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1 2016 Drug Trends Series – Traditional View First Script

2016 Drug Trends ReportThe compilation of our annual workers’ compensation drug trends 4-part series

Published September 2017

Introduction

Table of Contents

The 2016 Drug Trends Series is based on all calendar-year transactions billed through Coventry’s Pharmacy Benefit Management (PBM) program, First Script, as well as transactions from medical bill review to reflect the total pharmacy experience for our client base.

This year we presented our data for traditional, managed, and unmanaged views; however, we shared the information in shorter, more condensed pieces delivered every few weeks vs. one large manuscript.

This compilation takes those four editions and combines them into one manuscript for those interested in having one document that addresses all four topics.

Part 1: Evaluating the traditional retail and mail-order prescription view ................................................................................1 Traditional View — Key Trends .......................................................................................................................................2 Average Wholesale Price (AWP) Trends .........................................................................................................................3 Morphine Equivalent Dose (MED) ..................................................................................................................................4 Brand and Generic Trends ..............................................................................................................................................5 Highlights ........................................................................................................................................................................6Part 2: Addressing the managed vs. unmanaged prescription view ........................................................................................7 Aggregate Pharmacy Trends by Network Type ...............................................................................................................8 Brand and Generic Trends ..............................................................................................................................................9 Generic Efficiency..........................................................................................................................................................10 Top Therapeutic Classes by Utilization .........................................................................................................................11 Top Therapeutic Classes by Cost ...................................................................................................................................12 Utilization by Claim Age ................................................................................................................................................13 Highlights ......................................................................................................................................................................14Part 3: Assessing opioids and compounds ...............................................................................................................................15 Aggregate View ............................................................................................................................................................16 Aggregate Key Trends....................................................................................................................................................16 Aggregate View — High-Impact Drug Classes ..............................................................................................................17 Opioid Trends ................................................................................................................................................................18 Top Opioid Trends, Managed ........................................................................................................................................18 Top Opioid Trends, Unmanaged ...................................................................................................................................19 Opioid Utilization by Claim Age ...................................................................................................................................20 Opioid Cost by Claim Age .............................................................................................................................................21 Compound Trends — Aggregate View ..........................................................................................................................22 Compound Utilization in Top States Ranked by Total Drug Cost ..................................................................................23 Compound Cost in Top States Ranked by Total Drug Cost ...........................................................................................24 Highlights ......................................................................................................................................................................25Part 4: Examining specialty medications and closed formularies ............................................................................................26 Specialty Medications ...................................................................................................................................................27 Specialty Drug Trends in 2016 ......................................................................................................................................27 Specialty Medication Trends .........................................................................................................................................28 Closed Formulary Update .............................................................................................................................................29 Highlights ......................................................................................................................................................................30Conclusion & Recommendations .............................................................................................................................................31


Part 1: Evaluating the traditional retail and mail-order prescription viewThis first piece in our series focuses on the traditional view and is intended to be a benchmark to traditional industry reports as well as First Script’s historical reporting.


Total Prescriptions Total Cost

Traditional View — Key Trends

Anticonvulsants* cost per claim rose

6.8% due to an

increased cost per script

Overall prescription cost per claim

decreased

5.8% between 2015

and 2016

8 of the top 10 therapeutic classes cost less in 2016

Compound costs fell following decreases in both cost per script (21%) and utilization (43%)

Cost and Utilization Trend Changes (2015 to 2016)

The Traditional View This view includes First Script retail and mail-order prescription data and accounts for 67.9% of the total pharmacy transactions and 70.1% of the paid amounts. This view is meant to be a benchmark to traditional industry reports as well as First Script’s historical reporting. Non-traditional channels can include physician dispensing, repackaging, third-party billers, compounding and specialty pharmacies.

