by Charlotte Chovanec, RN, BSN, MHA, Clinical Director & Leah King, PharmD, JD, Independent Pharmacy Consultant
Recently, the price of omeprazole, a generic version of Prilosec, decreased rather significantly.
History of Prilosec (Omeprazole)
Prilosec, the first proton pump inhibitor approved by the FDA in 1989, has been widely utilized for more than three decades to treat a variety of gastrointestinal conditions such as heartburn, acid reflux and gastric ulcers. In the early 2000’s, the Federal Drug Administration (FDA) approved the first generic versions of Prilosec and approved over the counter (OTC) status for certain strengths.
Dramatic Price Decrease
Based on Compendia pricing data, the Centers for Medicare and Medicaid Services (CMS) updated their Workers’ Compensation Medicare Set-Aside (WCMSA) portal pricing in August for the 40mg strength of omeprazole. The price decrease for the 40mg formulation fell dramatically, from $6.68 per capsule to $0.14 per capsule. As you know, when submitting a WCMSA to CMS for approval, it is CMS’ practice to price most medications for the life expectancy of the claimant, which makes any prescription drug allocated very impactful to the overall cost of the WCMSA. While researching the significance of this decrease, we noted that there are well over 500 National Drug Code (NDC) numbers for omeprazole of varying strengths, formulations, and combinations. The WCMSA portal pricing is indicative of the lowest AWP pricing notated for an identified drug. In this instance, we can see that the pricing is significant when submitting a file to CMS for review.
Potential for Big Impact on WCMSAs
Consider an example of a claimant who is prescribed omeprazole 40mg daily due to simultaneously being prescribed an anti-inflammatory agent. Although the FDA has only approved this medication for short term use, it is CMS’ philosophy to allocate most medications based on current prescribing patterns for the life expectancy of the claimant. In this scenario, if a claimant is prescribed this medication once daily, over a life expectancy of 15 years at $6.68 per capsule, the total cost would be $36,072.00. Compare that cost to the updated pricing of $0.14 per capsule, over a 15-year life expectancy, with a total cost of $756.00, resulting in savings of $35,316.00.
This represents significant savings that may impact how a claim is settled.
Another question that comes to mind is the claimant’s ability to obtain his/her prescription at this fantastic low price. When looking at a national discount pricing card program, the cost for omeprazole 40 mg ranges from $0.26 to $0.88 per capsule. While not the lowest price, this still represents a significant savings over the prior CMS pricing of $6.68/capsule, as all drug prices have a big impact on the longevity of the WCMSA.
Tools that Enable Savings
Drug pricing varies greatly by NDC number and is influenced by multiple contracts between retail pharmacies, the pharmacy benefit manager, and the drug manufacturers. When the AWP pricing methodology is used it can result in over or underfunding an WCMSA. However, one tool in the Claims Adjuster’s toolbox is professional administration services. Professional administration relies on contracted discounts for medical and pharmacy services and facilitates accurate record keeping and reporting to the CMS annually (to ensure Medicare’s interests are adequately protected).
For injured workers who choose to self-administer their WCMSA, programs are available to help workers reduce their prescription costs. One such program is MEDVAL Rx powered by AWPRx, a prescription drug discount card, which offers deep discounts and is accepted by over 76,000 pharmacies nationwide.
These tools add a layer of security for the insurance carrier and the injured worker that Medicare’s interests are adequately protected, while still allowing injured workers to obtain their medications at a price that protects the longevity of their WCMSA.
Monitoring Drug Costs
In an industry where price increases seem to be the norm, it’s refreshing to report a price decrease of this degree. As always, we’ll continue to monitor drug costs and report relevant changes in pricing to our readers.
At MEDVAL, we are uniquely positioned to optimize the timing of your WCMSA submission while monitoring for anticipated price decreases. If you have questions, or would like to learn more about medication pricing, contact us or submit a referral.