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Drug Formularies: A Growing Trend In Workers’ Compensation

Posted by Ben Roberts on December 17, 2018 at 5:51 PM

A drug formulary is a list of medications that may or may not be prescribed to an injured worker or patient. Patient safety is paramount specifically with regards to workers’ compensation. A medication’s potential inclusion on the formulary and whether or not it should be permitted to be prescribed receives primary consideration, as opposed to the cost category that the medication may fall under.  

Drug Formularies in the United States

There are 9 different states who have implemented drug formularies thus far – Arizona, Arkansas, California, North Dakota, Ohio, Oklahoma, Texas, Tennessee and Washington. In Texas’ case, there has been an 83% decrease in the cost of certain drugs within the first year of its formulary’s introduction in 2013.

The process for implementing a new drug formulary varies from state to state. While there has been interest from other states upon studying Texas’ results, there are a number of other variables that need to be reflected on before a formulary is considered by legislators and regulators.

What to Consider Before Implementing a Drug Formulary

  • The formulary should be able to apply to all injured workers without a wide variety of exceptions
  • A clear set of documents detailing what drugs will be subject to the formulary, readily available and accessible
  • Regular updates to the list of medications
  • Graduated implementation process – institute a period of time/deadline where the formulary would go into effect for new injuries and then a separate period of time/deadline for existing injuries.
  • Determining criteria and guidelines that will be followed within the formulary
  • Establishing a preauthorization process
  • An appeals process that will serve as a mechanism to appeal requests
  • Aligning success metrics with regulatory intent

A drug formulary is a great tool to use to address the overuse of opioids in your state, however, it is not the only way to curtail the use of opioids. Other options include prescribing limitations on opioids, mandated education on prescribing, guidelines, urine drug testing and monitoring, and prescription drug monitoring requirements.

As a risk manager, it is important to consider how your jurisdiction varies from another when attempting to implement a drug formulary since it is not guaranteed that your formulary will yield the same results as another jurisdiction or state.