67.9% 70.1%Traditional Traditional

Non-traditional Non-traditional


NSAIDs experienced a 21.4% increase in brand AWP • Driven primarily by increases in Duexis® (26.4%) and Vimovo® (23.8%), both medications that combine NSAIDs and anti-ulcer medication

Average Wholesale Price (AWP) Trends

Lyrica® increased 13.7% • The most utilized anticonvulsant brand medication

Short-acting opioids experienced a 20.7% increase in brand AWP • Driven primarily by increases in Percocet® (28.3%), Nucynta® (24.3% ), and Subsys® (24.2%)

2016 Brand/Generic AWP Increases

2016 Brand AWP Increases

Top Therapeutic Classes by Brand Costs

AWP trended up

5.9% overall in 2016

primarily due to a 13.4% increase

in brand AWP


Morphine Equivalent Dose (MED)

Percentage of Opioid Scripts with 100+ MED

Percentage of Opioid Scripts with 100+ MED by Age of Claim

Claims of every duration experienced a

drop in MED, with 7 of the 10 years declining

1% pt. or more

from 2015

Scripts with MED greater than 100

continued to decline – dropping

nearly triple the rate of the

2015 decrease

Average daily MED per script

improved, falling

5.6% from 2015

Key influencers to the year-over-year decline in MED

Early intervention & outreach programs

to prescribers & patients

Education initiatives for physicians, injured workers, & adjusters

Adoption of state-based closed formularies and

medical guidelines

Data-driven product development strategy

aimed at reducing opioid utilization

Better collaboration between First Script and

payors in addressing opioid issues

.6%

1.5%


Brand and Generic Trends

The generic efficiency rate*

remained steady at

96.9%

In 2016, the generic fill

rate rose1.2% points to

85.6%

Generic utilization increased slightly while generic spend remained constant

2016 Utilization

2016 Cost

2015: 84.4%

85.6%

Generic

2015: 51.0%

51.1%

Generic

2015: 12.7%

11.6%

Brand

2015: 39.7%

39.3%

Brand

2015: 2.9%

2.7%

Brandwith generic

available

2015: 9.2%

9.6%

Brandwith generic

available

*Generic efficiency is the total number of generic prescriptions divided by the total number of prescriptions where a generic drug was available.


Highlights

Compound drug costs per claim declined 55%

Overall prescription cost per claim decreased 5.8% between 2015 and 2016

The traditional view, including First Script retail and mail-order prescriptions only, represented 67.9% of the total pharmacy transactions and 70.1% of paid amounts

Average Wholesale Price (AWP) trended up 5.9% overall in 2016

Opioids continue to trend favorably with an 8.5% drop in utilization and a 9.9% decline in cost per claim

Average Morphine Equivalent Dose (MED) per script decreased 5.6%

7 2016 Drug Trends Series – Managed vs. Unmanaged View First Script

Part 2: Addressing the managed vs. unmanaged prescription view This second section of our report is focused on the managed and unmanaged views. The managed data takes the tradi-tional view (retail + mail order) and adds prescriptions from our extended network. The unmanaged data represents the out-of-network prescriptions that are received and processed through medical bill review.

The Managed View The managed view includes retail, mail order, and extended-network data that represent 74.3% of all prescriptions and 77.7% of the total paid amounts. This view provides a more accurate portrayal of managed pharmacy trends due to the additional prescription data that is captured through our extended network. This network is comprised of direct contracts with non-traditional pharmacy billing sources such as physician dispensers and clinics. The extended network accounts for 6.4% of all transactions and 7.7% of all paid amounts.

The Unmanaged View This view includes out-of-network prescription data captured through medical bill review equating to 25.7% of total pharmacy transactions and 22.3% of total allowed amounts. This view provides insightful information about the cost and utilization trends for prescriptions dispensed and billed out-of-network. This information is not typically included within traditional industry drug trend reports.


2016 Claims with More than One Fill2016 Average Claim Age (Years)

Population Differences

Aggregate Pharmacy Trends by Network Type

74.3% of Total Prescriptions in 2016• Traditional, 67.9%• Extended Networks, 6.4%

77.7% of Total Pharmacy Cost in 2016• Traditional, 70.1%• Extended Networks, 7.7%

25.7% of Total Prescriptions in 201622.3% of Total Pharmacy Cost in 2016

Managed = Retail + Mail Order + Extended Networks*

Unmanaged = Out-of-Network Prescriptions

5.3 62.6%

1.630.9%

The trend continues to show that those filling prescriptions via unmanaged sources tend to fill fewer prescriptions, which is likely attributed to the lower acuity level of their injuries.

