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Study: California reform limiting prices for MD-dispensed drugs is a success

A recently released study by the Workers Compensation Research Institute examined one of the more hot-button questions in the area of workers' compensation defense law: Should states should enact legislation/regulations limiting the prices paid for drugs dispensed by physicians?

In order to answer this question, WCRI looked no further than right here in California. Back in 2007, state lawmakers enacted a revision to the statute governing the prices paid to physician-dispensers. Specifically, the revision mandated that all physician-dispensers be paid prices for prescription medications that are comparable to the prices paid to pharmacies for prescription medications.

WCRI researchers provided the following example of prescription drug costs to illustrate how the reform worked.

Prior to the change in the statute, California physicians were paid $.85 per Vicodin pill -- the most common drug -- while pharmacies were paid $.43 per Vicodin pill. However, after the reform was introduced, California physicians were paid $.52 per Vicodin pill while pharmacies were paid $.48 per Vicodin pill.

The study, entitled "Physician Dispensing in Workers' Compensation," also addressed one of the primary concerns of states that have yet to enact some sort of reform concerning physician-dispensing of prescriptions.

The primary concern is that physicians would no longer dispense certain medications once it no longer became profitable, effectively limiting patient access to certain drugs. Here, the researchers determined that prior to the reform, 55 percent of all prescriptions in California were dispensed at the offices of physicians and that after the reform, 53 percent of all prescriptions in California were dispensed at the offices of physicians.

"There is a great discrepancy between what doctors and pharmacies charge for dispensing the same drug," said Dr. Richard Victor, Executive Director of WCRI. "One question for policymakers is whether the large price difference paid when physicians dispense is justified by the benefits of physician dispensing. Policymakers can learn from the California experience."

Stay tuned for further developments in the area of workers' compensation defense law...

This post was provided for informational purposes only and is not to be construed as legal advice.

Source:

Workers Compensation Research Institute, "New regulation limit the prices paid for doctor-dispensed RX and reduce costs, but unlikely to reduce patient access," July 19, 2012

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