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Alaska Workers Comp Slams High Priced Brand Name Drugs


Alaska Body Slams Non-Generic Drugs

The State of Alaska body puts an end to the very expensive brand name drugs . My hat is off to Alaska’s Workers Compensation system. A bill was recently pass that REQUIRES generic drugs in all Workers Compensation cases. This very smart political move will save the employers in AK millions every year.

Map Of Alaska Body Slams High Priced Brand Graphic

According to the NCCI (National Council on Compensation Insurance), Alaska saw a sharp increase in how much of Workers Comp claims were due to medical costs. In 1988, medical costs were 48% of claims. That figure has increased to 58% by 2008. Of course, who bears the brunt of these increases – the employers paying in Workers Compensation premiums.

One of the interesting parts of the rule is the employee can still have the name brand drug. The insurance carrier or TPA will have to reimburse the employee or pharmacy for the generic version. The employee will be required to make up the difference.

There has been a debate on whether generic drugs actually are as effective as brand name medications. The following is from Ask The Pharmacist at drugstore.com.

When scientists develop a new drug, they give it a generic name reflecting its chemical makeup. Once the Food and Drug Administration (FDA) approves the drug, the manufacturer markets it with a brand or trade name, which is usually shorter and easier to remember. A drug company can hold exclusive patent rights to make a drug for 20 years after its discovery. After that, other companies can start making generic versions of the drug.

Are generic drugs safe?

Scientist of alaska making medicines
Wikimedia Commons – Heidelberger Life-Science Lab

In almost all cases, generics work as well as their brand-name siblings, and often cost considerably less. This is possible not because of lower quality, but because research and advertising costs are much less for generics. Many insurance plans encourage you to accept the generic version of a drug whenever it’s medically safe. Most states let pharmacists substitute a generic when appropriate and when your doctor approves it. Our pharmacy is located in New Jersey, so we only substitute generic drugs approved under New Jersey law.

When shouldn’t generics be substituted for brand-name drugs?

Very few drugs have a “narrow therapeutic index,” meaning that a small variation in dose can cause problems, such as too little effectiveness or too many side effects. With some drugs, including phenytoin (brand name Dilantin), carbamazepine (Tegretol), valproic acid (Depakene), divalproex sodium (Depakote), digoxin (Lanoxin), warfarin (Coumadin), lithium (Lithobid, Eskalith), levothyroxine (Synthroid, Levoxyl), and theophylline (Theo-Dur), you shouldn’t switch from brand to generic—or vice versa—without your doctor’s approval and close supervision. Always talk to your doctor, pharmacist, or both before asking for a substitute.

The above passages may be a great thing to print out and give to any employee that is insisting on brand name medications. The Google search can be found at http://www.google.com/search?hl=en&safe=off&q=generic+versus+brand+name+drugs&aq=0&aqi=g8&aql=&oq=generic+versus+&gs_rfai=

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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