Future Considerations for Controlled-Release Oxycodone

Oxycodone CR is a slow release opioid narcotic currently indicated for use in moderate and moderate-to-severe pain. When initially released to the market, the indicated use was for pain management in cancer patients and for control of postoperative pain. As the use of controlled-release Oxycodone expanded, problems with addiction and abuse escalated.

In an effort to bring the use of Oxycodone CR under more effective control, H.R. 1366 cited as the “Stop Oxy Abuse Act of 2013” was introduced March 21, 2013 “to direct the Commissioner of Food and Drugs to modify the approval of any drug containing controlled-release (CR) oxycodone hydrochloride, to limit such approval to use for the relief of severe-only instead of moderate-to-severe pain, and for other purposes”. The introduction of the bill followed a petition filed by Physicians for Responsible Opioid Prescribing (PROP) calling for the FDA to modify opioid labeling such that future approval would exclude the term “moderate” from an indicated use for non-cancer pain. As such, approval for use would be limited to severe pain only within this population. However, the bill does not restrict the drug’s use to non-cancer pain but, rather, seeks to limit approval for use to “severe-only pain” for any patient population.

If H.R. 1366 passes, it will operate to remove use of the controlled-release oxycodone drugs for management of any form of moderate pain type diagnoses as an approved indication by the FDA. The prescribing of Oxycodone CR for “moderate” or “moderate-severe” pain would then be considered an “Off Label” use. Within the world of Medicare Set-Aside, provision of controlled-released Oxycodone for such diagnoses would be excluded from the plan of care. Any continued use of Oxycodone CR would require medical documentation and diagnosis of “severe” pain.

2012 Medicare Trustees Annual Report

Continuing Short Term and Long Term Financial Difficulties

The Medicare program has two components. Hospital Insurance (HI) and Supplementary Medical Insurance (SMI).  HI, otherwise known as Medicare Part A, helps pay for hospital, home health, skilled nursing facility, and hospice care for the aged and disabled. SMI consists of Medicare Part B and Part D. Part B helps pay for physician, outpatient hospital, home health, and other services for the aged and disabled who have voluntarily enrolled. Part D provides subsidized access to drug insurance coverage on a voluntary basis for all beneficiaries and premium and cost-sharing subsidies for low-income enrollees. Medicare also has a Part C, which serves as an alternative to traditional Part A and Part B coverage. Under this option, beneficiaries can choose to enroll in and receive care from private “Medicare Advantage” and certain other health insurance plans that contract with Medicare. These plans receive prospective, capitated payments for such beneficiaries from the HI and SMI Part B trust fund accounts.

The Social Security Act established the Medicare Board of Trustees to oversee the financial operations of the HI and SMI trust funds. The Social Security Act requires that the Board, among other duties, report annually to the Congress on the financial and actuarial status of the HI and SMI trust funds. A complete copy of the 2012 report submitted by the Board can be found on the CMS website.

In summary, total Medicare expenditures were $549 billion in 2011. The Board projects that, under current law, expenditures will increase in future years at a somewhat faster pace than either aggregate workers’ earnings or the economy overall and that, as a percentage of GDP, they will increase from 3.7 percent in 2011 to 6.7 percent by 2086 (based on the Trustees’ intermediate set of assumptions). If lawmakers continue to override the statutory decreases in physician fees, and if the reduced price increases for other health services under Medicare are not sustained and do not take full effect in the long range, then Medicare spending would instead represent roughly 10.4 percent of GDP in 2086. Growth of this magnitude, if realized, would substantially increase the strain on the nation’s workers, the economy, Medicare beneficiaries, and the federal budget.

The Trustees project that HI tax income and other dedicated revenues will fall short of HI expenditures in all future years under current law. The HI trust fund does not meet either the Trustees’ test of short-range test of financial adequacy or their test of long-range close actuarial balance.

The Part B and Part D accounts in the SMI trust fund are adequately financed under current law, since premium and general revenue income are reset each year to match expected costs. Such financing, however, would have to increase faster than the economy to match expected expenditure growth under current law.

