped to address claims of varying complexity. Of all of these, a Peer-to-Peer Review is the most comprehensive, and is used when the current medication therapy regimen does not follow accepted clinical guidelines or evidence-based medical practices. In this program, we complete a thorough review of the medical treatment records and prescription histories and an independent physician discusses therapy recommendations with the prescriber. The goal is to arrive at an agreeable treatment plan that promotes either return to work or maximum medical improvement while also advancing the claim closer toward resolution. While an involved process, our experience shows the effort is worthwhile. As a result of our program, one of our national carrier clients recognized a 51% decrease in the likelihood that a claim will mature beyond two years. Capturing an injured worker’s out-of-network fills, combined with advanced analytics and effective clinical strategies has resulted in $350-$720 of savings for prescription costs per claim. Fewer injured workers are becoming part of workers’ compensation’s “long-tail.” Figure 12: Claim DURATION OF PHARMACY USE

Once the medication therapy is stabilized, home delivery can offer opportunity for savings. In 2012 our clients experienced 6.7% additional savings off either fee schedule or UC&R. One reason for this is the increase in the average days’ supply of almost 40 days greater than retail prescriptions (64.3 days versus 24.6 days). Moreover, the average cost per days’ supply was 13.3% lower than retail prescriptions. Clients who entrusted our dedicated home delivery service team to administer the conversion from retail to home delivery enjoyed even greater utilization, with rates in excess of 20% based on days’ supply.

THE LOWEST TOTAL PROGRAM COST At Progressive Medical, we know that more control produces better outcomes. We understand that timing is everything. It all starts with the ability to capture the prescription transaction in-network. We do this better than any other workers’ compensation PBM. Once captured, we recognize the value of data. Our patent-pending statistical model helps guide clinical decision making like no other in the marketplace. With the data in hand, we know that the earlier we can apply our drug strategies and clinical interventions, the sooner claims will close. The clinical products and services we offer are among the industry’s best. By doing what is right, clients realize hard dollar savings, efficiency gains, diminished out-of-network hassles, fewer prescriptions filled, shorter claim duration and faster claim closure as we deliver our promise: the lowest total program cost.

We claim our impact. When will you claim yours? Visit claimyourimpact.com today.

page 31

daily execution of the basics

EARLY INTERVENTION

WE CONSISTENTLY ReducE TOTAL PROGRAM COSTs

reducES pharmacy cost per claim BY

36.2%

appendix

Appendix FIgure 1:

top 25 Medications as a percentage of total spend with AWP changes in awp Brand & Generic brand Only

2012 Rank

2011 Rank

Percentage of total RX

Medication name

9.22%

OXYCONTIN TABLET

4.62%

LYRICA CAPSULE

11%

4.46%

LIDODERM PATCH

4.30%

VICODIN TABLET*

(1%)

13%

4.20%

CYMBALTA CAPSULE

16%

3.63%

CELEBREX CAPSULE

11%

3.45%

PERCOCET TABLET*

10%

3.13%

DURAGESIC PATCH*

2.33%

NEURONTIN TABLET*

11%

2.15%

OPANA ER TABLET*•

2.04%

NEURONTIN CAPSULE*

11%

1.52%

ULTRAM TABLET*

1.51%

SKELAXIN TABLET*

14%

1.50%

MOBIC TABLET*

1.38%

ROXICODONE TABLET*

1.23%

KADIAN CAPSULE*

1.22%

MS CONTIN TABLET*

12%

1.18%

FLEXERIL TABLET*

N/A

1.14%

PROVIGIL TABLET*

18%

29%

1.12%

TOPAMAX TABLET*

1.11%

AMBIEN TABLET*

12%

1.07%

FENTORA TABLET

21%

1.07%

FLECTOR PATCH

0.98%

NEXIUM CAPSULE

0.97%

ZANAFLEX TABLET*

N/A

We DO WHAT’S

RIGHT

* SIGNALS GENERIC AVAILABILITY • only Non-abuse-deterrent formulation

appendix

Figure 2:

