Topical Medication Kits Driving Up California WC Prescription Drug Costs
A recent analysis of national workers’ compensation pharmaceutical data [Part 4, Mitchell Pharmacy Solutions Drug Trends Report (enlyte.com)] notes a sharp increase in the use of topical medications as opioid use has decreased, with the latest results showing that topicals increased for the third year in a row in 2021, climbing 4.7% from the 2020 level, and that nearly 1 out of 7 injured workers (15.2%) received topicals last year. The analysis further notes that topicals accounted for 5.7% of all workers’ comp prescriptions in the 2021, but because of the extremely high cost of many of these drugs, they accounted for 12.3% of the total drug spend.
These results follow CWCI research and available data from CWCI’s Prescription Drug Application, which features California workers’ comp prescription data through December 2021. In terms of prescription volume, the CWCI app shows that NSAIDs, often used as non-opioid alternatives to treat pain, overtook opioids as the top therapeutic drug category in 2016, and have remained so ever since. In 2017, however, dermatologicals surpassed NSAIDs, opioids and every other drug category in terms of total payments, accounting for 18.4% of the prescription dollars paid that year. Since then, the shift in the distribution of prescription dollars has continued, with the latest data showing that in 2021, anti-inflammatories (25%), dermatologicals (17.2%), anticonvulsants (8.6%), and ulcer drugs (6.3%) all ranked ahead of opioids (5.8%) in terms of their share of the total drug spend. Much of the growth in the dermatological drug spend over the past 15 years reflects increased utilization, as dermatologicals’ share of California workers’ comp prescriptions more than tripled from 2.7% in 2007 to 8.8% in 2021. At the same time, the mix of dermatologicals also changed with the emergence of high-priced topical analgesics also fueling the increase in dermatological payments.
One relatively new, low-volume, but extremely high-priced topical identified by CWCI research highlights the dermatological cost driver, Xyrilix, used to treat arthritis of the knee. Xyrilix is dispensed as a kit containing a diclofenac sodium solution and adhesive sheets and it is currently not FDA approved. A review of IRIS prescription drug data suggests that Xyrilix is primarily dispensed by a handful of small pharmacies. Because it is not in the national Medicaid database and has no Federal Upper Limit to control the price, Xyrilix is reimbursed at 85% of the Average Wholesale Price, which is based on manufacturer pricing. In 2021, the average amount paid for Xyrilix was $4,126 per prescription (close to what was paid in each of the prior 3 years as it began to appear on the scene), so even though it only represented 0.3% of the workers’ comp dermatological scripts last year, it consumed 6.8% of the dermatological dollars.
The Mitchell report describes kits such as Xyrilix as “a fixed combination of co-packaged drugs and non-drug items combined into one saleable unit.” In California workers’ compensation, these types of kits appear to be replacing compounded drugs, which were effectively addressed by the MTUS Drug Formulary. Other examples of kits containing topicals can be found in CWCI’s Pharmaceutical App, including Diclovix, which is a diclofenac sodium solution and a camphor-lidocaine-methyl salicylate patch (average 2021 payment, $1,634); and Prilovix Ultralite Plus, which consists of a tube of lidocaine-prilocaine cream, an occlusive dressing and some scissors (average 2021 payment, $3,845).
Given the high cost associated with these kits, and the historical abuses involving prescription drugs in California workers’ compensation, claims administrators and their PBMs should keep an eye out for drugs that are being dispensed in the form of a kit, just as they used to watch for compounds.
BY/