DRUG TRENDS REPORT
TABLE OF CONTENTS
02 03 05 07 09 13 15 16 17 19
Top Therapeutic Classes
Top Utilized Drugs
THERAPEUTIC CLASS TRENDS
23 25 27 29 31 43 43 44 45
Skeletal Muscle Relaxants
LEGISLATIVE AND REGULATORY HIGHLIGHTS
ABOUT HEALTHCARE SOLUTIONS
METHODOLOGY Representing more than 2.7 million prescriptions, Healthcare Solutionsâ€™ 2015 Drug Trends Report is based on in-network paid pharmacy transactions in a comparison of 2014 to 2013. It excluded customers with less than two years of history and prescriptions with insufficient therapeutic descriptions, such as powders and bulk chemicals.
1 | Healthcare Solutions
Healthcare Solutions is pleased to present our fifth annual workers’ compensation Drug Trends Report. This comprehensive analysis is based on changes in prescription drug costs and utilization patterns in 2014 as compared to 2013. We provide the Drug Trends Report in an effort to help clients understand medication trends within the workers’ compensation market. The following are highlights found in our overall book of business: Generic/AWP Inflation
Healthcare Solutions experienced an overall 8.6% increase in the cost of prescription medications, resulting in a drug spend increase to our clients. Although an increase, Healthcare Solutions’ oversight helped to ensure our clients experienced less than the full effect of these inflationary prescription medication pressures.
2015 DRUG TRENDS EXECUTIVE SUMMARY Legislative Healthcare Solutions continues to support the efforts of state legislators to develop and implement formularies and guidelines for the management of workers’ compensation claims. In 2014, states that adopted guidelines saw positive results in terms of drug mix and drug spend. In this year’s report, we present compelling insights from data in our book of business, overlaid with industry trends, to give you a market-wide view into drug costs and utilization. As always, our pharmacy clinicians are available to discuss any of the information presented in our 2015 Drug Trends Report.
New specialty medications to treat Hepatitis C were released in 2014, which impacted payers who provide workers’ compensation benefits to healthcare workers. Costs of these medications can be upward of $100,000 per treatment and will significantly impact payers’ drug spend in the future. Compounds
Healthcare Solutions observed an upward trend in the number, complexity and cost of compounds in 2014. This trend highlights the importance of having a pharmacy benefit manager (PBM) partner that can implement appropriate tools to mitigate the rise in compound costs. Opioids Issues related to the use of opioid medications continue to dominate discussions in the workers’ compensation marketplace; however, Healthcare Solutions will not let familiarity with the issue lead to complacency. Healthcare Solutions’ clients who utilize our targeted opioid intervention tools continue to see improved management of opioid spend.
2015 Drug Trends Report | 2
Through our subsidiary companies, Healthcare Solutions has over 50 years of combined experience delivering services for the workersâ€™ compensation and auto/personal injury protection markets.
OVERALL TRENDS OVERALL TRENDS Healthcare Solutions aids clients in understanding trends that impact their spend and collaborates to reduce overall costs. In 2014, Healthcare Solutions’ book of business saw a 4.1% increase in the total pharmacy spend. This is attributable to an increase in the cost of prescription medications. The Average Wholesale Price (AWP) is the industry standard for pricing prescription medications. The rate of AWP inflation in 2014 for brand name and generic medications was 12.5% and 7.9% respectively. When aggregated, the result was an overall increase of 8.6% to the price of prescription medications. Drug mix dropped by 1.4% and prescription count decreased by 3.1% in 2014. Across Healthcare Solutions’ book of business, clients experienced less than half the inflationary pressures of the rising cost per prescription medication, largely due to clinical oversight programs. Factors contributing to the rise in AWP inflation include the changes in drug Schedules (e.g. hydrocodone/acetaminophen) and unexpected increases in price for generic drugs, which had historically remained flat year over year.
Healthcare Solutions’ Clinical Programs Helped Lower the Impact of AWP Inflation
8.6% Increase in AWP Inflation
Decrease in Prescription Volume
Decrease in Drug Mix*
4.1% Increase in Total Spend
*Drug Mix = Increased Generic Use / Decreased Brand Drug Use
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GENERIC/AWP INFLATION GENERIC/AWP INFLATION
Brand Price Trending The greatest impact of brand trending for AWP in 2015 will likely surround OxyContinÂŽ. Although there have been limited releases of the generic formulation, currently the brand name product had a 20% increase in AWP as of January 2015.
Generic Price Trending As noted in the trending section of this report, there were some significant inflationary factors regarding generic product pricing. One of the main contributors to the overall increase in spend was the AWP increase in hydrocodone with acetaminophen combination products (HCPs). Figure 1 demonstrates the influence regulations had on increasing medication cost. In the first week of October 2014, HCPs were moved from a Schedule III to a more restrictive Schedule II status. The Federal government made the decision that HCPs were more abused and more dangerous to the population than previously considered. The manufacturers are now required to follow stricter guidance, management and label changes which resulted in an increase to the AWP for the medication.
Cost per pill for generics will continue to rise as newer medications come off patent.
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There were many contributors to AWP inflation rate for brand and generics. Overall, Healthcare Solutionsâ€™ book of business experienced a 12.5% increase in brand drug AWP and 7.9% increase in generic AWP. Individual clients may experience different increases in their brand and generic AWP price depending upon drug mix, state fee schedules and generic substitution rates. The brand inflationary rates were on par with 2013 trending.
Healthcare Solutions notifies clients of medication changes through our Pharmacy eAlert Program.
Hydrocodone/Acetaminophen 5/325 Qty 50 Average AWP (AAWP) Price Trends 2013-2014
5 | Healthcare Solutions
Utilization of generic medications has historically provided cost savings to payers, but recent trending demonstrates generics today are much more expensive per unit than those of generics previously released. In reviewing medications that have recently come off patent, this trend becomes an expensive proposition for payers (Figure 2). As an example, Lidoderm® had a list price of $11.50 per patch and its generic listed for $9.50, only a 17% difference between the brand and generic. Cymbalta® (20 mg) also had similar pricing when its generic was released; $8 for brand and $7 for generic. This represents only a 13% difference in the cost of the brand compared to the generic. Conversely, Percocet was priced at $4.20 per unit for brand and only $1.30 for its generic when it was released; a 70% difference. The AWP of new generics is averaging only 10% below the original manufacturer’s price, a vast difference from the 70% difference seen only a few years ago.
Percent Savings of Drug Cost at Time of Generic Release Today’s generic releases produce less savings. Percocet
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100 80 60 40
The impact of newer generic pricing will require payer’s consideration in setting reserves and settling cases through the Medicare Set-Aside (MSA) process. Healthcare Solutions’ pharmacist and physician reviews promote lower cost therapeutic alternatives, when appropriate, to drive down costs. L
0 Previous Generic Releases
New Generic Releases
Step Therapy Figure 3
Generic Competition and Drug Prices1
There are other dynamics in the generic market adding to AWP inflation. Several key pharmaceutical companies are either being acquired (reducing competition) or pulling out of manufacturing less profitable drugs. In the generic drug market, it has been demonstrated that competition leads to reduced drug prices, as referenced in Figure 3. On average, the first generic manufacturer of a brand medication reduces the price of the medication by 6%. However, the appearance of a second generic manufacturer results in the average price per dose decreasing to half of the brand name product price. As additional generic manufacturers enter the market for a given medication, the price continues to drop, resulting in further savings. If manufacturers continue to merge or leave the market, we will continue to see price increases to generic medications.
Number of Generic Manufacturers
Step therapy protocols represent a tool to offset S ER VIC brand and generic price trends and improve drug mix. Step therapy protocols target claimants receiving high cost, brand name medications and convert them to more cost effective generic alternatives. The successful intervention negates some of the impact of a brand to generic release, as the claimant would already have been on a more cost effective alternative medication. Payers may realize a greater reduction in spend through the use of step therapy protocols than the reliance on a medication going generic.
Average Relative Price per Dose Graph adapted from U.S. Food and Drug Administration website.
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GENERIC SUBSTITUTION GENERIC SUBSTITUTION In 2014, 83.1% of all medications dispensed were generics. The use of generic medications are associated with reduced costs. According to the U.S. Food and Drug Administration (FDA), payers realized savings of billions of dollars every week through the use of generic medications.2 Furthermore, the FDA demonstrated through numerous studies that generic drugs are just as effective as their brand name counterparts.3 However, not all eligible medications are dispensed generically.
The generic dispense rate for 2015 is already trending at 84.1%; this increase is being driven by the release of generic Celebrex速.
When a medication is dispensed as a brand, despite a generic alternative option existing, an opportunity for generic medication use is missed. In 2014, 97.3% of eligible medications were dispensed as a generic. Healthcare Solutions conducted a study to evaluate barriers to 100% generic drug utilization and examined why prescribers utilize brand name medications, while generic options are available. Results of the study are discussed on the following page.
Generic Dispense Rate Trends 2011 - 2014
Generic dispense rate has been consistently increasing by an average of 3.7% from 2011 to 2014.
83.1% 79.2% 76.4% 71.9%
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DAW: Gimme the “Good Stuff” The generic substitution rate is the percentage for all medications dispensed as generic and measures how often a generic is dispensed when a generic version of a prescribed drug exists. The generic substitution rate; therefore, examines the effect prescriptions dispensed as brand (despite having an eligible generic alternative) have on a book of business. In electronic prescription processing, selection of a brand or generic medication is communicated through the use of Dispense-As-Written (DAW) codes. The single digit, 0-9 field captures claimant, prescriber and pharmacy factors that can impact generic substitution rate.
