Thursday, July 26, 2012

Courage in Illinois: Doing the Right Thing on Repackaging

Illinois is working through a regulatory change that would cap the price of repackaged drugs at AWP + a dispensing fee.  As I've previously argued, this is the right way to go about changing the practice of physician dispensing.  By eliminating the financial incentive to dispense medications, but maintaining the physician's right to do so for the rare cases where an injured worker may truly benefit from getting scripts in the office, the state leaves all stakeholders with the right mix of incentives. 

What's unique about Illinois, however, are the two votes that took place within the last few days.  The Illinois Workers' Compensation Commission voted 9-1 to move ahead with revisions to drug repackaging rules in the state, despite a 4-3 vote from the medical advisory board NOT to proceed.

At the risk of appearing dramatic, I view this relatively small procedural victory as a potential tipping point in the legislative/regulatory landscape around drug repackaging and physician dispensing.  Predictably, the insurance and employer community likes the new rule while the physician community is opposed.  But in this case, the physician community said "no" and the WCC moved forward anyway.  They did so because the evidence, data, and logic tells them this is the right thing to do. 

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  1. Excellent observation and thanks for sharing. I was just discussing this yesterday with a co-worker and the issue of AMA self-policing this voluntarily would be ridiculous. I would only caution that the dispensing fee needs to be reasonable and realistic but not excessive. Charging a $100 re-packaging and re-dispensing fee on a $5 prescription wouldn't help much.

  2. FYI - Dispensing fee proposed here would be $4.18 - but I agree completely that the repack or dispense fee is a critical piece that can make a seemingly positive regulatory move turn out badly for everyone.

  3. Please remember repack awp's are up to twice regular awp. Oklahoma solved the problem by not allowing the use of Repackage awp for the pricing formula. It is making a big impact

    1. Excellent point. FYI - the proposed Illinois rule would, like Oklahoma, require the use of the underlying manufacturer's NDC (and, therefore, AWP) for the pricing formula.