Price Charged for Nausea Drug Should Make Employers Sick

“Workers’ Comp” Pharmacy Charged $1,635.48 for $16 Medication

????????????????? Ondansetron is a common, cheap, generic drug often used to combat nausea or to prevent stomach upset from the use of other medications.? Mark Cuban’s CostPlus Drug Company, Rite Aid, Walmart, Costco, etc.? all sell the drug for between $7 and $16.? However, due to the bizarre and anachronistic system used in Pennsylvania workers’ compensation, a self-insurer was charged $1,635.48 for the very same medication, an overcharge of about 9,800% - and this this is not unusual in PA workers’ comp.

?????????????????? Despite case law holding that Red Book AWP (“average wholesale price”) is inflated and inaccurate, many “workers’ compensation” pharmacies continue to charge the outlandish and unjustifiable amounts listed in Red Book.? Despite the name of the resource, Red Book “average wholesale prices” can be hundreds of times higher than actual wholesale prices and even 100-fold higher than normal retail prices paid by non-workers’ comp payers.?

????????????????? A recent study of drug prices by the WCRI found that Pennsylvania is number one in America in the prices charged for prescription medications in workers’ compensation.? A survey of prices charged by workers’ compensation pharmacies found that their prices average 10 times higher than actual wholesale prices as reported by the federal government in its NADAC (National Average Direct Acquisition Cost) resource.?

????????????????? There are many reasons that unsuspecting self-insureds and insurers pay grossly inflated prices for drugs in PA comp.? A big reason is that until recently, companies did not realize that Red Book AWP is a misnomer.? Companies thought that they had to pay Red Book AWP if that is what was billed.? Companies also failed to see the importance of the Federated Insurance case, which barred further use of Red Book AWPs because they are so wildly inaccurate.? Many companies thought that their PBMs (Pharmacy Benefit Managers) were already doing everything to reduce drug prices, failing to see that some PBMs have conflicting interests that may prevent them from aggressively challenging high drug prices, especially when the bills are from pharmacies outside of their designated networks.

????????????????? The most upsetting fact is that employers and insurers routinely pay senseless prices for drugs from “out-of-network” pharmacies.? A recent study found that almost all such pharmacies? billed in excess of normal retail prices.? Although employers and insurers can take immediate action to reduce these charges by as much as 99%, few choose to do so.? There is a 40-year history of paying insane prices for drugs in PA comp, and? although the courts have opened a route to bring sanity to the process, doing so requires overcoming institutional inertia.?

Cliff Goldstein, Esq., formerly the CEO and a Senior Litigator at Chartwell Law, has 35 years of experience in litigating complex workers' compensation cases.? He now concentrates solely on addressing excessive pricing, fraudulent practices, abuse, and waste regarding drugs used in workers' compensation cases.? He can be reached at 215 588 4901 and [email protected]

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This article does not provide legal advice.? All cases are unique and if appropriate, should be discussed with an attorney of the client’s choosing.? This article is intended only to stimulate discussion, and its contents are not a substitute for independent research and legal consultation before taking or refraining from any action.? This article is merely an expression of opinions of the author.? This article does not create or imply an attorney client relationship.? Do not take or refrain from taking any action based on this article and be sure to consult with an attorney of your choice about the risks of taking or refraining from any actions.? The prices and other numbers in this article are examples taken from websites at the time the article was written. Actual prices and other data will be different and change frequently, and the figures presented are only examples.? Not all PBMs work under the same standards, formulae, and terms, and PBM? contracts vary.? Prices for drugs should be examined based on the type of drug, NDC number, provider, billing entity, prescriber, NADAC or other schedules, and other factors, and payments should be made in accordance with the then-current law.? The law in this area is in a state of flux with cases pending appeal.?? Some drugs do not have NADACs.? Some drug bills to comp payors are for non-prescription medications, raising a series of additional issues to address.? No particular pharmacy, PBM, billing company, or doctor? is accused herein of any wrongdoing.? Not all out of network or workers’ compensation pharmacies use the same pricing standards or models and there is great variation in prices and terms between companies and among types of drugs.? Some workers’ compensation and some out of network pharmacies charge significantly less than the example cited in this article, and some do participate in price negotiations via PBMs.? This article is based on a small sample of limited data that may not be representative of the industry as a whole.? This article does not represent the opinions of any company or law firm and is the copyrighted property of the author.? It may not be reproduced in whole or in part without the permission of the author.? Cliff Goldstein is licensed to practice law in Pennsylvania and maintains an office in Merion Station, PA.? For more information, please contact Cliff Goldstein at [email protected] .?