Almost half of the DAW1 prescribers claimed the generic was ‘ineffective’ for their claimant. Additionally, 22% of prescribers reported their claimant experienced an adverse effect with the use of the generic. This response; however, conflicts with published data from the FDA. The FDA has found generic medications are not inferior in efficacy or safety compared to their brand name counterpart.3 As a result, there is an opportunity to reduce prescribers use of brand name medication and improve the generic substitution rate.
There are several DAW codes which can be utilized by dispensing pharmacies that can impact the use of brand and generic medications. Our study did not find any occurrences of these codes being utilized. Nonetheless, pharmacy outreach and education may be a tool utilized to maximize the dispensing of cost effective therapy to claimants and reduce spend for payers we support.
While pharmacy and workers’ compensation regulations on generic substitution vary by state, claimants may request the brand name version of a medication even though it has an approved generic substitute. This claimant preference is recorded during electronic prescription processing with a DAW code, specifically a code 2 (DAW2). In these situations, within Healthcare Solutions’ book of business, a claims examiner’s approval is required before the use of the brand name product. Claimant brand preference may result from a variety of factors, including lack of co-pay incentive, perceived inferiority of generics, feelings of entitlement and others. As a result, targeting claimants through claimantcentered outreach represents one means to improve generic substitution rate.
Prescriber Factors Prescriber preference for brand name medication over a generic alternative is documented by a DAW code of 1 (DAW1) during claims processing. Surprisingly, prescribers, more so than claimants, play a large role in whether a generic alternative is dispensed to a workers’ compensation claimant. In our 2014 study, DAW1 accounted for 91% of all brand name medications eligible for generic substitution (the other 9% was claimant preference). Healthcare Solutions reached out to these DAW1 prescribers to examine why their claimants required use of brand name medications.
Top Prescriber Reasons for DAW14
49% Generic Ineffective
22% Adverse Effect
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SPECIALTY DRUGS SPECIALTY DRUGS In 2014, the FDA approved 41 new therapies, including 11 medications through its biologics division.5 Biologics, and similar therapies, are representative of a future trend in prescription drug spend--the rise of specialty medications. As the fastest growing costs in health care today, specialty drugs have the potential to change the way prescription benefits are provided in the future.6 Payers may not recognize how specialty drugs are affecting their drug spend. Specialty medications can be masked through major medical costs. Specialty drugs like Enbrel®, Humira® and Synvisc® can be processed as a major medical expense via paper bills (typically under a miscellaneous J-code) and therefore, not recognized by payers as a pharmacy expense. This leaves payers with little visibility into the costs of these medications within their book of business and a lack of tools to control these costs. Due to the high costs of specialty medications, payers should require due diligence when claimants receive these medications. This includes: • • • • •
Proper medication handling Medication administered appropriately Monitoring of claimant Medication’s desired results Medication’s side effects on the claimant
At $1,000 per pill for some of these specialty medications, making sure a claimant can tolerate the side effects becomes vital to managing the cost of the claim. In 2014, new specialty medications were released to treat Hepatitis C. This highlights some of the potential issues specialty medications present to payers of workers’ compensation benefits. Healthcare Solutions identifies specialty medications that are part of the paper bill process. Upon identification of a biologic (specialty medication), Healthcare Solutions provides the information to the specialty network to partner with the claims examiner, claimant and prescriber to move these medications into the network. This provides the claimant with case management oversight to ensure appropriate compliance and to help mitigate/manage adverse side effects to enable full course of treatment. Clients gain transparency into the specialty medication spend and will likely experience decreased costs through Healthcare Solutions’ contracting and clinical oversight. 9 | Healthcare Solutions
What are Specialty Drugs? While not clearly defined in the industry, specialty drugs are typically those medications which have one or more of the following characteristics: • • • • •
Special handling instructions Complex administrations Monitoring requirements (e.g. blood work) High costs Treat complex/chronic disease states7
Specialty Medications Commonly Processed as a Major Medical Expense Drug
Cost (per month)
Enbrel® 50 mg/ml (4 syringes)
Humira® 40 mg/0.8 ml (2 pre-filled syringes)
Synvisc® 16 mg/2 ml (per knee injection)
HEPATITIS C DRUGS - What They Could Mean for Payers C
Approximately 4.2% of all new Hepatitis C cases are from healthcare workers.9 Many payers of workers’ compensation coverage to healthcare workers had their first experience with specialty medications. The new Hepatitis C medications, such as Harvoni®, Olysio® and Sovaldi®, have a treatment success rate of 94-100%, or double that of previous therapies. These medications cost $90,000 to $226,000 for a 12 to 24 week course of therapy. Effectively, a client with $1 million drug spend could experience a 2% increase in overall drug spend with one claimant receiving these medications.
Healthcare Solutions has a specialty medication network that provides discounted rates and management oversight in claimants’ receiving specialty medications. Case managers work with the claimant to manage reordering, mitigation of side effects and assure claimant compliance. All this helps to ensure improved claimant outcomes and maximum cost effectiveness. Through the paper bill process, Healthcare Solutions aids payers in identifying these types of drugs and works with adjusters and physicians to move claimants toward the specialty network. ER VIC
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Hepatitis C is defined by the Centers for Disease Control and Prevention (CDC) as, “a contagious liver disease that ranges in severity from a mild illness lasting a few weeks to a serious, lifelong illness that attacks the liver.”8 Discovered in 1989, initial Hepatitis C treatments became available in 1991 and had a success rate of 6%. Treatment duration was between 24-48 weeks with costs ranging from $1,800 to over $88,000 (Figure 7).
Specialty drugs represent the future of the pharmaceutical industry and the new Hepatitis C treatments demonstrate the effectiveness. Once more terminal than HIV, Hepatitis C can now be cured in the majority of cases.10
Comparative Costs of Previous and Current Hepatitis C Treatments These regimens typically require other medications to support the management of the Hepatitis C treatment plan. Total cost in the below chart reflects only the cost of the medication listed and not the total cost for other medications needed for treatment regimens. Relapse occurs in many cases as well and the claimant continues to run the risk of requiring a liver transplant unless the disease can be managed.
Cost per Treatment
$1,814 - $28,815
Peginterferon - alfa-2a (Pegasys®)
$44,425 - $88,850
Peginterferon - alfa-2b (PegIntron®)
$16,083 - $18,617
8 - 24 weeks
12 - 24 weeks
12 - 24 weeks
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SPECIALTY DRUGS Pain Medications of the Future While the release of new Hepatitis C medications in 2014 demonstrated the potential impact specialty medications can have on payers, most specialty medications generally treat rare diseases affecting small claimant populations. Currently, there are some specialty medications under development that target larger claimant populations. Pfizer Inc. and Eli Lilly and Company are currently developing tanezumab, a new, non-narcotic medication to treat chronic pain. Chronic pain is common in the workers’ compensation market, with “nearly one in five adults” suffering from this condition.11 Tanezumab is a humanized monoclonal antibody that has demonstrated benefits at reducing pain in clinical trials. Tanezumab selectively targets nerve growth factor (NGF), a regulator of pain processing and sensitivity; inhibiting activation of pain-signaling neurons. NGF levels have been shown to increase as a result of injury or inflammation and in claimants in chronic pain states.11 In this way, tanezumab can provide non-addictive pain relief. Specialty medications, such as tanezumab, may change how we treat pain management in the future.
It is estimated that nearly “one in five adults suffer from chronic pain.”11 This condition is common in the workers’ compensation market.
11 | Healthcare Solutions
In the last stages of development, tanezumab has the potential to offer an innovative treatment to help millions suffering from painful conditions, according to its drug manufacturers.11 However, this medication may add a significant cost to payers who cover chronic pain claimants. Healthcare Solutions will monitor the effects of this new specialty drug in 2015. As these complex therapies continue to emerge in the market, many payers are hoping biosimilars will provide lessexpensive alternatives to current brand-name specialty medications.
Biosimilars are manufactured duplicates of current specialty biologic medications. Compared to the traditional release of a generic for a brand name medication, biosimilars take longer and can cost more to duplicate the branded biologic product. As a result, this higher up-front investment on the part of the manufacturer is likely to lead to reduced cost-savings.12 Furthermore, whereas brand and generic medications may be interchanged following completion of the well-established FDA approval process, biosimilars are struggling. Many questions remain concerning the biosimilar standard for interchangeability which currently limits the benefit these medications may have. This demonstrates the need for specialty medication network development and case management oversight to effectively manage specialty medications.
Neupogen, a brand name biologic product, has a cost between $350-$400 per dose.
Zarxio, the first biosimilar product approved in the U.S., does not currently have pricing; however, when Zarzio速 (the equivalent to Zarxio) was released in Europe, it had a price discount of 26%.13
Biosimilars vs. Traditional Generic Medications Manufacturing Process
Traditional generic medications cost less to produce, resulting in higher cost savings. Up-front investment by manufacturers most likely will lead to reduced cost savings for biosimilar medications.
