Michigan Injured Workers’ Drug Costs Lowest in Study

The cost per claim of prescription drugs used to treat injured workers in Michigan is the lowest among 16 states studied.

According to the Workers Compensation Research Institute (WCRI), the average payment per claim for prescription drugs in Michigan’s workers’ compensation system was $261—37 percent lower than the median of the 16 states in the study.

The main reasons for the lower prescription costs in Michigan include lower prices paid to pharmacies for some commonly used medications, fewer prescriptions for brand names when generic equivalents or alternatives were available, and fewer prescriptions per claim.

The WCRI study, Prescription Benchmarks for Michigan, found that the average price per pill paid to pharmacies in Michigan was 15 percent lower than the median of the 16 states. Average prices paid per pill were lower in Michigan than in the median state for some medications, and typical for other medications that were commonly used to treat injured workers in the state.

Less frequent prescriptions for brand name drugs to treat injured workers in Michigan also contributed to the lower average prices paid to pharmacies in the state. The percentage of pharmacy-dispensed prescriptions that were for brand names was 15 percent in Michigan, compared to 17 percent in the median state, according to the study.

The study also found that the utilization of prescription drugs in Michigan was lower because physicians wrote and workers filled fewer prescriptions. The average number of pills per claim in Michigan was 20 percent lower than the median state. This was seen for many medications that were commonly used in treating injured workers in Michigan.

One factor that may have raised pharmacy costs in Michigan was that some physicians wrote prescriptions and dispensed the medications directly to the patient. This accounted for 27 percent of all prescriptions. On average, physicians were paid more per pill when they dispensed than pharmacies were paid for the same prescription.

WCRI is a nonpartisan, not-for-profit membership organization conducting public policy research on workers’ compensation, healthcare and disability issues.