The average claim age for managed prescriptions is more than three times the unmanaged and remained relatively constant from the 2015 results.

*The numbers reflected in this and other charts throughout this report may not add up to 100% due to rounding.


Brand and Generic Trends

Managed Managed

2016 Utilization 2016 Cost

Unmanaged Unmanaged

2015: 84.5%

85.7%

Generic

2015: 51.5%

51.7%

Generic

2015: 80.1%

81.8%

Generic

2015: 40.2%

45.2%

Generic

2015: 12.7%

11.6%

Brand

2015: 39.6%

39.0%

Brand

2015: 15.5%

14.6%

Brand

2015: 57.3%

52.3%

Brand

2015: 2.8%

2.7%

Brandwith generic

available

2015: 8.9%

9.2%

Brandwith generic

available

2015: 4.4%

3.6%

Brandwith generic

available

2015: 2.5%

2.6%

Brandwith generic

available

Utilization and cost of brand-name drugs declined across the board from 2015.

• The generic for Voltaren® Gel 1% (diclofenac), a topical NSAID, was a key contributor in generic utilization increase

• Cost trends were relatively flat in the managed prescription population

• Increased use of dermatological/topical medications helped drive generic drug costs up 5% pts. in the unmanaged population

• Generic NSAIDs are a first-line treatment for the less-severe injuries that are typical of the unmanaged population; generic NSAID adoption continues to drive decreases in brand utilization


Generic Efficiency

Generic efficiency remained strong for

the managed population at

97% with claims aged

16-20 years experiencing the greatest

improvement

Generic efficiency for

the unmanaged population

increased

1% pt. to 95.7%

Generic Efficiency by Claim Age – Unmanaged Prescriptions

Generic Efficiency by Claim Age – Managed Prescriptions

20152016

20152016

Generic Efficiency (GE)Actual number of prescriptions filled as generics

Total number that could be filled as generics


The top 10 classes represent

83.4% of managed

prescriptions

The top 10 classes represent

87.9% of unmanaged

prescriptions

Top Therapeutic Classes by Utilization

Top Therapeutic Classes by Utilization – Unmanaged Prescriptions

Top Therapeutic Classes by Utilization – Managed Prescriptions

20152016

20152016

Unlike the managed population, opioids are prescribed less often in the unmanaged environment, ranking 3rd. Additionally, their utilization declined 2.1% pts. to 13.5% while NSAIDs and non-opioid analgesics increased in 2016.

Opioids continue to be the most highly utilized class for managed prescriptions.


Top Therapeutic Classes by Cost

Compound costs declined

5.8% pts. to 26.1% though

they still ranked 1st for cost

Top Therapeutic Classes – Unmanaged Prescriptions

Top Therapeutic Classes – Managed Prescriptions

20152016

20152016

Anticonvulsants increased

1.8% pts. to 13.6% of all

costs – primarily due to Lyrica®

which ranked 9th

for utilization and 1st for cost

Opioids, although ranked 1st, continue to decline moving 1.4% pts. to 29.7%.

Compounds, ranked 8th in overall spend, declined 2.9% pts. to 2.5% of overall cost.

Dermatological/topical medications remained 2nd in cost and increased from 13.5% to 18.2%.


Utilization by Claim Age

Utilized more for claims 1 year or younger

Utilized more for claims 2 years or older

Utilized more for claims 1 year or younger

Utilized more for claims 2 years or more

Top Classes 2016 – Unmanaged Prescriptions

Top Classes 2016 – Managed Prescriptions

Claim Years 0-1Claim Years 2+

Claim Years 0-1Claim Years 2+

Short- Acting Opioids

Non-Opioid Analgesics

Anticonvulsants

Compounds

NSAIDs

NSAIDs

Antidepressants

Antiulcer

Muscle Relaxants

Muscle Relaxants

Sustained- Release Opioids

Anticonvulsants


Highlights

Compounds, while remaining among the top ten in drug costs, have declined in utilization across both population groups, accounting for 0.4% of managed scripts (0.6% in 2015), and 4.2% of unmanaged scripts (4.6% in 2015).