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COMPOUNDS COMPOUNDS Compounding is the practice in which a licensed healthcare professional combines, mixes or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.13 Compound drugs are not FDA-approved, meaning the FDA has not evaluated these medications for safety or efficacy, nor has the FDA ensured they were manufactured in facilities that meet federal standards. Because of this, compounds have primarily been reserved for instances when commercially available medications are not appropriate for a patient. For example, medications may be compounded when a patient cannot swallow and require liquid medication that is only available in tablet form. However, the rise in complexity of compound medications suggests this is no longer the case.
In the past 4 years the average cost of compounds has escalated 225%. Paper bills played a large role in this increase as they increased 317% for the same time period. Figure 7 illustrates the increase in average cost of compounds as well as the average cost of paper bill and point of sale for 2011 through 2014. In California, paper bills for compounds have resulted in that state leading the nation in compound utilization at 13.2% of total medication utilization. So how can payers mitigate the escalating costs? The tools Healthcare Solutions has helped clients implement to mitigate the rising costs of compounded medications are discussed on the following page.
Compound Drug Trends
In the past 4 years, the average cost of compounds has escalated 225%, with paper bill and point of sale costs increasing 317% and 214% respectively.
Cost of Compounds
Paper Bill Compounds $0
Point of Sale Compounds 2011 2011
Average PB Spend
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Average POS Spend
COMPOUNDS Reducing the Cost of Compounds Although California may be the nation’s leader in compound bills, multiple tools exist for payers in this state to leverage to reduce their spend on compound medications. These tools include the use of a pharmacy benefit network (PBN), utilization review (UR) and a collaborative care model. While each solution presented below may not fit the philosophies of all clients, each provides a lower cost alternative. When one gate fails, the next gate is recommended. Gate 1: Establish a PBN in California: Similar to medical management, a pharmacy benefit network (PBN) functions like a medical provider network (MPN). California law allows employers to utilize a directedcare network of pharmacies, identified as the PBN. By notifying all stakeholders, clients utilizing a PBN are able to direct a claimant’s use of pharmacies to only those that are in the PBN. In California, payers are able to require claimants to utilize their PBN.14 If a prescription, including a compound, comes from an out-of-network pharmacy, a payer may defensibly deny the medication. Healthcare Solutions has a PBN in California; as 80% of compound bills are out-of-network, this mitigates much of the cost. Gate 2: Utilization Review: Utilization review (UR) is a review by a medical professional to determine medical appropriateness. In California and other jurisdictions, these determinations are defensible and allow payers to deny bills if the review finds the medication noncertified. In the instances of compound medications, more than 90% of compounded medications are non-certified and payers do not have to reimburse compound medications. Gate 3: Compound Medication Review: A comprehensive, collaborative approach where a pharmacist reviews and S ER VIC summarizes medical literature for evidence concerning the active compound ingredients and a nurse identifies alternatives based on the review of evidence, past therapies, claimant medication history and current formulary. Following this review, the nurse contacts the provider to collaborate on appropriate alternatives for the claimant. I LIN CA
Tools for Reducing Compound Medication Costs Gate 1: Establish a PBN in California Gate 2: Utilization Review Gate 3: Clinical Compound Review Gate 4: Peer Review Gate 5: Independent Medical Examination
Gate 4: Peer Review: The peer review examines the claimant’s medication history and medical records over the last year using a peer physician. The peer review physician contacts the prescribing physician to discuss the appropriateness of the compound medication and makes recommendations for alternative management. Gate 5: Independent Medical Examination: An Independent Medical Examination (IME) occurs when a peer review physician reviews the historical records in the claimant’s charts and performs a physical examination of the claimant. There is no prescriberclaimant relationship and no contact between the reviewing physician and the treating physician. After review and examination, a report is prepared containing recommendations regarding the future management of the claimant. As costs and utilization continue to escalate for compounds, state and federal agencies are starting to explore regulatory or legislative controls to alleviate the burden these medications are placing on the health care system. Some of these legislative actions are discussed in greater detail in the Legislative and Regulatory Updates section in this report.
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TOP THERAPEUTIC CLASSES TOP THERAPEUTIC CLASSES The therapeutic class trends remained similar in 2014 as compared to 2013, in terms of utilization and spend. Utilization was captured in terms of number of prescriptions for drugs within a therapeutic class. The average number of scripts per claimant decreased from 9.6 in 2013 to 9.2 in 2014; resulting in a reduction of 5.1%. Generic dispense rate (GDR) increased to 83.1% in 2014. This is an increase of 3.9% from 2013. Research indicates that for every 1% increase in GDR, a client saves 1.3%.15 The top five therapeutic classes are reviewed in further detail in this report.
Top Therapeutic Classes by Spend Class Spend Change Analgesics - Opioid 33.4 % 1.4 % Anticonvulsants 12.8 % 0.5 % Analgesics - Anti-Inflammatory 9.7 % 1.0 % Antidepressants 6.9 % -1.4 % Dermatologicals 6.5 % -0.9 % Skeletal Muscle Relaxants 6.5 % 0.4 % Ulcer Drugs 2.9 % -0.2 % Hypnotics 2.7 % -0.3 % Antipsychotics/Antimanic 2.3 % 0.1 % Antiasthmatic/Bronchodilator 1.8 % 0.2 % Top Therapeutic Classes by Prescription Count Class Prescription Change Analgesics - Opioid 34.7 % -0.4 % Analgesics - Anti-Inflammatory 12.8 % 0.5 % Skeletal Muscle Relaxants 10.8 % 0.2 % Anticonvulsants 9.2 % 0.4 % Antidepressants 7.0 % 0.1 % Dermatologicals 3.6 % 0.1 % Hypnotics 2.5 % -0.2 % Ulcer Drugs 2.4 % 0.1 % Antianxiety Agents 2.4 % -0.2 % Corticosteroids 1.3 % 0.1 %
Generic dispense rate (GDR) increased 3.9 percentage points for a total of
fueled primarily by generic launches for Lidoderm速 and Cymbalta速 late in 2013 and the Celebrex速 generic launch late in 2014.
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TOP UTILIZED DRUGS TOP UTILIZED DRUGS - By Spend and Prescription Count Healthcare Solutions saw movement in the top ten drugs by spend in 2014. The generic release of Lidoderm® (lidocaine) and Cymbalta® (duloxetine) were the driving factors behind this shift. These drugs were ranked two and three, respectively, in 2013 and their generic counterparts were seven and eight in 2014. As previously stated in the Generic/AWP Inflation section of this report, generic medications are resulting in less savings to clients than in previous years. For example, in 2011, brand name medication Levaquin® went generic. At the time, the generic medication was 20% less expensive then the brand name. However, at the end of 2014 when Celebrex® came off patent, the generic resulted in only a 10% decrease in cost. This example demonstrates that the change in drug cost following a generic release is lower than historic trends. This difference is partially responsible for the increase in spend for generic medications. OxyContin®, Lyrica® and Celebrex® were the only brand name products in the 2014 top ten drug list by spend. We expect another realignment in 2015 with the release of generic Celebrex®. There was a decrease in prescription count for HCPs, which was anticipated as the medication moved from a Schedule III to a Schedule II. The slight increase in utilization for tramadol (Ultram®) was likely due to this reclassification. The medication took the number two spot, replacing gabapentin (Neurontin®).
Top Utilized Drugs by Spend Class Spend Change OxyContin® 7.1 % -0.5 % Lyrica® 6.3 % 0.5 % Celebrex® 4.2 % 0% Oxycodone/Acetaminophen 4.1 % 1.9 % Hydrocodone/Acetaminophen 4.0 % 0.1 % Gabapentin 3.9 % 0% Duloxetine HCL 3.3 % 3.2 % Lidocaine 3.0 % 2.1 % Oxycodone HCL 2.0 % 0.8 % Morphine Sulfate 1.8 % 0.3 % Top Utilized Drugs by Prescription Count Class Prescription Change Hydrocodone/Acetaminophen 14.8 % -0.9 % Tramadol HCL 4.9 % 0.2 % Gabapentin 4.6 % 0.4 % Cyclobenzaprine HCL 4.2 % 0.2 % Oxycodone/Acetaminophen 4.1 % 0.2 % Ibuprofen 3.5 % 0.2 % Lyrica® 2.8 % -0.1 % Oxycodone HCL 2.3 % 0.3 % Naproxen 2.2 % 0.2 % Celebrex® 2.1 % -0.2 %
Lyrica® and Celebrex® were the only two brand name medications in the top ten drug list by prescription count. Celebrex® became generically available in December 2014, while Lyrica® is anticipated to become generically available in 2018.
Hydrocodone/acetaminophen combination products (HCPs) moved from a Schedule III to a Schedule II medication.
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Healthcare Solutions continues to adapt to ongoing industry transformation and advancing medical technologies to bring outcome-based clinical solutions to our clients. Our clinical solutions are the most targeted way to
streamline prescription costs while maintaining the safety of the claimant.
