For Immediate Release
March 6, 2019
HARRISBURG - A report to the state legislature by the Workers’ Compensation Advisory Council uncovered dramatic spikes in costs associated with non-FDA approved compound pain creams and the emergence of so-called “new pharmacies,” described as those beginning operation since 2013 and which appear to specialize in dispensing these questionable medications at staggering costs to employers.
The issue of compound creams and “new pharmacies” was the focus of a series of articles by the Philadelphia Inquirer exposing what one expert called an “unholy alliance.” As reported in a 2017 article: “Three partners at [a workers’ compensation claimants] firm and its chief financial officer are majority owners of a mail-order pharmacy in the Philadelphia suburbs that has teamed up with a secretive network of doctors that prescribes unproven and exorbitantly priced pain creams to injured workers — some creams costing more than $4,000 per tube.” The article goes on to explain how the firm “sends clients to preferred doctors and asks them to send those new patients to the law firm's pharmacy, Workers First. The pharmacy then charges employers or their insurance companies for the workers' pain medicine, sometimes at sky-high prices, records show.”
According to the recent report, prescription drug costs coming from “new pharmacies” was 1 percent in 2013; in two years that number jumped to 52 percent. During this same time period, the percentage of prescriptions filled at “new pharmacies” went from effectively 0 percent to 11 percent. The report further explains that “new pharmacies” accounted for 82 percent of compound drug prescriptions, along with 86 percent of the compound drug prescription payments.
“The findings in this report are almost unfathomable,” said PA Chamber President and CEO Gene Barr. “It was clear from the Philadelphia Inquirer exposé that the system has been manipulated at the expense of employers and in many cases patients because of the use of non-FDA approved creams. But to see the dramatic statewide impact on a program that covers billions of dollars in medical and wage benefits every year is startling and demands attention from lawmakers.”
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