Generic utilization continues to trend positively, increasing by at least 1% pt. for both prescription populations (managed 85.7%, unmanaged 81.8%).

Contrasting claim demographics, such as claim age and injury type, drive differential market trends for the managed and unmanaged groups.

The usage of generics, when available, is consistently high for the managed population at 97%, and continues to improve for the unmanaged population (+1% pt. to 95.7%).

Opioid utilization continues to decrease in both groups, declining 1.1% pt. for managed (30.1%) and 2.1% pts. for unmanaged (13.5%).

Specific non-opioid drug classes, such as NSAIDs (nonsteroidal anti-inflammatory drugs) and anticonvulsants for the managed group, and NSAIDs, muscle relaxants, and non-opioid analgesics for the unmanaged group, continue to rise with the decline in opioid use.

15 2016 Drug Trends Series – Opioids and Compounds First Script

Part 3: Assessing opioids and compoundsThis third section of our series is dedicated to opioids and compound drugs. These two therapeutic classes are frequently discussed in workers’ comp as opioids are prescribed to treat pain associated with injuries and compounds have been growing in popularity with physician dispensers.

We will share aggregate opioid and compound information which includes all drugs; we also will break out the results for comparison into the managed and unmanaged views.


Cost and Utilization Trend Changes (2015 to 2016)

Aggregate View Data Includes Managed + Unmanaged Prescriptions

Aggregate Key Trends

The Aggregate View Represents:

100% of Total Pharmacy Cost

The charts in this section incorporate all pharmacy transactions that have been shared in the two prior editions of our series. Comparisons between the traditional and aggregate views follow.

Aggregate data indicated a greater decrease in opioid prescriptions and cost per claim, but a smaller decrease in compounds when compared with traditional data. There was a different injury mix for the unmanaged group.

OpioidsTop 10 ClassesAll Classes

Per-claim costs for all prescription drugs decreased 8.4% between 2015 and 2016.

Eight of the top 10 drug therapy classes experienced lower costs in 2016.

100% of Total Prescriptions

Compound usage per claim

Opioid usage per claim

Traditional: -8.5% Aggregate: -10.7%

Dermatological & topical medications

Traditional: +1.3%Aggregate: +5.1%

Traditional: -43% Aggregate: -24.8%


Aggregate View — High-Impact Drug Classes

Specialty Drugs Specialty Drugs

Compounds Compounds

2016 Aggregate by Volume

2016 Aggregate by Cost*

2015 Aggregate by Volume

2015 Aggregate by Cost

Opioid use continued to decline in 2016.

Compound cost fell 4.2% points, driven by decreases in both utilization per injured worker (24.8%) and cost per script (22.9%).

Opioids Opioids

All Other Classes All Other Classes

Specialty Drugs

Compounds

Opioids

All Other Classes

Specialty Drugs

Compounds

Opioids

All Other Classes

The 1.2% point drop in opioid volume (shown above) has translated into a nearly 1% point drop in opioid cost (as shown in the chart below).

*The numbers reflected in this and other charts throughout this report may not add up to 100% due to rounding.


Opioid Trends

Top Opioid Trends, Managed

There has been a slow yet continuous shift away from opioid medications to non-opioid therapies. In both the managed and unmanaged populations, opioid prescriptions are increasingly being replaced with non-steroidal anti-inflammatory drugs (NSAIDs), anticonvulsants, and muscle relaxants. To better understand the drivers behind this welcome trend, we have analyzed some of the differences in opioid utilization and cost across claim ages in both the managed and unmanaged populations.

