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4th of February 2012

Skyrocketing price of pharmaceuticals damaging US captives

22/02/2010

Unfair pricing of prescription drugs is currently doing untold damage to US captive portfolios.

According to Marc Lapointe, senior vice president of USA Risk Group, improper pricing of prescription drugs between third party administrators (TPAs) and pharmaceutical benefit managers is drastically pushing up the cost of worker’s comp claims.

“The TPAs are handling the business but if take a hard look at what is going on, the cost of prescription drugs – the fastest growing component of a work comp claims – is skyrocketing,” said Lapointe.

A lack of differentiation between the pharmaceutical component and other types worker’s comp claims has exposed captive portfolios to damage that is currently going unmonitored, Lapointe explained.

“Nobody is even providing a loss run outlining what the cost or impact is on the programme,” he said. “There is probably a 10-20% loss ratio that could be avoided by eliminating the unfair pricing but people barely know where the loss is coming from.”

Tags: Pharmaceuticals, US captives, Worker's comp

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