The good news is that drug cost inflation in workers' compensation has moderated considerably in recent years. The bad news is that this moderation is not industry-wide, but rather favors those payers who have worked long and hard to rein in drug costs. The reward has been considerable: the best performers – those who focused on managing utilization – actually saw their drug costs decline over the past year.
For five consecutive years, Health Strategy Associates, LLC has conducted an annual survey of executives and senior management at workers' compensation payers on prescription drug management. During that time, we have seen pharmacy costs grow even faster than medical expenses, and they now account for 14.5 percent of workers' compensation medical expenses (more than $4 billion).
The survey draws responses from decision-makers and operations staff at carriers, TPAs, large employers, and managed-care firms. With 2007 drug expenses ranging from $1 million to $147 million, respondents' total prescription expenditure amounted to $777 million, or 18.5 percent of total estimated workers' compensation drug spending.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