2016 Trend 2015-2016

Medication %ofTotal %ofTotal Scripts Cost Opioid Scripts Opioid Cost per Claim per Claim

Hydrocodone/ 33.1% 9.9% -11.9% -22.1% acetaminophen

Oxycodone/ 15.2% 18.5% -7.5% -8.7% acetaminophen

Tramadol 14.3% 4.0% -4.4% -9.0%

Oxycodone 9.8% 6.9% -3.2% -12.2%

OxyContin® 5.9% 20.7% -10.6% -8.7%

All other opioids 21.7% 40.0% -11.8% -13.7%

All opioids -9.3% -12.5%

Top 5 Opioid Medications Ranked by Utilization – Managed Prescriptions

The top 5 most utilized opioids,

shown here, accounted for

78.3% of utilization and

60% of cost for all opioids

The number of injured workers

using opioids dropped from

57.3% to 54.2%

Nucynta® Nucynta® ER Only two opioids among the top 20 experienced increasing trends in cost per claim. Both Nucynta and Nucynta ER, schedule II controlled substances well suited for pain conditions requiring a strong opioid component, had price increases above 24%.

8.4%cost per

claim

31.4%cost per

claim


Top Opioid Trends, Unmanaged

2016 Trend 2015-2016

Medication %ofTotal %ofTotal Scripts Cost Opioid Scripts Opioid Cost per Claim per Claim

Hydrocodone/ 29.9% 10.4% -29.2% -34.9% acetaminophen

Tramadol 26.7% 11.7% -10.8% -7.7%

Oxycodone/ 9.9% 14.9% -19.0% -11.4% acetaminophen

Acetaminophen/ 8.2% 1.7% -9.9% -0.8% codeine

Tramadol/ 6.3% 1.7% -12.1% -42.2% acetaminophen

All other opioids 18.9% 59.7% -20.6% -20.0%

All opioids -19.7% -19.8%

Top 5 Opioid Medications Ranked by Utilization – Unmanaged Prescriptions

The number of injured workers

using opioids dropped from

24.3% to 20.8%

The top 5 most utilized opioids,

shown here, accounted

for 81.1% of utilization and 40.3% of cost for all opioids

Extended-release tramadol

#6 in utilization #1 in cost per claim

Extended-release tramadol declined substantially for utilization and cost per claim.29% 32.6%


Opioid Utilization by Claim Age

Opioid Utilization by Claim Age – Managed Prescriptions*

Opioid Utilization by Claim Age – Unmanaged Prescriptions*

20152016

20152016

*Opioid claims only

Greater medical severity among

the managed population drives

opioid usage that results in an

average of 5 opioid scripts per injured

worker using opioids in 2016

Only 32.5% of all unmanaged opioid

scripts are for claims aged 3+ years

Less severe injuries among

the unmanaged population yields an average of 2 opioid

scripts per injured worker using

opioids in 2016

Opioid usage per claim* continues to decline in almost all claim ages for both the managed and unmanaged population.

Injured workers filling opioids in the managed setting contrast significantly in medical severity and drug mix with their unmanaged counterparts.

Managed claims tend to be older with an average claim age of 5.8 years compared with 2.1 years for unmanaged.

70.4% of all managed opioid scripts are for claims aged 3+ years.


Opioid Cost by Claim Age

Opioid Cost by Claim Age – Managed Prescriptions*

Opioid Cost by Claim Age – Unmanaged Prescriptions*

20152016

20152016

*Opioid claims only

Cost per script for opioids has fallen

3.5%with 7 of the first

10 claim age years experiencing

decreases

Cost decreases in claims aged 1-3 years (73.9% of opioid scripts) have been offset by increases in per script costs for more mature claims.

Overall cost perscript for opioidshas experienced

a negligibledecrease of

0.04%


Compound Trends — Aggregate View

Injured Workers Filling At Least One Compound Prescription

Compound Cost

2013201420152016

2013201420152016

The percentage of injured workers filling compound prescriptions for

both the managed and unmanaged

populations declined by roughly

1% point

Compound drugs represented only

2.5% of total drug costs

in the managed population as

compared with

26.1% of total drug costs in the unmanaged

populationThe percentage of drug costs associated with compounds declined 2.9% points for the managed population and 5.8% points of the unmanaged population.

Compounds per claim dropped for both populations: 44.2% for managed and 15.4% for unmanaged.

