National Council of Self-Insurers2011 Annual Meeting

Dennis M. Sponer, Esq., CEO ScripNet, Inc.

www.scripnet.com

Overview• Introduction• Narcotics

– Abuse– Diversion

• Solutions– State Solutions– Federal Solutions– Industry Solutions– Payer Solutions

• Conclusion

Narcotics – CWCI Study

• Top 10% of docs that prescribe C-2s in California account for 80% of all workers’ compensation prescriptions for these narcotic drugs

• Nearly HALF of the prescriptions were for minor back injury claims

• 20% of C-2 prescriptions are for Fentanyl – usually DURAGESIC® Patches

Source: www.insurancejournal.com/news/west/2011/04/29/196666.htm

Narcotics – NCCI Study• Narcotics’ share of medication expenses increases as

claims age – from 15% in year 1 to as much as

35% in year 5• The Longer the I/W is on Narcotics – the Longer

they are off WORK• Increased likelihood of

ADDICTION rehabilitation

Source: “Narcotics in Workers Compensation,” NCCI Research Brief, December 2009

Injured Workers - Diversion

Diversion is the use of prescription drugs for recreational purposes. The term comes from "diverting" of the drugs from their original purposes.

Prescription drugs are second only to marijuana in illicit drug use.

Diversion – Scope of the Problem

Drug diversion costs $72.5 billion a year.

Individual plans each lose $8.6 million to $857 million a year.

Large diversion losses affect both traditional health insurers and workers’ compensation insurers.

Source: Coalition Against Insurance Fraud Publication, Prescription for Peril, 2007

Diversion – Commonly Diverted Drugs

Hydrocodone (Vicodin®, Lortab®, and Lorcet®)Oxycodone (OxyContin®)Fentanyl (Duragesic®)ACTIQ® Hydromorphone (Dilaudid®)Meperidine (Demerol®) Morphine (MS Contin®)Pentazocine (Talwin®) Dextropropoxyphene (Darvon®)Methadone (Dolophine®)

ACTIQ® is used to treat breakthrough pain in adult patients with cancer (16 years and older) who are already taking other opioid pain medicines for their constant (around-the-clock) cancer pain.

. . . 90% of ACTIQ® prescriptions are off label.

Diversion – ACTIQ®

Sources: http://www.actiq.com/patients/aboutbtcp/default.asp and http://www.primetherapeutics.com/pdf/Actiq.pdf

Diversion – Commonly Diverted DrugsPrescription tranquilizers and sedatives are also

commonly abused.HyAlprazolam (Xanax®)Diazepam (Valium®)CODEINE Lorazepam (Ativan®)Pentobarbital (Nembutal®)Phenobarbital (Luminal®)Secobarbital (Seconal®)Zolpidem (Ambien®)

Source: DEA Publication, National Prescription Drug Threat Assessment 2009

Diversion – What do Payers Pay?

ACTIQ® 800 mcg AWP $82.68

OxyContin® 80 mg AWP $20.30

Fentanyl 75 mcg AWP $72.40

Prices are average for a 30 day supply.

Commonly Diverted Drugs – Street Prices

DRUG STATE / TERRITORY LOW $ HIGH $ QUANTITY /WEIGHT

Diazepam Connecticut $2.00 $2.00 10 milligrams

Diazepam Maine $2.00 $2.00 10 milligrams

Diazepam Massachusetts $2.00 $2.00 10 milligrams

Diazepam New Hampshire $2.00 $2.00 10 milligrams

Diazepam Vermont $2.00 $2.00 10 milligrams

Valium® Connecticut $3.00 $5.00 10 milligrams

Valium® Maine $3.00 $5.00 10 milligrams

Valium® Massachusetts $3.00 $5.00 10 milligrams

Valium® New Hampshire $3.00 $5.00 10 milligrams

Valium® Vermont $3.00 $5.00 10 milligrams

Codeine Syrup -

$200 - $400 per pint!

Commonly Diverted Drugs – Street Prices

DRUG STATE CITY / COUNTY* LOW $ HIGH $ QUANTITY / WEIGHT

Codeine syrup Texas Houston $200.00 $400.00 1 pint

Codeine syrup Texas Houston $ 20.00 $ 20.00 1 ounce

Codeine syrup Texas Plano $ 10.00 $ 10.00 1 ounce

Codeine syrup Texas $ 35.00 $ 175.00 1 ounce

Codeine syrup Texas $ 20.00 $ 40.00 1 ounce

OxyContin® Texas $ 8.00 $ 35.00 1 dosage unit

OxyContin® Texas $ 25.00 $ 50.00 1 dosage unit

OxyContin® Texas $ 1.00 $ 1.00 1 milligram

Hydrocodone Texas Houston $ 2.00 $ 5.00 1 tablet

Hydrocodone Texas $ 2.00 $ 10.00 1 dosage unit

Hydrocodone Texas $ 1.00 $ 4.00 1 dosage unit

Alprazolam Texas Houston $ 2.00 $ 4.00 1 tablet

Xanax® Texas Houston $ 2.00 $ 5.00 1 tablet

OxyContin® -

$25 - $50 per pill!

Diversion- Popular Culture

“Sippin’ on Some Syrup”

Pimp C was found dead December 4 in a Los Angeles hotel after headlining a few spot tour dates in California with Too Short. He was 33. Pimp C was instrumental in shaping the sound and influence of Southern rap, which dominates hip-hop today. On "Sippin' on Some Syrup," a track for which UGK collaborated with Three 6 Mafia, Pimp C boasted of his affinity for codeine. Cough medicine combined with a number of mixers is a popular beverage in some Southern regions

Diversion - Popular CulturePimp C – Codeine Syrup Overdose

December 4, 2008

Source: MTV.com, December 4, 2008

Solutions? State RulesFederal RulesCriminal

Investigation & Prosecution

Industry SolutionsYour Own Private Army?

State Solutions Texas Closed Formulary Rules– 40% of the top 25 Comp Drugs will Require

Preauth– “N” Drugs are over 25% of Total Comp Drug Spend

Insurance Fraud Bureau of Massachusetts– Mission: to eliminate fraud from the insurance

scene in Massachusetts

Direction of Care Rules - Nevada– Non Network Prescriptions Just Don’t Get Paid!

Federal SolutionsApril 19, 2011, “Epidemic: Responding to America’s Prescription Drug Abuse Crisis” Framework for reducing prescription drug diversion and abuse Expands state-based prescription drug monitoring programsEnhances disposal methodsSupports education for patients and healthcare providersReduces the prevalence of pill mills and doctor shopping Source:http://www.justice.gov/dea/pubs/pressrel/pr041911.html

Criminal Investigation and Prosecution - Florida

Leads the nation in diverted prescription drugs - Attorney General’s top priority

$10,000 fine for doctors Third-degree felony for those who

fraudulently register a pain clinicCriminal penalty for doctors who fail to perform a physical examinationMust report theft of controlled substances

to local law enforcement in 48 hours

Industry Solutions

Nalaxone included – prevent abuseCan’t be Crushed or Dissolved in AlcoholCost is HIGHERExamples– Exalgo™ (hydromorphone extended-release),– Abuse-deterrent Oxycontin® (oxycodone extended-

release) – Embeda™

Your Private Army - Payer Directed Solutions

The Role of the PBM

PreventionFormulariesPoint of Sale Drug Utilization Reviews & Physician Intervention

Recruiting and Credentialing Pharmacies

Auditing Pharmacy Records

Monitoring Pharmacies

Monitoring Prescribers

Identifying Abuse

PBM

Summary

Questions?