Doctor-Dispensed Drug Prices Still Higher Than Pharmacies, Study Finds

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Connecticut patients who pick up a prescription for Percocet at their local pharmacy pay an average of 58 cents a pill. But the same pill, dispensed by a physician, costs more than double that price.

That price disparity between drugs dispensed at pharmacies and those dispensed by doctors has narrowed since 2012, when price restrictions were enacted in the state. But a cost gap remains, according to a new study from the Workers Compensation Research Institute (WCRI).

pillsThe study found that physician-dispensed drug prices in Connecticut have dropped about 30 percent since 2012, when the state adjusted its fee schedule to limit the reimbursement for physician-dispensed drugs. Connecticut is one of 18 states that have made changes to reimbursement rules in the past decade, motivated by concerns about the higher costs of physician-dispensed prescriptions.

The WRCI study, which looked at medical claims in the state workers’ compensation system, found that physician dispensing had declined slightly overall since the Connecticut reforms were enacted. And the average price per pill paid to physicians for most common drugs decreased by 20 to 67 percent in the two quarters after the reform. For seven of the top nine drugs, the average price decreased by 28 to 49 percent.

But despite those reductions, the average prices paid for most of the common physician-dispensed drugs still remained 30 to 74 percent higher in 2013 than the prices paid to pharmacies. The study cites several reasons for the price differentials, including that pharmacies may charge less because they have contracts to purchase drugs at below-wholesale prices.

Proponents of doctor dispensing of so-called “repackaged drugs” argue that in addition to increased revenue for physicians, the practice enhances the quality of patient care by ensuring medication compliance and providing convenient access. Opponents, meanwhile, point to increased risks to patients when medications are not processed through a pharmacy network.

WCRI Executive Director Richard Victor said in a statement that the new regulations do not appear to have discouraged Connecticut doctors from continuing to dispense the drugs, at slightly lower prices.

Prescriptions for some common drugs with over-the-counter strengths, such as acetaminophen 500 milligrams (Tylenol) and omeprazole 20 milligrams (Prilosec), were commonly dispensed by physicians in the state, the study found. The prices paid for those over-the-counter drugs remain higher when dispensed at a physician’s office than at a local pharmacy without a prescription.

Connecticut’s revised Official Practitioner Fee Schedule limits the reimbursement for physician-dispensed drugs to the AWP of the original drug product or the therapeutically-equivalent product when a repackaged drug is dispensed.

The full study is available here.



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