THERAPEUTIC CLASS TRENDS PHARMACOGENOMICS Pharmacogenomics (PGx) is the study of the role of genetics in drug response. Identifying claimant genes that affect drug therapy allows for personalizing the medication mix to decrease drug side effects and increase drug effectiveness, leading to cost savings. However, such personalized medicine is an admirable goal whose time has not yet come, particularly in the context of pain which is complex, subjective and multifaceted.16 You can have a gene for a specific disease type; however, this does not mean it has been triggered to be active. X does not always equal Y in these tests. In addition to genetic factors, claimant responses to drugs can vary for many reasons, including: • • • •
Drug interactions with food or other drugs Claimant age and gender Claimant diseases Medication adherence
Although a pharmacogenetic test may identify how an enzyme behaves in the claimant’s body, drug receptors are complicated and likely to involve more than one gene as well as being influenced by the environment.17 Any drug dosage changes that are recommended based on pharmacogenomic test results have not yet been validated by prospective clinical studies. In addition, improved clinical outcomes have not been demonstrated when the drug therapy or dose selected is based on genetic testing versus routine clinical care. So why all the hype around PGx? Today, it is recognized that CYP2D6 enzymes metabolize about 25% of drugs used clinically, including antidepressants and opioids.18 As a result, CYP2D6 genotyping is offered by most PGx testing laboratories and results are reported as an inferred metabolic phenotype. The complexity and variation does not stop at how the enzymes impact drug metabolism. There is a lack of consistency in lab test interpretation surrounding the enzyme which may confuse clinicians and claimants, and affect the clinical utility of the reported results.19 Providers and claimants need to be educated on the availability, interpretation, potential benefit, current limitations and non-standardized results of PGx testing. Clinical studies need to be adequately powered, reproducible and demonstrate therapeutic value and cost effectiveness of PGx testing. In addition, guidelines need to be developed that help identify when and whether genetic testing is indicated before results of pharmacogenetic testing can be applied to routine medical care. The future of personalized medicine is exciting, and while we are heading in that direction, we are not there yet.
Test does not identify environmental influences such as drug or food interactions
Labs are not standardized across the industry
Having a gene does not mean it is ‘turned on’
Genetic Information Nondiscrimination Act (GINA) Title II of Genetic Information Nondiscrimination Act (GINA) prohibits the use of genetic information in making employment decisions, restricts employers from requesting, requiring or purchasing genetic information, and strictly limits the disclosure of genetic information. There is, however, an exception under GINA for workers’ compensation. GINA’s final rule states that when an employer makes a request for medical information related to a workers’ compensation injury, the employer should warn the employee or the health care provider from whom the information was requested that the employee or health provider should not provide genetic information to the employer. The warning may be in writing or provided verbally (if the employer typically does not make such requests in writing). The U.S. Equal Employment Opportunity Commission (EEOC) has indicated that, to take advantage of this exception, the employer must do what is reasonably necessary to ensure the warning is understood by employees or doctors submitting health-related information. Although generally not mandatory, it is advisable to obtain written consent of the claimant regardless of any regulatory requirements. Claimant consent could be obtained in conjunction with the warning required by GINA.
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OPIOID ANALGESICS OPIOID ANALGESICS Opioid medications remain the most common drug class in Healthcare Solutionsâ€™ book of business in terms of spend and number of prescriptions. This is consistent with the trend we observed in 2013. As noted previously in this report, HCPs have significantly increased in their AWP, while the spend trend has decreased. The increase in AWP may be due to two market dynamics: (1) the reclassification of HCPs from Schedule III to Schedule II and/or (2) the reformulations of many HCPs due to FDA requirements to limit the amount of acetaminophen permitted in HCPs. Since HCP was rescheduled in October of 2014, the impact of rescheduling is only observed in the last quarter. From October through end of 2014, HCP utilization dropped on average 20% across the book of business. Physicians appear to be moving claimants towards acetaminophen with codeine as an alternative to HCPs. Acetaminophen with codeine products utilization increased by 4% over the previous year. There were no significant changes identified in the utilization of other Schedule II opioid medications within this time frame. This suggests the HCP utilization decrease did not result in a potential increase of any other Schedule II opioid medications. However, the decrease in HCP use in the fourth quarter of 2014 may have led to increases in other drug classes such as non-steroidal antiinflammatory drugs (NSAIDs).
20% reduction of hydrocodone/
acetaminophen combination products (HCPs) due to the rescheduling of the medication.
19 | Healthcare Solutions
OPIOID ANALGESIC TRENDS 2014 Compared to 2013
Acetaminophen with codeine increased in utilization as a result of scheduling reclassification of HCPs.
OxyContin® spend decreased by 2.5%.
Another significant trend observed within the opioid drug class was the increase in the AWP of oxycodone with acetaminophen. Since the start of 2013, there has been a 160% increase in the AWP of this medication. As expected, spend on oxycodone with acetaminophen increased in 2014; however, the increase was not as high as anticipated. This was attributed to a decrease in the number of claimants using this product. Healthcare Solutions has targeted clinical solutions that intervene early in the life cycle of a claim to produce positive results.
Top Opioid Analgesics by Spend Drug Name 2014 OxyContin® 21.3 % Oxycodone/Acetaminophen 12.3 % Hydrocodone/Acetaminophen 11.9 % Oxycodone HCL 5.8 % Morphine Sulfate 5.5 % Tramadol HCL 5.4 % Fentanyl 5.3 % Percocet 3.6 % Opana ER® (crush resistant) 3.4 % Duragesic® 2.5 %
Change -2.5 % 5.3 % -0.3 % 2.2 % 0.6 % -0.7 % -0.7 % 0.5 % -1.3 % -0.1 %
Top Opioid Analgesics by Prescription Count Drug Name 2014 Change Hydrocodone/Acetaminophen 42.7 % -2.1 % Tramadol HCL 14.0 % 0.6 % Oxycodone/Acetaminophen 11.7 % 0.6 % Oxycodone HCL 6.6 % 0.9 % OxyContin® 5.2 % 0.1 % Morphine Sulfate 3.8 % 0.2 % Fentanyl 2.5 % 0.1 % Tramadol/Acetaminophen 1.6 % -0.1 % Acetaminophen/Codeine 1.7 % 0.1 % Hydromorphone HCL 1.4 % 0.2 %
Oxycodone/Acetaminophen’s AWP increased by
$ 160% by the end of 2014.
2015 Drug Trends Report | 20
EARLY INTERVENTION REDUCES RISK OF CHRONIC OPIOID USE
20-30% of opioids prescribed for chronic pain are being misused 20
1. Opioid doses greater than 120 mg morphine equivalent dose (MED) per day 2. Previous opioid use 3. Opioid misuse
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Healthcare Solutions has developed innovative programs that promote early intervention and prevent the costly consequences of long-term S ER VIC opioid use. Opioid Defense Manager® (ODM®) identifies claimants after 30 days of opioid use within 60 days. Upon identification, Healthcare Solutions starts the process with claimant education on the safe use and risks of opioids. Following enrollment into ODM®, a team of nurses and pharmacists conduct interventions every 60 days with the treating physician to monitor the claimant while they are on opioids. This collaborative care model focuses on claimant safety through the use of pain contracts and urine drug monitoring. C
One of the guiding principals for pain management released by the New England Journal of Medicine and the Institute of Medicine Committee states, “Chronic pain has such severe effects on all aspects of a person’s life that every effort should be made to achieve both primary prevention and secondary prevention through intervention.”22 The committee has recognized the appropriateness and safety of using opioids in certain pain situations such as acute, post-operative, procedural and end of life pain.
Pain conditions dominate the workers’ compensation market. Chronic opioid use can be associated with prolonged disability and a reduction in return to work. Chronic claims are associated with a higher spend not just in opioids, but in overall medication costs. The average drug spend per claim at Healthcare Solutions is approximately $1,000 per claimant per year. However, after five years, the average drug spend per claim is over $4,000 per year. A correlation can be made from the TROUP study that early claim intervention can decrease drug spend.
Sixty-five percent of patients who receive 90 days of continuous opioids will still be on opioids five years later, according to the TROUP study published in the Journal of General Internal Medicine.21 Factors contributing to the continuation of opioids were:
Early Intervention Results - claim with date of injury of less than three years
POWERFUL CLINICAL OUTCOMES
70% 48% 65% 73% Decrease in MED after 90 days in the ODM® program
Lower opioid costs
Fewer opioid prescriptions
Overall Program Results - for all claims
47% 33% 25% 57% Decrease in MED after 90 days in the ODM® program
21 | Healthcare Solutions
Lower overall pharmacy costs
Lower overall pharmacy costs
Lower opioid costs
Fewer opioid prescriptions
ODM® Intervenes Early in the Claim Process
CLAIMANT IDENTIFICATION 30 days opioids in last 60 days
FOLLOW-UP 60 day follow-up
NURSE INTERVENTION Opioid Progress Report (OPR) Pain Agreements Medication History/Formulary
“ODM’s claimant-centered approach and collaboration with prescribers is remarkable. We started using ODM® almost one year ago, and we’ve already seen the number of injured workers receiving opioids decrease more than 30%. The web-based processes for tracking and managing our claims are easy to use and seamless for our claims adjusters. ODM® balances appropriate opioid therapy in claimant care and treatment.” - Jennifer Hertzfeld
Assistant Vice President, Workers’ Compensation Claims The Motorists Insurance Group
2015 Drug Trends Report | 22
ANTI-INFLAMMATORIES ANTI-INFLAMMATORIES Non-steroidal anti-inflammatory drugs (NSAIDs) are commonly utilized to treat acute and chronic pain. As a result, these medications are common in the treatment of work-related injuries.23 In 2014, there was an increase in the number of NSAID prescriptions utilized within Healthcare Solutions’ book of business. Our data suggests this increase may have resulted from interventions targeted at chronic opioid users as well as the rescheduling of HCPs in October 2014. In both instances, prescribers likely needed alternative treatment options for pain, which resulted in the increased NSAID use. The most significant change to this class was the release of generic Celebrex® in December 2014. Initial data demonstrates nearly a 90% conversion rate from brand to generic in just the first few weeks of its release. In 2013 and in 2014, Celebrex® was the number one medication in terms of drug spend in this drug class. The generic release of Celebrex® is expected to result in decreased spend for clients in the coming year. With Celebrex® going generic, new trends are being observed in this drug class. One trend is an increased prevalence of combination products containing an NSAID and a gastroprotective. Specifically, Duexis®, a combination product of famotidine (Pepcid®) and ibuprofen (Motrin®), and Vimovo®, a combination product of naproxen (Aleve®) and esomeprazole (Nexium®), are increasing in spend and utilization. These combination products add costs to the system without providing significant gains in claimant care. The ingredients in these combination products, namely Pepcid®, Motrin®, Aleve® and Nexium®, can all be purchased over-the-counter at a fraction of the cost. Despite Duexis® or Vimovo® representing less than 1% of transactions, both medications appear in the top 10 drugs by spend in this drug class. The other trend observed is the resurgence of older NSAIDs re-entering the market as branded products with new technology that delivers the same medication, at significantly lower doses. Such products include the
23 | Healthcare Solutions
ANTI-INFLAMMATORY TRENDS 2014 Compared to 2013
Anti-Inflammatory medication spend and utilization increased was likely caused by the reclassification of hydrocodone with acetaminophen combination products (HCPs).
