High-Cost Drugs Make Inroads

Biologics and other high-cost specialty drugs can significantly increase spend -- and they are poised to make inroads into workers' compensation claims.

By Brian Carpenter and Kimberly DuBrueler

For risk managers looking to reduce workers' comp claims costs, they should perhaps look no further than specialty drugs. Although their use in workers' comp is not widespread, they can quickly drive up claims costs.

Specialty drugs include biologics, or protein-based medications like Enbrel, Humira and Remicade for rheumatoid arthritis, and nonbiologics, or chemically-derived medications such as Synvisc and Hyalgan for osteoarthritis.

Many are injectable -- requiring broader service capabilities -- or have specific storage requirements. In the last 15 to 20 years, the specialty drug segment has increased from about 30 products to more than 200 -- a number that is expected to double in the next decade. The Express Scripts (ESI/Medco) 2011 Drug Trends study notes that nearly 600 specialty drugs are in Phase II or III clinical trials.

By 2020, ESI/Medco expects specialty drugs to occupy eight out of 10 spots on the Top 10 Drugs list, generate $1.7 trillion in sales and account for 40 percent of total drug spending. With an estimated 7 percent of specialty drugs in development aimed at inflammation -- a common component of pain -- employers and payers need to understand how specialty drugs are poised to impact workers' compensation and what they can do to help manage the spend.

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Most specialty drugs treat complicated diseases, such as cancer and hepatitis, which are not commonly seen in workers' compensation. However, specialty drugs are prescribed with increasing frequency for rheumatoid arthritis, osteoarthritis and blood clots, which may sometimes impact workers' compensation claims.

Research shows that specialty drugs are most likely to appear in claims involving soft-tissue injuries. In a Coventry study, claims involving torn cartilage, ligaments and tendons, accounted for 15 percent of the specialty medication spend. Strains accounted for another 7 percent, and herniations and ruptures accounted for an additional 5 percent.

Osteoarthritis is the most common form of arthritis. Although the causes of osteoarthritis are unknown, occupational overloading of joints or repetitive motion may cause or aggravate the joint degeneration associated with the condition. Most osteoarthritis specialty medications are injected directly into the affected joints to provide lubrication or cushioning. For many disease states, specialty medications are an alternative to traditional therapies; in contrast, osteoarthritis specialty agents are most often used in addition to traditional therapies.

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High-Cost Drugs Make Inroads