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Study proposes closed formulary in NC to cut workers’ comp costs

Paying benefits to injured workers isn’t cheap, and states are continually working to come up with ways to make the system more efficient and to reduce the number and cost of claims. One of the recent recommendations from a new study by the Workers’ Compensation Research Institute is that North Carolina’s workers’ compensation systems could benefit from a closed drug formulary, or a system in which there is a defined list of the drugs the workers’ compensation system would cover.

The study specifically found that a closed formulary that mimics the prescribing patterns used in Texas would significantly reduce prescription drug costs for state workers. The study said there could be a reduction in total prescription costs of 30 percent in three years, which amounts to nearly $8.7 million. 

Closed formularies would probably largely result from the state negotiating competitive prices with drug manufacturers, but whatever the process would be, it isn’t clear how any benefits achieved with a closed formulary would weigh against the disadvantages to workers. Closed formularies would certainly decrease the ability of workers to purchase the prescriptions they want. In some cases, this might mean purchasing drugs that may not be as effective.

Whenever employers and insurance companies seek to cut costs expended on workers’ compensation claim, there is the danger that employers will get the short end of the stick. One of the potential issues for injured employees in North Carolina’s current system is reimbursement of prescription drug costs. Workers who are injured on the job and who require prescription medication to treat their condition can sometimes run into problems obtaining reimbursement, and should seek the assistance of an experienced workers’ compensation attorney to ensure their rights are protected.

Source: Business Insurance, “North Carolina weighs benefits of closed drug formulary,” Stephanie Goldberg, March 17, 2016. 

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