Report on California’s Formulary Shows Pharmaceutical Costs Declining

The Workers’ Compensation Insurance Rating Bureau of California has updated the cost impact evaluation of the Medical Treatment Utilization Schedule Drug Formulary, utilizing additional pharmaceutical transaction information in 2019 through the pre-pandemic period in 2020.

The findings are detailed in the WCIRB’s Cost Impact of California’s Drug Formulary – Two-Year Checkup research brief.

California’s drug formulary, which went into effect Jan. 1, 2018, is intended to reduce frictional costs in the workers’ comp system; restrict inappropriate prescribing, especially that related to opioids; and ensure that injured workers receive medically necessary medications in a timely manner.

Key findings include:

• While pharmaceutical costs had been declining sharply prior to implementation of the formulary, the decline accelerated in 2018 and continued at a somewhat slower rate through 2019 and the pre-COVID-19 period in 2020.
• The share of prescriptions for drugs not subject to prospective utilization review in accordance with the formulary continued to increase in 2019 and early 2020, while that of drugs subject to UR continued to decline.
• The share of pharmaceutical payments for opioids, compounds and brand-name drugs with generic alternatives dropped sharply in 2018 and continued to drop at a similar rate in 2019 and early 2020.

Related:

• California Workers’ Comp Written Premium Down 12% over 9 Months of 2020
• California OKs Workers’ Comp Advisory Rates, No Virus Adjustment for Now
• California Closes Record for 2021 Pure Premium Workers’ Comp Filing

Topics California Trends