Repackaged pharmaceuticals in the California workers' compensation system: from distribution and pricing options to...

The California Workers' Compensation (WC) pharmaceutical pricing system cannot price 60% of National Drug Codes (NDCs) (mostly repackaged pharmaceuticals). This study will estimate the lost savings due to repackaged pharmaceuticals and potential cost savings associated with alternative pharmacy fee schedules for repackaged pharmaceuticals. In addition, we will determine what characteristics explain repackaged costs to identify reasons for repackaged pharmaceutical use.

All pain-related repackaged pharmaceuticals were identified by NDC using claims data from the California Workers' Compensation Institute (CWCI) database during 2002.

Repackaged pharmaceuticals represented 55% of all NDCs and 92% of all Medi-Cal non-equivalent NDCs, but only 22% ($8,494,297/$38,968,233) of total pharmacy costs. Total repackaged pharmaceutical costs could be reduced by 36% ($3,059,177) using an alternative formula based on Medi-Cal. Compared with Medi-Cal priced manufacturer-packaged pharmaceuticals, repackaged pharmaceuticals are approximately 85% more expensive on a cost-per-pill basis.

We propose limiting the generous pricing of repackaged pharmaceuticals. However, Medi-Cal payment rates may be extreme, and more moderate repricing might compensate physician-dispensing time more fairly and preserve patient access.