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CWCI Study Analyzes the Impact of California’s Proposed Formulary and Drug List

August 03, 2017 (2 min read)

Oakland - More than 30 percent of the prescription drugs currently dispensed to injured workers in California will be classified as “Exempt Drugs” and will no longer require authorization prior to dispensing under conditions outlined in the Workers’ Compensation Prescription Drug Formulary regulations proposed by the state, according to a new California Workers’ Compensation Institute (CWCI) study. 

The California Division of Workers’ Compensation is putting the final touches on the regulations governing the new formulary mandated by 2015 legislation (AB 1124), which is now scheduled to take effect January 1.  The intent of the formulary is twofold: 1) to improve the quality of care by assuring that the drugs provided to injured workers meet evidence-based medicine standards; and 2) to reduce delays and frictional costs associated with disputes over requests for pharmaceuticals.  The regulations proposed by the state and recently modified following public hearings, include a Formulary Drug List based on the American College of Occupational and Environmental Medicine’s (ACOEM) pharmaceutical formulary.

To analyze the impact of the Formulary on current prescribing patterns and the workers’ comp medical dispute resolution process, CWCI researchers modeled 650,000 prescriptions and other proprietary databases against the terms of the proposed regulations and found:

> Nearly 1/3 (31 percent) of the prescription drugs dispensed to California injured workers in 2016 are on the proposed Exempt Drug list and could be dispensed without pre-authorization;

>.The Formulary should reduce pharmaceutical disputes and the associated costs and delays as 22.5 percent of the drug requests that now go through utilization review and 21.4 percent of those that go through independent medical review involve drugs that are on the proposed Exempt drug list.

> The Formulary exempts 15 “Special-Fill” drugs (allowing a 4-day supply following an injury if prescribed or dispensed at the first medical visit within 7 days) and 14 “Perioperative” drugs that can be dispensed 4 days prior to surgery and up to 4 days after surgery.  Together these drugs account for 2.6 percent of all workers’ compensation prescriptions.

According to the authors, the findings that the proposed Formulary will help assure that drugs provided to injured workers meet evidence-based medicine standards while reducing disputes over prescription drug requests show that the current regulations represent a major step toward achieving the legislative intent of AB 1124.  At the same time, the Formulary opens the door for additional controls that could be used to address the high cost of workers’ compensation pharmaceuticals.

CWCI has issued its analysis in a Spotlight Report, “California’s Workers’ Compensation Formulary Part 2: A Review of the July 2017 Proposed Formulary Drug List of Exempt and Non-Exempt Drugs,” which is available to CWCI members and subscribers in the Research section of the Institute’s website (  Others may purchase the report from the CWCI Store at