After several years of research, debate and planning, the Pharmaceutical Drug Formulary went live in the California workers’ compensation system on January 1, 2018. At WCI’s 2018 Workers’ Compensation Educational Conference, California Workers’ Compensation Institute (CWCI) President, Alex Swedlow, presented the consequences of adoption that other states might consider in developing their own formulary.
The Legislative intent of California’s formulary was threefold – to improve quality of care, reduce pharmacy costs and reduce friction costs. The formulary slots drugs into exempt (drugs that do not require authorization through utilization review), non-exempt (require utilization review) and not listed (require utilization review and endorsement). CWCI performed a pre-formulary analysis and found that 31% of prescriptions and 19% of payments fell into the exempt classification, which would cut costs by eliminating the utilization review.
Early returns on the formulary show positive changes:
- 8.5% drop in pharmaceutical utilization review.
- There was virtually no change in the kind of drugs that were being approved and dispensed.
- There was an 18% drop in challenges of exempt drugs.
- Co-prescriptions dropped by 11%
- The was little to no changes in the amount of independent medical reviews.
The state has established an independent committee to make recommendations on future changes to the formulary, which is expected to propose additional cost-saving measures.