TOP 25 medications RANKed BY SPEnd per day supply 2012 Rank

MEDICATIOn name

price per day supply

FENTORA TABLET

$298.69

KETOPROFEN POWDER

$59.01

PROVIGIL TABLET*

$45.61

DURAGESIC PATCH*

$35.70

EXALGO EXTENDED RELEASE tablet

$27.40

MAGNACET TABLET

$26.86

ABILIFY TABLET

$23.73

KADIAN CAPSULE*

$23.01

OPANA ER TABLET*•

$22.11

OXYCONTIN tablet

$21.64

AVINZA CAPSULE

$15.34

SEROQUEL TABLET*

$14.83

figure 4:

GENERIC RELEASEs

brand name

generic name

clinical use

release date

2012 rank by spend

LIDODERM PATCH

$13.62

zyprexa

olanzapine

anti-psychotic

october 2011

skelaxin TABLET*

$13.44

FLECTOR Patch

$12.32

kadian

morphine er capsule

opioid analgesic

november 2011

NUCYNTA TABLET

$11.15

zanaflex capsules

tizanidine capsules

muscle relaxant

february 2012

ADVAIR DISKUS

$9.75

lexapro

escitalopram

anti-depressant

february 2012

BUTRANS TRANSDERMAL patch

$9.63

seroquel

quetiapine

anti-psychotic

march 2012

SPIRIVA CAPSULE

$9.55

plavix

clopidogrel

anti-coagulant

march 2012

CYMBALTA CAPSULE

$8.83

provigil

modafinil

stimulant

April 2012

LORCET TABLET*

$8.38

singulair

montelukast

asthma medication

august 2012

$8.35

xopenex

levalbuterol

asthma medication

august 2012

$8.33

gabitril

tiagabine

seizure medication

october 2012

arthrotec

diclofenac and misoprostol

anti-inflammatory with stomach protectant

november 2012

22 23

NEXIUM CAPSULE LYRICA CAPSULE

LUNESTA TABLET

$7.89

CELEBREX CAPSULE

$6.79

* listed in order of release date * SIGNALS GENERIC AVAILABILITY • only Non-abuse-deterrent formulation

Figure 5:

