Good afternoon Chairman Scavello, Chairman Keller and members of the House Labor & Industry
Committee. Thank you for the opportunity to provide testimony today on House Bill 1846.
My name is Dr Jennifer Dragoun, and I am the Vice President and Chief Medical Officer for AmeriHealth
Casualty Insurance Company and CompServices Inc. (AHC/CSI). AmeriHealth Casualty and CompServices
are wholly owned subsidiaries of Independence Blue Cross. We have offices in Philadelphia, Pittsburgh,
and Camp Hill and provide workers compensation insurance and third party administration services for
approximately 275,000 workers in Pennsylvania.
I am board certified in Family Medicine and practiced in Pennsylvania for 5 years before joining
Independence Blue Cross (IBC). Immediately prior to transitioning to AmeriHealth Casualty (AHC/CSI), I
was the Medical Director for IBC’s pharmacy benefits company, FutureScripts until its sale in 2010. In
this role, I developed medication safety initiatives, discussed medications with treating physicians, made
decisions on medication policies and coverage, and reviewed cost containment strategies for
prescription medications.
I am here today to address patient safety issues, needless cost born by Pennsylvania employers and to
address a growing and dangerous trend in the practice of medicine.
Physician dispensing occurs when a treating physician supplies a prescribed medication, typically at the
time of the office visit. Proposed benefits include reduced barriers to medications and presumably a
higher compliance rate with taking the medication.
Repackaging describes the practice of taking a medication supplied in bulk, breaking it down to
individual quantities and re-packaging the medication at a higher cost. National Drug Codes (NDC
codes) are used to bill medications and are specific to each medication down to the packaging format.
When a provider splits a bulk package of medication, it allows the provider to bill a “new” NDC at a
significant mark-up. This is an effective approach to circumvent the state workers’ comp fee schedule.
Physician dispensing is increasing in Pennsylvania. A Workers Compensation Research Institute (WCRI)
study found that 23% of prescriptions were dispensed by physicians in 2011, a 35% increase from three
years earlier1.
More significantly, the cost of medications when dispensed by physicians is much higher. One of the
most commonly prescribed medications, Vicodin, a narcotic pain killer, cost more than three times as
much when dispensed by a physician. Another commonly prescribed medication available over-thecounter for stomach acid reflux, Prilosec OTC, was found to cost an average of 11 times more when
dispensed by physicians1. Four of the top ten medications dispensed by physicians in Pennsylvania are
available over-the-counter without a prescription at significantly lower cost.
Not only are costs higher, but more importantly, there are more opportunities for medication errors,
interactions and duplicate prescriptions when medications are dispensed by physicians.
Frequently injured workers see multiple physicians. For example, an injured worker may see an
occupation health doctor and an orthopedic doctor, in addition to their own primary care doctor and
specialists. Many patients are unable to accurately report their current medications and dosing. A
response to a request for current medications might commonly be: “I take a white pill twice a day and a
small round pill at night.” Only with completely accurate patient reports can medications be checked for
possible interactions when dispensed by a physician.
When all prescriptions are filled at a pharmacy, interactions and duplicate medications can potentially
be detected and unsafe interactions avoided. These double-checks for patient safety are absent with
physician dispensing.
We recently had an injured worker who was taking multiple medications. He was given one for his back
pain, one for his knee pain, and one for headaches, each by a different physician. He believed each of
these medications to be for the distinct problem. Not knowing that these medications were all similar
and related narcotics, he was unwittingly put at risk for an increase in dependence, medication side
effects, and overdose.
Particular vigilance regarding narcotic medications is needed, as prescription drug abuse has reached
epidemic proportions. The quantity of prescription pain killers sold quadrupled between 1999 and
20103. Prescription drug abuse has long surpassed all other illicit drugs for mortality, resulting in more
deaths than cocaine and heroin combined4. Improvements in the monitoring and distribution of these
medications are essential to the health and safety of Pennsylvanians.
Narcotic overuse and abuse can either be unintentional, as in the example above, or intentional. The
most common source for prescription drugs of abuse is a legally obtain prescription4, and some of the
most commonly prescribed medications for injured workers are narcotic pain medicines. There have
been many instances of injured workers obtaining multiple narcotic prescriptions from multiple
physicians, commonly known as “doctor shopping,” with the intent for abuse. Physician dispensing
makes this practice easier. Centralizing these prescriptions improves the possibility of detection.