Compounds Represent:

7.7% of Aggregate Cost

1.3% of Aggregate Prescriptions


Compound Utilization in Top States Ranked by Total Drug Cost

Compound Utilization in Top States – Managed Prescriptions

Compound Utilization in Top States – Unmanaged Prescriptions

20152016

20152016

While not in the top 10 states by total drug cost, 6.1% of scripts in Colorado were for compounds — the highest for all states.

The top 10 states accounted for

47.5% of all injured workers

using compounds

NY, CA, TX, PA, IL, and CT each experienced a more than 50% reduction in the percentage of all claims utilizing compounds.

Five of the top 10 states incurred increasing trends, with CO experiencing the greatest increase at 66.7%.

California accounted for

31.3% of all compound

claimsCalifornia’s 54% reduction in injured workers utilizing compounds was the key driver behind the decrease in unmanaged compound use.


The top 10 states accounted for

60% of all managed

compound cost

California experienced the

greatest reduction at

43.9%

The percentage of total managed drug costs dropped at least 50% for compounds in NY, CA, TX, PA, and IL.

The top 10 states accounted for 79.6% of all compound cost with CA, PA, and TX representing 59.6%.

Compound Cost in Top States Ranked by Total Drug Cost

Among the top 10 states, Texas had the highest percentage of cost for compounds at 6%.

The percentage of total unmanaged drug costs dropped at least 30% for compounds in CA, GA, and NY.

Compound Cost in Top States – Managed Prescriptions

Compound Cost in Top States – Unmanaged Prescriptions

20152016

20152016


Aggregate prescription cost per claim, including both managed and unmanaged script usage, decreased 8.4%

Opioid costs and utilization dropped significantly

• A 10.7% drop in utilization drove a 10.7% decrease in cost per claim.• Opioids represented a smaller share of overall cost and utilization, declining 1.2% points and nearly 1% point,

respectively.

Although opioid trends have shown marked improvement for both the managed and unmanaged settings, differences in claim age and severity of injury have driven trends in opioid utilization, costs, and drug mix

• Opioid utilization continued to trend downward for the managed population, both on a per-claim basis (9.3%) and for the percentage of injured workers utilizing opioids (3.1% points). Similarly, the cost per claim has declined substantially (12.5%).

• Non-opioid medications used to treat pain are on the rise with the younger claim age population represented in the unmanaged setting. This helped reduce opioid utilization (down 19.7% per claim), cost (down 19.8% per claim), and the number of injured workers utilizing opioids (down 3.5% points).

Utilization of compound medications continued to fall with the greatest impact occurring in the managed setting

Managed

• The number of injured workers using compounds is 1%, nearly half of what it was in 2015.• Compound costs also dropped by half from 2015, accounting for only 2.5% of all drug spend.• Several key states (NY, CA, TX, PA, and IL) experienced a reduction of more than 50% in both the percent

of claims using compounds and the percentage of cost associated with their usage.

Unmanaged

• The number of injured workers using compounds fell to 3.1%; this is a drop of nearly 25% from 2015.• Costs associated with compounds accounted for 26.1% of all drug spend, down from 31.9% in 2015.• California, the state with the most injured workers using compounds, saw its compound user population

drop 54%, from 7.1% to 3.3%.

Highlights

26 2016 Drug Trends Series – Specialty Medications and Closed Formularies First Script

Part 4: Examining specialty medications and closed formulariesThis fourth part of our series is dedicated to specialty drugs and closed formularies. Specialty drugs, which are typically used to treat patients with complex, chronic conditions, have become widely discussed in workers’ comp due to their exorbitant per-prescription costs. Although they represent only 1.1% of drug utilization, they account for nearly 5% of prescription drug costs.

This final section will share aggregate specialty drug information and review the differences in specialty cost and utilization among the managed and unmanaged views.