top 25 generic medications

2012 Rank

2011 Rank

Percentage of generic spend

8.85%

generic name HYDROCODONE/apap TABLET

brand name VICODIN

5.58%

OXYCODONE/apap TABLET

PERCOCET

5.11%

GABAPENTIN TABLET

NEURONTIN

percentage of total generic RX

20.74% PERCENT COVERAGE

Generic Utilization 97.20%

6.21%

94.88%

1.74%

98.02%

4.99%

FENTANYL PATCH

DURAGESIC

1.18%

99.75%

4.51%

GABAPENTIN CAPSULE

NEURONTIN

3.41%

99.97%

3.44%

MELOXICAM TABLET

MOBIC

2.34%

97.18%

3.32%

TRAMADOL TABLET

ULTRAM

5.01%

98.15%

3.09%

OXYCODONE TABLET

ROXICODONE

3.00%

96.72%

2.80%

CYCLOBENZAPRine TABLET

FLEXERIL

4.47%

97.78%

2.53%

METAXALONE TABLET

SKELAXIN

0.73%

99.52%

2.43%

MORPHINE ER TABLET

MS CONTIN

1.23%

99.15%

2.27%

TIZANIDINE TABLET

ZANAFLEX

1.94%

96.16%

2.22%

ZOLPIDEM TABLET

AMBIEN

1.60%

92.09%

2.20%

TOPIRAMATE TABLET

TOPAMAX

0.65%

91.19%

1.68%

OMEPRAZOLE CAPSULE

PRILOSEC

0.86%

100.00%

1.30%

ZOLPIDEM ER TABLET

AMBIEN CR

0.63%

97.76%

1.27%

MORPHINE ER Capsule

KADIAN

0.23%

95.93%

1.21%

TRAMADOL ER TABLET

ULTRAM ER

0.51%

91.94%

1.19%

FENTANYL CITRATE LOZENGE

ACTIQ

0.04%

85.21% 100.00%

1.17%

VENLAFAXINE ER CAPSULE

EFFEXOR XR

0.45%

1.15%

NAPROXEN TABLET

NAPROSYN

1.98%

94.80%

1.14%

CARISOPRODOL TABLET

SOMA

2.48%

95.60%

1.12%

ENOXAPARIN SOLUTION

LOVENOX

0.11%

100.00%

0.89%

ALPRAZOLAM TABLET

XANAX

1.21%

97.03%

0.87%

MODAFINIL TABLET

PROVIGIL

0.05%

100.00%

* rank based on total spend, generic medications

appendix

Figure 6:

sample risk scores of high-risk injured workers

INJURED WORKER Allison

RISK SCORE

REASON

6.5

Multiple Neck Injury, High Total Medication Use (Including Narcotics)

Continued Medication Use, High Risk Prescriber: Allergy and Immunology Specialist

Bob

5.4

Cindy

5.0

Multiple Prescribers in Early Months, High Days Supply of Various Medications

Dwayne

4.5

High Risk State and Moderate Injury Risk: Dislocated Disc

Elaine

3.9

Prescriber Risk: Pain Management Specialist, High Narcotics Use To-Date

Frank

3.1

Moderate Injury Risk, Demographic Risk, and Prescriber Risk: Pain Management Specialist

MORE CONTROL PRODUCES BETTER OUTCOMES

REDUCING MORPHINE EQUIVALENCY PER CLAIM

Laceration: Lower Arm

Burn: Finger(s)

Foreign Body: Eye(s)

Burn: Lower Leg

Strain: Abdomen

Laceration: Knee

Strain: Wrist

Strain: Lower Back Area

Strain: Multiple Neck Injury

Rupture: Shoulder

Poisoning - Chemical: Lungs

Rupture: Disc

Amputation: Lower Leg

Amputation: Multiple Lower Extremeties

figure 7: frequency

and severity of injury types

14 1,000

12 100

8 10

Severity Frequency

6 1

2 0.1

Frequency (1.00 = Average)

Severity (1.00 = Average)

efficiency

appendix

we drive

0.01

Injury Type and Body Part

figure 8: frequency

and severity of selected prescriber types

HIGH

Pain Management Neuropsychiatrist

Neurological Surgeon Spinal Surgeon

Severity

Physical Medicine and Rehabilitation 1

0.1

10 General Practice Ophthalmologist

Preventive Medicine

Obstetrician LOW

0.1 Frequency

HIGH

tHREE YEAR TREND OF FALLING OVERALL COSTS

figure 12: claim

duration of pharmacy use

Percentage of Claims Active

Percentage of Claims Active (still getting pharmacy prescriptions)

120%

(still getting pharmacy prescriptions)

100% Injury Year

80%

2007 2008

60%

2009 ↓ 38.2% in year one

40%

2010 2011

↓ 49.4% in year two

20% 0% 1

Months Since Date of Injury

appendix

Footnotes and Resources 1

Cauchon, D. “Drug prices jump again while other health costs decline.” USA Today. February 13, 2013. www.usatoday.com/story/news/nation/2013/02/13/price-of-a-prescription-rising-again/1918099/

AWP for Provigil 2010 $16.99, 2011 $22.60, 2012 $31.85

“Market Trends.” IMS Health Incorporated., Accessed February 2013. www.imshealth.com/portal/site/ims/ menuitem.856807fe5773bfb9ec895c973208c22a/?vgnextoid=4bffa9dcbcf35310VgnVCM100000ed152ca2RCRD&vgnextfmt=default

Moorman-Li, R., et al., A Review of Abuse-Deterrent Opioids For Chronic Nonmalignant Pain. Pharmacy and Therapeutics, 2012. 37(7): p. 412-418.