The financial projections in this report indicate a need for additional steps to address Medicare’s remaining financial challenges. Consideration of further reforms should occur in the near future. The sooner solutions are enacted, the more flexible and gradual they can be. Moreover, the early introduction of reforms increases the time available for affected individuals and organizations—including health care providers, beneficiaries, and taxpayers—to adjust their expectations. Congress and the executive branch must work closely together with a sense of urgency to address the exhaustion of the HI trust fund and the growth in HI, SMI Part B, and SMI Part D expenditures.

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About the Author: Rafael Gonzalez is Director of Medicare Compliance & Post-Settlement Administration. He brings over 20 years of experience in the Workers’ Compensation and Liability insurance industries with a specific focus on Medicare Compliance. Rafael has been responsible for all areas of Medicare Set Aside Allocations (MSAs) including the preparation of MSAs and their approval by the Center for Medicare & Medicaid Services.  At Gould & Lamb, Rafael’s duties include assisting clients with Medicare Compliance issues, specifically on Post-Settlement Administration and client education.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

Generic Medications and the Struggle with “Dispense as Written”

Generic Medications Translate to Potential Medical Savings

William F. BellIt’s hard to escape the news these days… debt ceilings, tax hikes, and targeted spending cuts. Cost of living expenses continue to increase at an alarming rate and we all search for ways to trim our own budgets or look for less expensive alternatives.

A potential bright side, which may affect millions of people everyday and their pocketbooks, is the anticipated arrival of generic medications for seven of the top 20 best-selling medications (Chain Drug Review 2011).  As mentioned in a prior blog, use of generic medications is a key way carriers can contain their overall drug spending and pass it down to the consumer through lower co-pays and affordability. Lower cost for generic medications can also lead to better adherence rates, resulting in decreased hospital stays and unnecessary medical costs as financial barriers commonly seen with brand name medications are eliminated.

Over the next 16 months, generic medications will become available for Lipitor (Atorvastatin), Clopidogrel (Plavix), and Risperdal (Risperidone). Over the next 2 years, Esomeprazole (Nexium) and Celecoxib (Celebrex) will also become available as generic medications. Approximately 100 current brand name medications will lose their patent protection and market exclusivity (Medco Health Solutions) over the next decade. With average prices ranging from $72 for generics to roughly $200 for brand name medications (Wolters Kluwer), the potential savings are a welcome sign of relief for both payers and cash-paying consumers.

These are just a few of the medications that will lose patent protection; all are likely to impact total workers’ compensation costs. As Part-D costs are projected over a lifetime when preparing a Medicare Set Aside (MSA), allocating a lower generic cost when one did not exist previously can have a significant impact on the settlement as well as potentially lowering other medical costs. Thousands of dollars can be saved through the use of generic medications when settlement was impossible due to high cost-brand name medications in a MSA.

Financial Implications of “Dispense as Written” Designation

No savings will be realized, however, unless physicians and patients allow for generic substitution of prescription medications. A study conducted by researchers at CVS Corporation, Brigham and Women’s Hospital, and Harvard University concluded that when physicians and/or patients demand a brand name medication to be dispensed through a “Dispense as Written” designation, overall costs to payers rise dramatically. The clinical research study by lead author William Shrank titled “The Consequences of Requesting Dispense as Written” examined some of the financial implications of brand name dispensing when generic medications exist.

Although each state has its own generic substitution laws, refusal by a patient at time of fill or a “Dispense as Written” designation by a prescribing physician cannot be superseded by the aforementioned state substitution laws.

Some of the highlights of the study included:

  • A reduction of approximately $7.7 billion in costs to the overall healthcare system if generic medications were dispensed in lieu of brand-names.
  • One out of five physicians who write prescription medications indicate “Dispense as Written” with no generic substitution allowed was due to a negative perception of generic medications.
  • Approximately 2% of all prescriptions are filled with brand name medications due to patient refusal.

What can be learned from all of this?