re-formulated diclofenac products, Zipsor® and Zovolex. With new technology comes new costs. The newer products range from $5 to $6 (AWP) per dose compared to the older diclofenac formulations that are less than $1 (AWP) per dose (strength dependent). All diclofenac products are designated as ‘N’ drugs by the Official Disability Guidelines due to diclofenac’s increased risk profile compared to other NSAIDs.23 Healthcare Solutions’ P&T Committee currently recommends non-formulary status be given to Duexis®, Vimovo®, Zipsor® and Zorvolex®.
Vimovo® and Duexis® are associated with significant costs; however, Healthcare Solutions’ targeted interventions are keeping utilization low.
Top Anti-Inflammatories by Prescription Count Drug Name 2014 Change Ibuprofen 27.6 % 0.4 % Celebrex® 16.7 % -2.4 % Naproxen 17.3 % 0.7 % Meloxicam 17.2 % 0.9 % Diclofenac Sodium 4.7 % 0% Nabumetone 3.4 % 0% Etodolac 2.9 % -0.4 % Naproxen Sodium 2.6 % 0.2 % Duexis® 1.0 % 0.2 % All Others 6.8 % 0.5 %
Healthcare Solutions’ step therapy programs and the generic introduction were key to driving down Celebrex’s utilization.
Opioids and NSAIDs represent the most common drug classes in the treatment of work-related injuries and within Healthcare Solutions’ book of business. There is a considerable amount of medical literature concerning the appropriate use of these drug classes. Healthcare Solutions offers medication review services to handle complex cases involving the opioid and NSAIDs therapeutic drug classes. S
Top Anti-Inflammatories by Spend Drug Name 2014 Change Celebrex® 43.3 % -4.7 % Meloxicam 15.5 % -2.2 % Ibuprofen 7.0 % 2.8 % Duexis® 6.9 % 3.1 % Naproxen 6.1 % -0.8 % Vimovo® 3.7 % 3.2 % Diclofenac Sodium 2.5 % -0.4 % Naprelan® 2.3 % -0.5 % Nabumetone 1.8 % -0.4 % Zipsor® 1.5 % 0%
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Our last drug trends report went into detail surrounding peer reviews. Two trends noticeable in the peer review arena include: 1. Clients are starting to use this tool earlier in the claim life. This is due to enhanced data analytics intelligence and clinical liaisons working closely with case managers and claims examiners. 2. Average MEDs were reduced another 2% for a total average of 42% reduction. This is due to clients requesting nurse case managers quarterbacking of post review outcomes to help ensure the agreed upon treatment plan is being followed. One of Healthcare Solutions’ main focus points in 2014 was to aid clients in managing urine drug screens. Legislatively, many jurisdictions are requiring drug screens as part of an overall opioid management strategy. Medical literature supports the use of urine drug screenings to help ensure appropriate opioid use; however, what the industry is experiencing is an increase in the number and costs of urine drug screens without a corresponding decrease in opioid use.24 Healthcare Solutions’ approach is to work with urine drug screen vendors to create a flat panel rate both prospectively and retrospectively. This enables physicians to complete needed tests without the escalation of costs that have been reported in the market. The program supports the use of a very valuable tool for physicians to leverage. Healthcare Solutions’ staff monitors drug screen reports and works with claims examiners to make recommendations for unanticipated, non-compliant findings. This collaborative approach is just one tool to drive therapeutic outcomes, claimant safety and support cost containment.
2015 Drug Trends Report | 24
SKELETAL MUSCLE RELAXANTS SKELETAL MUSCLE RELAXANTS In comparison to 2013, spend and prescription count were relatively consistent for skeletal muscle relaxants. This drug class is common in the treatment of workrelated injuries; however, product labeling and guidelines do not recommend the chronic use of most skeletal muscle relaxants. Available evidence has not yet shown benefit with long-term use of these medications, with the exception of baclofen and tizanidine. As a result, Healthcare Solutions targets the utilization of muscle relaxants and uses multiple interventions to promote appropriate use of these medications. For example, metaxalone (generic for Skelaxin®) is one of the most expensive medications in this drug class. In 2014 alone, the AWP for this medication increased 7%. Despite these pressures, Healthcare Solutions observed a decease of 1.9% in spend for metaxalone in 2014. I LIN CA
Physician Intervention Letters
Metaxalone’s decrease in spend, despite its rising cost, is attributed to Healthcare Solutions’ clinical programs and strong client support. In the case of skeletal muscle relaxants, physician intervention letters are sent to the prescriber to alert them when their claimants have utilized a muscle relaxant beyond the recommended time frame and suggests alternative management strategies going forward on the claim. Additional tools include the use of step therapy protocols to guide use of skeletal muscle relaxants to the most cost effective formulation possible. ER VIC
SKELETAL MUSCLE RELAXANT TRENDS 2014 Compared to 2013
CASE STUDY: Physician Intervention Letter CLAIMANT:
46 year old male
Low back and neck pain
Extended use of carisoprodol (Soma) from two prescribers
Physician intervention letter sent
Both prescribers ceased prescribing carisoprodol; resulting in a savings of 5% on the claim
25 | Healthcare Solutions
Product labeling and guidelines do not recommend the chronic use of most skeletal muscle relaxants.
SKELETAL MUSCLE RELAXANTS
Top Skeletal Muscle Relaxants by Prescription Count
Top Skeletal Muscle Relaxants by Spend
Drug Name Tizanidine HCL Metaxalone Cyclobenzaprine HCL Baclofen Amrix®
2014 20.5 % 17.9 % 16.6 % 12.8 % 10.7 %
Drug Name Cyclobenzaprine HCL Tizanidine HCL Carisoprodol Methocarbamol Baclofen
Change -1.6 % -1.4 % -1.9 % 7.7 % 1.1 %
2014 38.3 % 17.5 % 12.3 % 10.5 % 9.1 %
Change 0.9 % 0.6 % -3.2 % 0.6 % 0.7 %
As a mitigation strategy for the high cost cyclobenzaprine formulation, Amrix®, Healthcare Solutions offers a step therapy program suggesting the use of lower cost generic cyclobenzaprine formulations.
Comparative Prices of Available Products Containing Cyclobenzaprine as the Active Ingredient
Average Cost per Month (based upon AWP & standard doses)
Cyclobenzaprine 5mg (generic Flexeril®)
Cyclobenzaprine 10mg (generic Flexeril®)
Cyclobenzaprine ER 15mg (generic Amrix®)
Cyclobenzaprine ER 30mg (generic Amrix®)
Utilizing generic cyclobenzaprine could potentially result in annual savings of over $8,000.
2015 Drug Trends Report | 26
ANTICONVULSANTS ANTICONVULSANTS In comparison to 2013, spend and prescription count were relatively consistent. Anticonvulsant medications work to treat pain by ‘calming’ nerves that cause pain. Anticonvulsants do not work on all pain types, such as lower back pain. These drugs tend to work more effectively on the extremities.25
Successful step therapy and outreach programs decreased Lyrica® utilization by 2%.
Gabapentin and Lyrica® continue to represent the most common drugs in this drug class. Over the last year, there has been a 20% increase in the AWP of Lyrica®. Although Lyrica® only makes up 30% of transactions for anticonvulsants, it contributes to 49.4% of the spend for this drug class. On the other hand, gabapentin makes up greater than 50% of transactions for this drug class, but contributes to only 30% of the spend.
Gabapentin now makes up over
of all anticonvulsant prescriptions, yet only 30% of the costs due to the ever increasing cost of Lyrica®.