Specialty Drug Utilization

Specialty Drug Cost

Specialty Medications

Specialty Drug Trends in 2016

Specialty Drugs Represent:

1.1% of Aggregate Prescriptions

4.9% of Aggregate Cost

Unmanaged specialty drugs

accounted for

7.9% of all drug

spend, a

51.8% increase

from 2015

Specialty drug utilization as a percentage of total prescriptions was nearly

4X higher for the unmanaged

population than the managed and rose slightly

for both populations from 2015 to 2016

20152016

20152016


Specialty Medication Trends

2016 Trend 2015 – 2016

2016 Trend 2015 – 2016

Condition % of Specialty % of Specialty Specialty Scripts Specialty Cost Usage Cost per Claim per Claim

Blood clotting 46.0% 19.9% 17.1% 14.4%

HIV/AIDS 21.7% 19.6% 32.5% 33.0%

Osteoarthritis 7.4% 8.6% 7.4% 13.0%

Hepatitis 0.4% 7.4% -54.0% -53.1%

Rheumatoid arthritis 1.4% 6.1% 10.6% 21.2%

Top conditions 76.9% 61.6% 18.8% 1.8%

All conditions 19.4% 7.9%

Condition % of Specialty % of Specialty Specialty Scripts Specialty Cost Usage Cost per Claim per Claim

Osteoarthritis 44.3% 32.0% 2.3% 5.5%

Anemia 1.3% 16.2% 693.7% 2,018.6%

Neuromuscular condition 5.5% 15.2% 27.0% 30.6%

HIV/AIDS 7.2% 10.3% 16.0% 2.9%

Immune deficiencies, immunizations 5.2% 5.2% 22.8% 1.0%

Top conditions 63.5% 79.0% 9.1% 36.2%

All conditions 3.4% 29.5%

4 of the top 5 conditions

experienced utilization and cost increases

in 2016 — with the top 5

representing the lion’s share of all managed

specialty medications

The top 5 conditions

accounted for

63.5% of utilization

and

79%

of costs associated

with unmanaged

specialty medications

Top 5 Conditions Ranked by Cost — Managed

Top 5 Conditions Ranked by Cost — Unmanaged

Aranesp® was the primary driver of significant trends for anemia, as well as the 29.5% overall increase in specialty cost per claim.

54% decrease in the utilization of hepatitis medications (including both Harvoni® and Sovaldi®) has helped mitigate increasing cost per claim for blood clotting treatment and HIV/AIDS prescriptions. Blood clotting and HIV/AIDS accounted for 74% of the overall increase in utilization.


Closed Formulary UpdateAs the need to control more than just the cost of workers’ comp prescription medications becomes increasingly apparent, lawmakers continue to explore regulatory opportunities that address utilization management. The primary forms of regulation continue to be state-mandated (closed) formularies, preferred drug lists, and medical treatment guidelines. In 2016, state-specific workers’ comp formulary adoptions included Nebraska, Montana, and New York, as well as proposed formularies in Illinois, Pennsylvania, and Louisiana.

Current formulary/PDL lawsProposed formulary/PDL lawsNo formulary/PDL laws

Formulary Refinement and Nuances Lawmakers and regulators continue to explore modifications and refinements to existing formulary models in search of a model that provides optimal cost savings and minimal disruption to care of injured workers. With regard to formularies, the following are states to watch:

California• Formulary development is

in progress and appears to be a departure from models enacted in other states

• While a customized approach for California’s injured worker population is commendable, it should be balanced with the need for an easily-administered formulary without much further delay

Texas• Texas is moving to close the

compound drug loophole within its formulary imple-mented in 2011

• States considering formulary adoption should look to Texas and identify opportunities to stop financially motivated prescribing practices that have no real medical advantage to the injured worker

New York• At the time of publication, proposed

formulary rules, expected to be effective on or after 12/31/17, are being finalized

• The state already enacted robust treatment guidelines including specific medication directives

• Lawmakers will need to contemplate existing law with formulary develop-ment, ensuring that the two sets of directives are properly applied once in place


Specialty medication trends have continued to increase in 2016

Aggregate specialty medications

• Usage of specialty medications rose 0.1% point from 1.0% of all medications in 2015 to 1.1% in 2016.

• Costs associated with specialty medications increased 1.1% points from 3.8% in 2015 to 4.9% in 2016.

