Comp pharma expenses set to dive as brand drug moves to generic

One of the biggest cost drivers in pharmaceutical workers compensation costs could dip following the U.S. Food and Drug Administration’s recent approval of several generic versions of one of the most widely prescribed and most expensive brand-name drugs in the workers compensation industry.

That’s if comp payers can work with doctors to get patients to switch to the less expensive versions of Lyrica, an epilepsy drug that is prescribed to some patients to relieve neurological pain, according to experts.

“This is the one brand that we have been waiting to go generic,” said Dr. Paul Peak, Memphis, Tennessee-based assistant vice president of clinical pharmacy at Sedgwick Claims Management Services Inc.

The July 22 approval of the generic versions of Lyrica is “a pretty big deal” for comp payers who have been paying up to $700 for monthly prescriptions of Lyrica, he said.

The patent for Lyrica, the brand name for pregabalin, which falls into the category of anticonvulsant drugs often used to treat neuropathic pain for injured workers, expired June 19. Experts say the FDA’s approval means the less expensive generic version should be in pharmacies in the coming months, according to experts.

“In workers compensation, Lyrica is one of the most frequently prescribed brand medications (and) with … generic manufacturers already approved and more certain to follow, payers can expect to see significant cost reductions quickly for patients taking Lyrica,” said Joe Paduda, Skaneateles, New York-based principal with Health Strategy Associates LLC, which provides comp consulting services.

Several comp studies over the past year put anticonvulsants — with Lyrica named specifically — among the three classes of drugs most often prescribed in comp next to opioids and anti-inflammatories, mostly because it is touted and marketed as a good alternative to addictive opioids. A drug that was intended to treat epilepsy, Lyrica made its way into comp claims when doctors found that it was effective for pain stemming from spinal injuries and other nerve damage, according to experts.

“The good news here is the brand name was about $7.58 per pill (and) a generic manufacturer had it at 57 cents per pill; that’s a whopper of a reduction,” said Dan Anders, Chicago-based chief compliance officer for Tower MSA Partners, a provider of Medicare secondary payer services for comp insurers.

Competition between those offering the generic versions will also contribute to further “significant reductions,” according to Craig Prince, Philadelphia-based clinical pharmacist with Coventry Workers’ Comp.

Why the drug’s popularity for pain management? Opioids, experts say.

“Lyrica has been one of the top drugs in workers comp for several years in light of all the challenges with opioids as an addictive medication,” said Tron Emptage, chief clinical officer for Optum Workers’ Comp and Auto No-fault Solutions in Westerville, Ohio. “This going generic gives us more options, but it is going to take a while to filter to the market.”

One challenge may be getting patients to switch from a brand of drug they may be accustomed to despite the fact that the generic versions will have the same chemical makeup as Lyrica, said Dr. Robert Hall, Westerville-based corporate medical director for Optum Workers’ Comp and Auto No-fault Solutions.

“There’s always that concern from patients in terms of getting them to switch from a brand to a generic; they may feel that the generic might not be as effective when it should be the same,” said Dr. Hall.

“There is that educational component when switching from brand to generic,” he added.

Comp payers will also save when it comes to Medicare set-asides, which are insurerpaid plans in which claims administrators allocate funds from workers comp settlements to cover future medical expenses arising from a work injury that might otherwise be paid by the federal Medicare program, experts say.

The pharmaceutical component of a comp claim settlement can skyrocket with Lyrica attached to a claim, to the tune of $200,000 depending on dosages, according to Mr. Anders of Tower MSA Partners, which helps insurers facilitate Medicare set-asides.

With the availability of a generic version, that figure is more like $10,000, he said.

Lyrica has kept some claims from closing because of the high cost of the Medicare setaside, he added.

The message to those managing comp patient’s prescriptions is to switch as soon as possible, Mr. Anders said.

Pushback from patients is a concern, he said, adding “we find most of those injured workers are open to moving over to the generic, but with a small minority there may be some concern about side effects or effectiveness.”