Lyrica® will not be generically available until 2018; therefore, this trend may continue. As a result, Healthcare S ER VIC Solutions recommends the use of step therapy protocols when coverage is provided for the anticonvulsant drug class. Our protocol requires claimants to try gabapentin first before authorizing Lyrica®; resulting in client savings. I LIN CA
AWP Inflation of Lyrica® 150 mg Qty 90 $600
$519 $474 $433
$396 $361 $300
In 2014, the price of Lyrica® increased by
$231 Sept 2009
27 | Healthcare Solutions
20%. Since 2009, the price of Lyrica®
has increased by
Top Anticonvulsants by Spend Drug Name 2014 Change Lyrica速 49.4 % 2.3 % Gabapentin 30.4 % -1.4 % Topiramate 6.1 % -0.4 % Neurontin速 2.0 % 0% Lamotrigine 1.9 % 0.1 %
ANTICONVULSANT TRENDS 2014 Compared to 2013
Top Anticonvulsants by Prescription Count Drug Name 2014 Change Gabapentin 50.2 % 2.8 % Lyrica速 30.1 % -2.0 % Clonazepam 6.3 % -0.9 % Topiramate 4.9 % 0.2 % Levetiracetam 1.4 % 0%
Rx Prescription Count
Percentage of Claimants Utilizing Lyrica速 2010 - 2014 Trends
7% 6% 5% 4%
3% 2% 1% 0%
2015 Drug Trends Report | 28
ANTIDEPRESSANTS ANTIDEPRESSANTS Despite what the name might suggest, antidepressants are not solely used to treat depression. Antidepressants are used to treat a variety of other conditions, including neuropathic pain or anxiety. The highlight in this class of drugs was the introduction of generic Cymbalta® at the end of 2013. The effect of this generic launch was fully realized in 2014. Cymbalta® and its generic, duloxetine, represent the most common drug within this class. Because of the generic release, spend per prescription decreased by 18% for this medication in 2014 compared to 2013. Also note that since Cymbalta® is now generic, all of the top utilized antidepressants are generic medications. Because antidepressants are historically a difficult drug class to manage, Healthcare Solutions offers clients the use of a clinical S ER VIC liaison. The clinical liaison works as part of a client’s team to produce positive outcomes. Clinical pharmacists leverage both predictive and demonstrated modeling through Healthcare Solutions’ Advanced Trigger Report to identify at-risk claims. Working with clients, Healthcare Solutions routes information either to the claims examiner or to assigned case management, depending on each unique model. Larger clients typically are staffed with clinical resources in which Healthcare Solutions adapts to their best practices by supplying information on the front-end to the clinicians; working through intervention modeling; creating unique point-of-sale edits for the claimant; and reporting on outcomes. This closed-loop model drives toward enhancing claimant safety and resulting in overall claim savings. I LIN CA
FDA Approval History for Cymbalta®26
Aug 4, 2004
FDA approves Cymbalta® for the treatment of depression
Sept 7, 2004
FDA approves Cymbalta® for neuropathic pain associated with diabetes
Feb 26, 2007
FDA approves Cymbalta® for treatment of generalized anxiety disorder
Spend per prescription for Cymbalta® decreased by
Nov 30, 2007 FDA approves Cymbalta® for maintenance treatment of depressive disorder Jun 16, 2008
FDA approves Cymbalta® for the management of fibromyalgia
Nov 30, 2009 FDA approves Cymbalta® for maintenance treatment of generalized anxiety disorder Nov 5, 2010
FDA clears Cymbalta® to treat chronic musculoskeletal pain
While Cymbalta® (duloxetine) can be expensive, it provides an alternative to chronic opioid therapy as an effective way to treat musculoskeletal pain and some types of neuropathic pain. 29 | Healthcare Solutions
ANTIDEPRESSANT TRENDS 2014 Compared to 2013
Top Antidepressants by Spend Drug Name 2014 Duloxetine HCL 47.8 % Cymbalta速 8.8 % Venlafaxine 5.6 % Bupropion HCL 5.3 % Escitalopram Oxalate 5.0 % Sertraline HCL 3.4 % Pristiq速 3.2 % Fluoxetine HCL 2.9 % Amitriptyline HCL 2.0 % Wellbutrin XL速 1.8 %
Change 46.4 % -52.7 % 0.6 % 0.2 % 0.3 % 0% 0.8 % 0.2 % 0.6 % 1.0 %
Top Antidepressants by Prescription Count Drug Name 2014 Change Duloxetine HCL 28.9 % 27.9 % Amitriptyline HCL 13.8 % -0.4 % Trazodone HCL 9.7 % 0.5 % Bupropion HCL 6.3 % -0.3 % Escitalopram Oxalate 5.5 % -0.2 % Sertraline HCL 5.3 % -0.1 % Venlafaxine HCL 5.0 % 0.1 % Nortriptyline HCL 4.5 % 0.2 % Fluoxetine HCL 3.4 % -0.1 % Citalopram Hydrobromide 3.3 % 0.1 %
2015 Drug Trends Report | 30
Healthcare Solutions participated in public hearings, teleconferences and
meetings to help address concerns with proposed legislation/regulation to help ensure the best possible solutions were adopted for clients and injured workers.
LEGISLATIVE AND REGULATORY HIGHLIGHTS 2014 LEGISLATIVE AND REGULATORY HIGHLIGHTS Healthcare Solutions’ governmental affairs program was very active in 2014. The workers’ compensation legislative and regulatory sessions were active from the beginning to the end of the year. The current pace in early 2015 is matching or exceeding that of the 2014 session. Healthcare Solutions participated in public hearings, teleconferences and meetings to help address concerns with proposed legislation/regulations and to ensure the best possible solutions were adopted for clients and injured workers. Our governmental affairs department monitors daily activity, and conducts outreach to legislative, regulatory and other stakeholders. Healthcare Solutions’ program is recognized nationwide by many regulators who are proactively seeking input and advice from our experienced governmental affairs team. Some of the same efforts that were made in 2013, spilled over and picked up steam in 2014.
Healthcare Solutions is committed to keeping clients informed on proposed and enacted regulations that may impact their business. We notify clients of important regulatory updates when they occur through our Regulatory eAlerts as well as publish a quarterly regulatory and compliance newsletter, The Examiner.
Number of Bills Proposed/Passed in 2014 - 2015 by Category
Direction of Care
Prescription Drug Monitoring Program
2015 Drug Trends Report | 32
LEGISLATIVE AND REGULATORY HIGHLIGHTS 2014 YEAR-IN-REVIEW Legislation: Delaware HB 373: This Act makes substantial changes to Titles 18 and 19 of the Delaware Code designed to control the level of workers’ compensation premiums in Delaware. The most significant changes are: •
A 33% reduction in medical costs to the workers’ compensation system, phased in over a period of three years;
Absolute caps, expressed as a percentage of Medicare per procedure reimbursements, on all workers’ compensation medical procedures beginning on January 31, 2017; and
Increased independence for the ratepayer advocate who represents ratepayers during the workers’ compensation rate approval process and for the committee that oversees the cost control practices of individual workers’ compensation insurance carriers.
North Carolina SB 744: Creates a pharmacy fee schedule at 95% of AWP. Repackaged drugs go back to original NDC. If repackaged drug and original NDC are not on the bill, reimbursement is 100% of AWP of the least expensive clinically equivalent drug. No provider, outside of a licensed pharmacy, can receive reimbursement for Schedule II or Schedule III in excess of a 5 day supply commencing upon the employee’s initial treatment following injury.
33 | Healthcare Solutions
Pennsylvania HB 1846: Limits physician dispensed drug reimbursement to 110% of AWP based on the original manufacturer NDC. Disallows use of repackaged NDCs; if the original manufacturer NDC is not included on the bill, reimbursement shall be based on the AWP of the least expensive clinically equivalent drug. No outpatient provider, other than a licensed pharmacy, may seek reimbursement for drugs listed as Schedule II in excess of an initial 7 day supply, commencing upon the employee’s initial treatment. An additional 15 day supply can be dispensed commencing on the date of the medical procedure. No outpatient provider, other than a licensed pharmacy, may seek reimbursement for drugs listed as Schedule III and containing hydrocodone in excess of an initial 7 day supply, commencing upon the employee’s initial treatment. An additional 15 day supply can be dispensed commencing on the date of the medical procedure. No outpatient provider, other than a licensed pharmacy, may seek reimbursement for any other drugs in excess of an initial 30 day supply, commencing upon the employee’s initial treatment; if one healthcare provider has dispensed drugs under any of these provisions, no other healthcare provider may submit for reimbursement for drugs dispensed to an injured worker under the same claim. No outpatient provider, other than a licensed pharmacy, may seek reimbursement for an over-the-counter drug. Requires the workers’ compensation advisory council to conduct an annual study of the impact of this legislation, including calculations of savings.
LEGISLATIVE AND REGULATORY HIGHLIGHTS
Regulations: Oklahoma: Medical Services - Emergency Adoption The Workers’ Compensation Commission (WCC) adopted emergency rules to implement the closed formulary required under SB 1062. For all dates of injury on or after 02/01/2014, the closed formulary applies with no legacy claimants or transition period. Claimants with a date of injury prior to 02/01/2014 will not be subject to the closed formulary. The closed formulary includes FDA approved drugs, EXCLUDING the following: •
‘N’ drugs per the ODG Appendix A;
Investigational or experimental drugs for which there is early developing scientific or clinical evidence demonstrating potential efficacy, but which is not yet broadly accepted as prevailing standard of care; and
Drugs not in ODG (drugs that are not preferred, exceed or are not addressed by the ODG in effect on the date of treatment).