Not only does physician dispensing circumvent safety processes, it can encourage over-prescribing and
delay recovery. Results from the Florida ban on physician dispensed narcotics suggested that physician
dispensing encourages overall higher narcotic prescribing and the prescribing of stronger narcotics5. A
study by the California Workers Compensation Institute found, in claims where a physician dispensed
repackaged drugs, lost time was increased by almost 10%, medical costs were 16% higher and indemnity
costs were 13% higher6.
The primary argument supporting physician dispensing is increased medication compliance and easier
medication access. While increased compliance is a goal for many conditions treated in the primary care
office such as diabetes, high blood pressure, and high cholesterol, for most cases of injury, increased
medication compliance does not improve the outcomes for the injured workers.
Most of the medications prescribed for work injuries, including the majority of physician dispensed
repackaged medications in Pennsylvania, are for symptomatic treatment. These medications include
anti-inflammatories, muscle relaxers, and narcotics1. Artificially increasing compliance adds no value to
the injured worker as these medications generally do not improve structure, function, or outcome, but
treat the symptom of pain as needed. All of these medications carry potential side effects, and
encouraging increased use of these medications may be detrimental. The injured worker should take
only what is necessary and not what is convenient and available.
Narcotic pain medications, in specific, have been shown to negatively correlate with function and long
term outcomes. Current medical evidence suggests that long term narcotic medications do not improve
pain or functional status7. Injured workers who take higher amounts of narcotics on average take three
times as long to return to work8. Another study found that prescriptions for opioids for more than 7
days increased long-term disability9. Early prescribing and prolonged prescribing of narcotic medications
hinders, rather than facilitates return to function.
House Bill 1846 addresses many of these hazards, allowing an initial supply of medication and the
careful balance of patient access and safety. The limits to reimbursement levels to Average Wholesale
Price (AWP) at 110% of the original NDC removes unnecessary cost born by Pennsylvania employers that
is out of scale with pharmacies providing the exact same medications with enhanced safety measures.
The bill provides for improved detection of interactions, duplicate prescriptions, and possible abuse.
I would suggest the bill go further to protect injured workers in addition to the current provisions, I
recommend that physician dispensing of all narcotics be banned as has been done in other states. To
further protect injured workers, all prescriptions should utilize a pharmacy benefits manager (PBM) for
safety mechanisms and duplicate prescriptions to be fully recognized.
Our primary concern needs to remain focused on the health and well-being of Pennsylvanians injured on
the job. This is an important issue for legislature to address now before Pennsylvanians are further
harmed not only by their injury, but by their treatment.
Thank you again for the opportunity to testify. I would be happy to answer any questions.
Sources:
1. Wang, D. et al, Physician Dispensing in the Pennsylvania Workers’ Compensation System.
September 2013, Workers Compensation Research Institute
2. Wang, D. Physician Dispensing in Workers’ Compensation. July 2012, Workers
Compensation Research Institute
3. CDC Vital Signs, Prescription Painkiller Overdoses in the US. November 2011 Centers for
Disease Control and Prevention
4. National Survey on Drug Use and Health. 2010 US Dept. of Health and Human Services,
SAMHSA
5. Thumula, V. The Impact of Banning Physician Dispensing of Opioids in Florida. July 2013,
Workers Compensation Research Institute
6. Swedlow, et al, Differences in Outcomes for Injured Workers Receiving PhysicianDispensed Repackaged Drugs in the California Workers’ Compensation System. CWCI
Research Brief, February 2013, California Workers Compensation Institute
7. Manchikanti L., et al, Effectiveness of long-term opioid therapy for chronic non-cancer
pain. Pain Physician 2011 Mar-Apr;14(2): E133-56
8. Swedlow et al, Pain Management and the Use of Opioids in the Treatment of Back
Conditions in the California Workers’ Compensation system. CWCI Report, June 2008,
California Workers’ Compensation Institute
9. Franklin GM, et al, Early Opioid prescription and subsequent disability among workers
with back injuries: the Disability Risk Identification Study Cohort. Spine 2008 Jan
15;33(2):199-204