“Guidance for Industry Abuse-Deterrent Opioids — Evaluation and Labeling.” U.S. Department of Health and Human Services Food and Drug Administration Center for Drug Evaluation and Research (CDER). January 2013. www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM334743.pdf

“Progress on REMs.” Progressive Medical. Workers’ Compensation Medication Trends Report. 2012. p. 17

Released in March 2012

Unless required by state rule or regulation; the medications may also be approved by a claims professional on a case by case basis

Morgan, D. “FDA panel opposes recommending painkiller, cites safety.” Reuters. December 7, 2012. www.reuters.com/article/2012/12/07/us-usa-fda-opioid-idUSBRE8B619S20121207

Lowry, F. “FDA panel calls for greater restrictions on hydrocodone.” Medscape. January 28, 2013. www.medscape.com/viewarticle/778275

“Controlled substance schedules.” U.S. Department of Justice Drug Enforcement Administration Office of Diversion Control. Accessed February 2013. www.deadiversion.usdoj.gov/schedules/index.html#define

“2006 limited FDA schedule of compounded drug products.” U.S. Food and Drug Administration. March 22, 2010. www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm204237.htm

Denniston, P. “Pain.” Official Disability Guidelines 2009 14th edition. Work Loss Data Institute. 2011. Progressive Medical experience

Jannetto, P.J. and Bratanow, N.C., Pharmacogenomic considerations in the opioid management of pain. Genome Med, 2010. 2(9): p. 66.

“SB 146.” California State Legislature. January 31, 2013. www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0101-0150/sb_146_bill_20130131_introduced.html

“SB 662.”The Florida Senate. February 7, 2013. www.flsenate.gov/Session/Bill/2013/0662%20and%20HB605

“HB 605.” The Florida Senate. February 5, 2013. www.flsenate.gov/Session/Bill/2013/0605

“HB 483.” The Florida Senate. January 22, 2013. www.flsenate.gov/Session/Bill/2013/0483

“SB 1302.” Hawaii State Legislature. www.capitol.hawaii.gov/session2013/bills/SB1302_.htm

“50 Ill. Adm. Code 7110.” Illinois Register. Volume 36, issue 49, p. 17108. December 7, 2012. www.cyberdriveillinois.com/departments/index/register/register_volume36_issue49.pdf

“HB 0174.” Maryland General Assembly. January 18, 2013. www.mgaleg.maryland.gov/webmga/frmMain. aspx?id=HB0174&stab=01&pid=billpage&tab=subject3&ys=2013RS

“R 418.101003a.” Michigan Register. Issue 23 – 2012. January 1, 2013. www.michigan.gov/documents/lara/MR23_010113_406530_7.pdf

“Addition of 12 NYCRR Part 440 and 442.” New York State Workers’ Compensation Board. September 5, 2012. www.wcb.ny.gov/content/main/wclaws/RecentlyAdopted/Part440and442.jsp

“Impact of the Texas pharmacy closed formulary.” Texas Department of Insurance. 2012. www.tdi.texas.gov/reports/wcreg/documents/Pharmacy_closed.pdf

Bill review savings brought about by prescriptions no longer being “out-of-network” and processing efficiencies as telephone calls associated with claimant verification, preauthorization of medications and payment status were eliminated.

Through the application of medication plans and DUR edits, prescriptions found to be unrelated to the workers’ compensation claim, or otherwise inappropriate were not filled

Katz, R. “FDA: Evidentiary standards for drug development and approval.” National Center for Biotechnology Information. July 2004. www.ncbi.nlm.nih.gov/pmc/articles/PMC534930/

Chin, R. and Lee, B. Principles and Practice of Clinical Trial Medicine. 2008. p. 130. www.books.google.com/books?id=HgmrI2r5eo4C&pg=PA130

appendix

We better equip claims professionals to make decisions

We drive efficiency

fewer opioid analgesics

We do what’s right

99.5%

generic efficiency We diminish out-ofnetwork hassles

Long-acting opioid utilization has decreased as a percentage of total prescription volume

Clinical triage guided by a patent-pending multi-variate statistical model progressive-medical.com 800.777.3574