Drugs not in the closed formulary require prior authorization and payment may be denied if prior authorization is not requested. Prior authorization requests must include the prescriber’s “drug regime plan of care” and anticipated dosage or range of dosages. If a request for prior authorization is not responded to within 72 hours, it is deemed approved. Explanations of Benefits (EOBs) must be sent to the pharmacy, prescribing doctor and injured worker at the time an insurance carrier denies payment for medications for any reason related to medical necessity or reasonableness of health care.
2015 Drug Trends Report | 34
LEGISLATIVE AND REGULATORY HIGHLIGHTS
Regulations: Michigan: Opioids and Compounds Adopts by reference, 2014 Medicare HCPCS procedure codes, RBRVS codes, AMA physicians CPT codes and both ICD-9 and ICD-10 requirements. Adds Medi-Span as a nationally recognized compendium for AWP pricing. Requires both original and repackaged NDCs on CMS 1500 form for physician dispensed bills in the order/ format recommended by NUCC. Physicians prescribing opioids past 90 days must submit a written report to the payer for reimbursement. Reimbursement for prescribing and dispensing opioid medications may be denied for failing to submit a report, but only after a period of time for the injured worker to be weaned off the opioid and alternative treatments to be offered. Providers can bill for the report under CPT 99215 and charge $25.00 under MPS01 for accessing a PDMP database. Compounds shall be billed using each individual ingredient and the original manufacturerâ€™s NDC. Compound reimbursement is capped at: AWP 10%, Medi-Span or Redbook and a compounding fee of $12.50 using WC 700-C. Compounds are capped at a $600 maximum; if the bill exceeds this amount, it must include the manufacturerâ€™s invoice for review. Reimbursement should only be considered after the compound meets all of the following: 1. There is no readily available commercially manufactured equivalent product; 2. No other FDA approved alternative drug is appropriate for the claimant; 3. The active ingredients of the compound each have an NDC number and are components of drugs approved by the FDA; 4. The drug has not been withdrawn or removed from the market for safety reasons; and 5. The prescriber is able to demonstrate to the payer that the compound medication is clinically appropriate for the intended use.
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LEGISLATIVE AND REGULATORY HIGHLIGHTS
Regulations: New York: Non-Acute Pain Treatment Guidelines New York adopted non-acute pain treatment guidelines. Treatment not in accordance with the guidelines requires a variance as set forth in 12 NYCRR §324.3. All diagnostic imaging, testing procedures, nonsurgical and surgical therapeutic procedures within the criteria of the Medical Treatment Guidelines (MTG) are considered authorized, with the exception of the following procedures: • • • • • • • • •
Lumbar fusion Artificial disc replacements Vertebroplasty Kyphoplasty Electrical bone growth and spinal stimulators Pain pumps Osteochondral autography Autologous chondrocyte implantation Total or partial knee joint replacements
Subsequent procedures also require prior authorizations. Physicians should make sure that nonopioid pain management approaches, including nonpharmacological and non-opioid measures have failed prior to considering long-term opioid use; long-term opioid management guidelines for initial, transitioning and on-going treatment are outlined. Guidelines for optimizing opioid treatment include, but are not limited to: • • • • •
Monitoring on-going treatment Pain agreements Random urine drug testing (UDT) Optimizing drug doses Weaning/tapering from opioids
UDT results cannot be shared with the employer, insurance carrier or the workers’ compensation board, and compound medications: topical, oral and/or systemic are not recommended.
2015 Drug Trends Report | 36
LEGISLATIVE AND REGULATORY HIGHLIGHTS COMPOUNDS Compound medications have taken a front seat for many payers due to their high cost and lack of proven efficacy. Although compounds are a small percentage of overall dispensed medications, they are becoming a higher percentage of overall medication spend due to an increase in the number of ingredients and overall costs. Unlike controls for physician dispensing, which included limiting or banning physician dispensing and tying reimbursement for a repackaged drug back to the original National Drug Code (NDC), most state workersâ€™ compensation programs have not come up with an effective way to manage compound drug utilization and/or costs. Oklahoma has taken a somewhat aggressive stand in requiring all compound drugs to require prior authorization through the use of a drug formulary and treatment guidelines. Figure 16 provides examples of controls in place in a few states.
Compound Legislation Status by State
Effective Controls Some Controls Limited/No Controls 37 | Healthcare Solutions
LEGISLATIVE AND REGULATORY HIGHLIGHTS Figure 16
Examples of states with effective compound controls versus those with some or limited to no controls.
Effective Compound Controls Alaska
Compounds are not reimbursable in workers’ compensation
All compounds require prior authorization Reimbursement is at the ingredient level and AWP x 90% + $5.00 dispensing fee
Compounds itemized out by ingredient and paid at MS Fee Schedule plus a single dispensing fee = $5.00 per compound If the NDC for any ingredient is a repackaged drug, reimbursement for the repackaged ingredient(s) shall be as above provided Reimbursement for a compound cream medication is limited to maximum total reimbursement of three hundred dollars ($300) for one hundred twenty (120) grams per month Any additional quantity over and above this one hundred twenty (120) gram limit requires further documentation and prior authorization (pre-certification)
Some Compound Controls
Compounds are reimbursed using proprietary codes: • Category I Z0790 Fee $75 per 30 day supply = Any anti-inflammatory medication or any local anesthetic single agent • Category II Z0791 Fee $150 per 30 day supply = Any anti-inflammatory agent or agents in combination with any local anesthetic agent or agents • Category III Z0792 Fee $250 per 30 day supply = Any single agent other than anti-inflammatory agent or local anesthetic, either alone or in combination with anti-inflammatory or local anesthetic agents • Category IV Z0793 Fee $350 per 30 day supply = Two or more agents that are not anti-inflammatory or local anesthetic agents, either alone or in combination with other anti-inflammatory or local anesthetic agents • All ingredient materials must be listed by quantity used per prescription. Category fees include materials, shipping and handling and time. Regardless of how many ingredients or what type, compounded drugs cannot be reimbursed higher than the Category IV fee.
• • •
Reimbursement at AWP - 50% plus compound fee $20 Compounds itemized out at ingredient level; repack language for ingredients back to original manufacturer Non-sterile compounds reimbursement only considered with 1-3 FDA approved active ingredients Limited/No Controls
No compound medication workers’ compensation fee schedule
No compound medication workers’ compensation fee schedule
2015 Drug Trends Report | 38
LEGISLATIVE AND REGULATORY HIGHLIGHTS PHARMACY DRUG FORMULARIES Texas was one of the first states, after Ohio and Washington, to adopt a drug formulary and publish data of its effectiveness on costs and utilization. Oklahoma, through emergency regulations, adopted a drug formulary similar to Texas and is in the process of adopting permanent rules. One reason these drug formularies are effective is that the states that have formularies have also adopted medical treatment guidelines. Having either one of these cost containing tools without the other essentially makes them less effective in controlling drug costs by changing prescribing patterns. In late 2014, and now in early 2015, formularies have become a hot topic in several jurisdictions. We are aware, as of date, that Louisiana, Tennessee, Maine, Michigan, Arkansas, Montana and California have either introduced legislation, proposed regulations or are in discussions to add a drug formulary to their workersâ€™ compensation strategies.
As of the date of this publication, Louisiana, Tennessee, Maine, Michigan, Arkansas, Montana and California have either introduced legislation, proposed regulations or are in discussions to add a drug formulary to their jurisdiction.
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LEGISLATIVE AND REGULATORY HIGHLIGHTS Examples of Drug Formulary Legislation and Regulations Arkansas – Treatment Guidelines and Drug Formulary (proposed legislation) - The scope and duration of medical treatment under workers’ compensation shall be provided in accordance with the current edition of Official Disability Guidelines (ODG), as published by the Work Loss Data Institute. The employer or insurance carrier shall not be responsible for charges for medical treatment that is not provided in accordance with ODG unless: (1) it was provided in a medical emergency, (2) it was preauthorized by the employer or insurance carrier, or (3) it was approved by the Workers’ Compensation Commission upon a finding based on clear and convincing evidence provided by or at the direction of the treating physician. Medications with the status of ‘N’ in the ODG Drug Formulary require prior authorization.
Montana – D747/S292 – Authorizes a drug formulary applying to injured workers; establishes rules for payment and reimbursement of compound drugs; allows the department to establish a maximum morphine equivalent for Schedule II and III narcotics within the formulary; provides that the insurer is not liable for brand name drugs if the generic equivalent is available; creates a process for an independent medical review for prescription drugs denied by the insurer; and provides rule-making authority to the Department of Labor and Industry.
California – AB 1124 – This bill would require the administrative director to establish a formulary for the purposes of prescribing prescription medications.
2015 Drug Trends Report | 40
LEGISLATIVE AND REGULATORY HIGHLIGHTS Formulary Management: A Review of Oklahoma and Texas
OKLAHOMA Figure 18
Formulary Exception Processing
Closed Formulary Excludes:
Closed Formulary Excludes: • • • •
ODG Appendix A ‘N’ Drugs All compounds Any investigational or experimental drug Drugs not preferred, exceed or are not addressed by ODG
• • •
ODG Appendix A ‘N’ Drugs Compounds that contain ‘N’ drug ingredients Any investigational or experimental drug
Prior Authorization Prior authorization required for drugs excluded from the closed formulary which must go through a certified Utilization Review Agent.