Managed specialty medications

• Specialty medications accounted for 0.65% of all prescriptions and 3.98% of all costs.

• Blood clotting and HIV/AIDS conditions were responsible for 74% of the utilization increase in 2016.

• The 7.9% rise in specialty drug costs would have been more significant had it not been for decreases in hepatitis drug usage.

Unmanaged specialty medications

• Accounted for 2.5% of all prescriptions and 7.9% of all costs.

• Specialty drug utilization as a percentage of total prescriptions was nearly four times higher for the unmanaged population than the managed.

• The growing trend in specialty cost per claim was primarily due to new usage of the anemia medication Aranesp®.

Closed formulary updates

• Adopted state formularies: Nebraska, Montana, and New York.

• Proposed state formularies: Illinois, Pennsylvania, and Louisiana.

Highlights

19.4% increase in scripts per claim

3.4% increase in scripts per claim

7.9% increase in cost

29.5% increase in cost

31 2016 Drug Trends Series First Script

Conclusion & Recommendations

• While it is encouraging to see the continued decline of pharmaceutical utilization within the traditional view, opportunities for enhancing care while optimizing cost still exist.

• The managed and unmanaged views illustrate that having knowledge about prescriptions prior to dispensing can lead to significant improvements in clinical and cost outcomes.

• Gaining insight into the different claim characteristics that comprise these populations can help guide decision-making and allow for preemptive measures to address common challenges that may arise within each group.

• The continued positive shift away from the use of opioids in favor of using alternative analgesics such as NSAIDs and adjuvant pain management drugs such as anticonvulsants and antidepressants is a testament to the collaboration between First Script and our payors.

• Although specialty medications still represent a relatively low volume of prescriptions in the workers’ compensation market, ongoing monitoring of these drugs is necessary due to their high cost and complex adherence requirements.

• The primary forms of drug management regulation continue to be state-mandated (closed) formularies, preferred drug lists, and medical treatment guidelines. The need to control more than just the cost of prescription medications remains; lawmakers must continue to explore the potential for creating regulation that incorporates more utilization management.

Please visit our Drug Trends web page to see the video introductions and individual publications.

https://coventrywcs.com/content/Menu/Home/News_Insights/Drug_Trends.html

https://coventrywcs.com/content/Menu/Home/News_Insights/Drug_Trends.html

Coventry is the leading provider of care and cost management solutions for workers' comp, disability, and auto insur-ance carriers, third-party administrators, and self-insured employers. We design best-in-class products and services to help our partners return injured workers to work, to play, and to life as quickly and as cost effectively as possible. We accomplish this by developing and maintaining consultative partnerships with our clients and stakeholders, built on a foundation of trust that supports the claims management process.

First Script is the Pharmacy Benefit and Drug Utilization Management Program offered as part of the Coventry suite of products. First Script offers an end-to-end program designed specifically for workers’ compensation. We realize that getting 100% of the prescriptions into the network isn’t the end game; it’s what you do with those scripts that matters. Early triage ensures that injured workers know how and where to get a prescription filled, and permits us to intervene aggressively on potentially problematic opioid utilization at the earliest point possible. Through integration with our bill review and case management programs, we are positioned to capture all prescription activity for utilization and total pharmacy risk management, ensuring that we manage not only the First Script, but Every Script.

Coventry Connect® MobileIndustry leading care and cost management solutions on the go

Coventry Connect technology works with Coventry’s integrated suite of

solutions to help adjusters and case managers make informed pharmacy

decisions that lead to better outcomes.

3200 Highland Ave. • Downers Grove, IL • 60515 • 800.243.2336 • www.coventrywcs.com©2017CoventryHealthCareWorkersCompensation,Inc.Allrightsreserved.

The information which is provided herein is offered as a courtesy to our clients. All material is intended for information, communication, and educational purpose only and is in no manner an endorsement, recommendation, or approval of any information. Coventry accepts no liability for the content of this distribution, or for the consequences of any actions taken on the basis of the information provided.

Coventry Workers’ Comp Services@CoventryWC

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