  • Ultimate payers of workers’ compensation pharmacy expenses should work closely with their respective Pharmacy Benefit Manager (PBM) to ensure they are maximizing generic equivalent potential.
  • If physician requested or patient requested brand name medications are dispensed, the PBM should communicate with the physician or patient to determine the exact reason why a generic medication was refused.
  • Payers should be familiar with their state specific generic substitution laws and understand common medications which have generic medication equivalents.

If there is to be any sort of approach to the ever-increasing workers’ compensation costs, the dispensing of generic medications will continue to be at the top of the list of any cost-containment strategy.


About the Author: William F. Bell, Jr. is the Senior Clinical Pharmacy Specialist for Gould & Lamb, LLC. His primary responsibility is the review of a claimant’s pharmacotherapy regimen and the identification of off-label medications in a Medicare Set Aside Allocation.  He has given numerous presentations on the subject of medication management and how it relates to Workers Compensation and Medicare Set Aside Claims.  Bill has also authored two continuing education articles for the Pharmacist’s Letter, a nationally known education resource for practicing pharmacists.

Complexity of Off Label Drugs Prompts CMS to Exclude Off Label Medications

William F BellOff Label Drugs – Part One

As we know, off-label prescribing is both commonplace and legal in the United States; it is off-label marketing that is suspect. Off Label drugs can be defined as the use of a medication outside of its specific Federal Drug Administration (FDA) indication. An examination of 160 of the most commonly prescribed medications showed that off-label use accounted for 21% of these medications, while 74% of these prescriptions written for conditions not medically supported by the literature (Stafford, 2008). A well-known medication in the Workers’ Compensation (WC) world, Gabapentin (Neurontin) has close to 10 off-label drug indications in addition to its FDA indications of both seizure management and post-herpetic neuralgia.

As part of the changes outlined in its guidance for submitters memo (June 1, 2009), the Centers for Medicare Medicaid Services (CMS) memo determined that prescription medications used for any condition or indication, whether FDA approved or not, were to be included when calculating the final costs associated with Part-D of a Workers’ Compensation Medicare Set Aside  WCMSA. This meant that medications, such as Actiq and Lidoderm, must be allocated for in a WCMSA, even though they are used for conditions not routinely seen in Workers’ Compensation cases. Through their professional and medical judgment, physicians are free to write for prescriptions regardless of the condition it is intended to treat.

Possibly due to pressure or in keeping with the Medicare Part-D statute, CMS reversed its previous position on the inclusion of off-label medications in a WCMSA. Essentially, CMS will now exclude those prescription medications, which are not FDA, approved for a particular indication and are not supported by one or more citations in the compendia. The compendia includes the American Hospital Formulary Service Drug Information (AHFSDI), United States Pharmacopeia- Drug Information (USPDI), and the DRUGDEX Information System. Now, Actiq and Lidoderm can be excluded from the final Part-D costs in a WCMSA as their off label uses are not supported by the compendia.

How Complex Is the Off Label Drug Issue?

Off label drug complexitiesThe above examples show just how complex the off-label drug issue really is.

First – we need to understand the specific FDA indications of medications utilized.
Second – we need a thorough understanding of what exactly the compendia is and how the literature can be interpreted and validated for accuracy, free from bias.
Third – we need to put both together and come up with a sound clinical judgment to in deciding which medications should be included and excluded from a WCMSA, thereby providing a safe and effective medication regimen for long-term use.

As a licensed pharmacist for close to twenty years, I fully understand both the pros and cons with off-label use of medications.

The Pros

A wider access to medications for those with rare conditions resulting in lower medical expenditures and hospitalization costs.

The Cons

Unsupported, undocumented research and safety profiles with use of medications for conditions that they had not been originally tested for.

However, since a majority of workers’ compensation claimants use medications for chronic and not rare conditions, (such as pain management), off-label exclusion of medications is one way to contain both the costs in an WCMSA as well as allocated for safe and effective medications while not adding to unnecessary costs and secondary conditions.

Be sure to watch for my post on Off Label Drugs – Part 2 which will focus on the compendia and the complexity of these findings as well.

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