California plans on implementing a closed drug formulary to its workers compensation industry in order to match its counterparts of Texas and Washington State. They’re doing this in hopes to reduce opioid use and overall costs, officials said.
David Lanier, secretary of the California Labor and Workforce Development Agency in Oakland, ordered the DIR to begin the process to establish a formulary, said Christine Baker, the director of the DIR, which oversees the Division of Workers’ Compensation.
“We are poised to move forward on a formulary and use it in the California system,” she said.
By implementing an evidence-based prescription drug formulary the state would severly limit the overuse of certain medications, particularly opioids, as states such as Texas and Washington have already done.
Texas’ formulary allows a broader choice of drug groups and brand drugs, while Washington’s formulary has more limited choices. Both, however, would significantly reduce pharmacy expenses in California, concluded a study last October by the California Workers’ Compensation Institute
A bill pending in the California legislature, A.B. 1124, would direct state officials to establish an evidence-based drug workers comp formulary effective in mid-2017. A.B. 1124 was passed by the Assembly and ordered to the Senate in June, and a state Senate committee is to hold a hearing on the bill Aug. 17.
However no legislation gets passed without opposition.
“It could get rammed down everyone’s throats and the injured workers don’t have a voice in the matter,” said Robert Rassp, a Sherman Oaks, California, attorney who represents comp claimants. He expressed concern that a closed drug formulary could prompt injured workers to go outside the comp system to get drugs through their group health coverage.
But California regulators believe they already have the authority under the state’s labor codes and regulations to move forward with a closed drug formulary even without the bill, Christine Baker says.
Passage of A.B. 1124 could actually restrict implementing a closed drug formulary by including specific mandates, said Steve Suchil, the American Insurance Association’s Assistant Vice President of state affairs in Sacramento, California.
Adopting a formulary could benefit California, as it would address the current lack of pricing control and provide guidance on prescribing and usage of prescription drugs, Suchil states.