Prior authorization required for drugs excluded from the closed formulary which can be obtained from the employer or carrier. Must include the doctor’s drug regimen plan of care.
Drugs included in closed formulary and dispensed do not require prior authorization and are not subject to retrospective review.
Initial Pharmacy Care
Drugs excluded from the closed formulary do not require prior authorization but are subject to retrospective review.
Initial Pharmacy Care
Treatment Guidelines Treatment Guidelines •
Drugs included in the closed formulary do not require prior authorization.
Drugs that exceed, not addressed or not preferred DO require prior authorization.
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Drugs included in the closed formulary and recommended by the treatment guidelines do not require prior authorization.
Drugs included in the closed formulary that exceed or are not addressed in the treatment guidelines do not require prior authorization.
LEGISLATIVE AND REGULATORY HIGHLIGHTS Figure 19
2014 Results by Category for Texas and Oklahoma Pre-Implementation Claims - claims within the year prior to regulation enactment
‘N’ Drug Prescriptions vs. Spend
Post-Implementation Claims - claims within the year after regulation enactment
Opioid Prescriptions vs. Spend
‘N’ Drug Prescriptions
‘N’ Drug Spend
Average MED* - Oklahoma
* MED - Morphine Equivalent Dose
So are the outcomes similar between Oklahoma and Texas when it comes to the ODG formulary? That is open to interpretation. Those following the issue are familiar with the success Texas had with management of nonformulary drugs – those defined as a ‘N’ status by the Official Disability Guidelines. Oklahoma has not yet experienced the overall success that Texas has when comparing legacy and new transaction activities; however, Oklahoma did experience positive results:
Average MED* - Texas
• • • •
Data is based on Healthcare Solutions’ clients in these states.
Point of interest in the comparison between Texas and Oklahoma is that a formulary is only a vehicle to manage drug utilization. How that formulary is supported through regulation drives how successful it may be. Oklahoma demonstrates that even with looser rules around management, there are still positive impacts supporting reduced spend and enhanced claimant safety. Expect more states to implement formulary controls in 2015.
Decrease in the number of ‘N’ drug prescriptions Lower ‘N’ drug spend Decrease in opioid prescription count No change in opioid spend 2015 Drug Trends Report | 42
IN CONCLUSION IN CONCLUSION Trends of higher inflationary rates for generic medications will persist. Compound medication utilization and cost will also continue to rise. In 2014, hydrocodone with acetaminophen combination products (HCPs) decreased by 20% due to the scheduling change. We continue to see an overall decrease in opioid utilization. In relation to cost management, HCP price increases were offset by the gains in decreased utilization. The introduction of higher cost specialty medications will need to be monitored closely, as with the Hepatitis C medications coming into the arena in 2014. While all of those trends sound like they come with a hefty price tag for the payers, Healthcare Solutions promises to continue to develop innovative clinical programs to help lower clients’ medical spend. In 2014, those programs helped to offset inflationary factors by more than 50% overall. We are committed to enhancing clinical programs, providing new network management tools and solutions to the growing compounded medication problem. Your PBM is a partner in your business and we take that very seriously at Healthcare Solutions. Your problems become our problems. Our solutions become your solutions.
ABOUT HEALTHCARE SOLUTIONS Healthcare Solutions, Inc. is the parent company of Cypress Care, Procura Management, ScripNet and Modern Medical. Through its subsidiary companies, Healthcare Solutions delivers integrated medical cost management solutions to over 750 customers in workers’ compensation and auto/personal injury protection markets. The company’s clinicaland technology-based services include pharmacy benefit management, specialty healthcare services, PPO networks, medical bill review, case management and Medicare Set-Aside services.
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Average Average Wholesale Price (AAWP):
Average Wholesale Price (AWP):
Aggregate pricing of AWPs either within a class or type of medication. Medication reference price suggested by drug manufacturers and wholesalers. Published by First DataBank, Medi-Span, Red Book and Elsevier Gold Standard.
Drugs produced in licensed pharmacies by the mixing of drugs pursuant to a physicianâ€™s order. NDC numbers and published pricing may be associated with the active ingredients, but not typically with the final compounded product.
The number of days a prescription is expected to provide therapy based on the quantity prescribed and dosing schedule.
The observed mix in utilization of brand and generic medications both within and across therapeutic classes.
Generic Dispensing Rate (GDR):
The percentage of prescriptions dispensed with a generic.
Generic Substitution Rate (GSR):
The percentage for all medications dispensed as generic; measures how often a generic is dispensed when a generic version of a prescribed drug exists.
The amount billed per days supply or per prescription. Drugs which are repackaged from larger package sizes into smaller units for sales and distribution. Once repackaged, they are assigned new NDC numbers and are often used for physician dispensing. The amount billed per injured worker. The days supply dispensed per injured worker or the number of prescriptions per injured worker.
2015 Drug Trends Report | 44
U.S. Food and Drug Administration. (2010). About FDA: Generic competition and drug prices. Retrieved from http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/ucm129385.htm
U.S. Food and Drug Administration. (2012). Facts about generic drugs. Retrieved from http://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/UnderstandingGenericDrugs/ucm167991.htm
U.S. Food and Drug Administration. (2015). Medwatch: The FDA safety information and adverse event reporting program. Retrieved from http://www.fda.gov/Safety/MedWatch/
Healthcare Solutions. (2014). DAW study. Data on file.
Mullard, A. (2014). FDA drug approvals. Nature Reviews Drug Discovery. 14:77-81.
Gavlin, R., & Longman, R. (2014). We need more transparency on the cost of specialty drugs. Harvard Business Review. Retrieved from https:// hbr.org/2014/11/we-need-more-transparency-on-the-cost-of-specialty-drugs
Midwest Business Group on Health. (n.d.). No single definition for specialty drugs. Retrieved from http://www.specialtyrxtoolkit.com/specialty-pharmacy-101/no-single-definition-specialty-drugs
Centers for Disease Control and Prevention. (2015). Hepatitis c FAQ for the public. Retrieved from http://www.cdc.gov/hepatitis/C/cFAQ.htm
Jagger, J., Puro, V., & Carli, G. (2002). Occupational transmission of hepatitis c virus. The Journal of the American Medical Association. 288(12):1469-1471. Available by subscription at http://jama.jamanetwork.com/article.aspx?articleid=1032056
10. Ward, J. (2014). Hepatitis c: 25 years from discovery to cure. Retrieved from http://www.medscape.com/features/slideshow/hepatitis-c. Registration and login required. 11. Pfizer Inc. (2015). Pfizer and Lilly preparing to resume phase 3 chronic pain program for tanezumab. [Press Release]. Retrieved from http:// www.pfizer.com/news/press-release/press-release-detail/pfizer_and_lilly_preparing_to_resume_phase_3_chronic_pain_program_for_tanezumab 12. OptumRX. (2015). Biologics bigger more complex. Retrieved from https://www.optum.com/content/dam/optum/resources/articles/ orx8219_150120_biologicdrugsinfographic2.pdf 13. U.S. Food and Drug Administration. (2014). Compounding and the FDA: Questions and answers. Retrieved from http://www.fda.gov/Drugs/ GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm339764.htm 14. CA Labor Code 4600.2 15. Liberman, J.N., & Roebuck, C. (2010). Prescription drug costs and the generic dispensing ratio. J Manag Care Pharm. 16(7):502-06. 16. Vuilleumier, P., Stamer, U., & Landau, R. (2012). Pharmacogenomic considerations in opioid analgesic. Pharmacogenomic Pers Med. 5:73-87. 17. Tantisira, K., & Weiss, S. T. (2014). Overview of pharmacogenomics. Available by subscription at http://www.uptodate.com/contents/overview-of-pharmacogenomics 18. Gaedigk, A. (2013). Complexities of CYP2D6 gene analysis and interpretation. Int Rev Psychiatry. 25(5):534-553. 19. PharmGKB. (n.d.). CPIC: Clinical pharmacogenetics implementation consortium. Retrieved from http://www.pharmgkb.org/page/cpic 20. Arlotta, C. (2015). Opioid misuse in chronic pain patients is around 25%, new study shows. Retrieved from http://www.forbes.com/sites/cjarlotta/2015/04/01/opioid-misuse-in-chronic-pain-patients-is-around-25-new-study-shows/ 21. Martin, B., Fan, M., Edlund, M., DeVries, A., Brennan Braden, J., & Sullivan, M. (2011). Long-term chronic opioid therapy discontinuation rates from the TROUP study. Journal of General Internal Medicine. 26(12):1450-1457. 22. Pizzo, P. A., & Clark, N. M. (2012). Alleviating suffering 101 - pain relief in the United States. The New England Journal of Medicine. 197-199. Available by subscription at http://www.nejm.org/doi/full/10.1056/NEJMp1109084 23. Work Loss Data Institute. (2015). Official disability treatment guidelines (ODG) (web version). Retrieved from http://www.odg-twc.com/ odgtwclist.htm 24. WCRI-CA 25. WebMD. (2014). Anticonvulsants for chronic pain. Retrieved from http://www.webmd.com/sleep-disorders/anticonvulsants-for-chronic-pain 26. Drugs.com. (n.d.). Cymbalta approval history. Retrieved from www.drugs.com/history/cymbalta.html
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