WCMSA RX update – FDA approves first generics of Lyrica

August 1, 2019 / 3 min read

In a July 22, 2019 news release, the Food and Drug Administration (FDA) announced that it has approved the first generics of Lyrica. This announcement comes at a critical time as the Centers for Medicare and Medicaid Services (CMS) has increasingly been including Lyrica in Workers’ Compensation Medicare Set-Asides (WCMSAs). Thus, the availability of generic forms of Lyrica could have a significant impact in reducing Workers’ Compensation Medicare Set-Asides (WCMSAs) going forward.

Lyrica - Highlights

The generic form of Lyrica is pregabalin. As noted in the FDA press release, this medication is used for the management of neuropathic pain associated with diabetic peripheral neuropathy, for the management of postherpetic neuralgia, as an adjunctive therapy for the treatment of partial onset seizures in patients 17 years of age and older, for the management of fibromyalgia, and for the management of neuropathic pain associated with spinal cord injury.

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Per the FDA’s announcement, it has granted approvals for the generic versions of Lyrica to Alembic Pharmaceuticals, Alkem Laboratories, Amneal Pharmaceuticals, Dr. Reddy’s Laboratories, InvaGen Pharmaceuticals, MSN Laboratories Ltd., Rising Pharmaceuticals, Inc., Sciegen Pharmaceuticals Inc., and Teva Pharmaceuticals.

WCMSA Impact

By way of background, prior to 2018, Lyrica was generally excluded from WCMSAs as an “off-label” medication and was only priced when it was utilized for an FDA indicated use or supported for inclusion in the approved compendia - which was limited. As a result, the cost of Lyrica rarely factored directly into the WCMSA amount and was usually addressed separately by the parties. However, this changed in early 2018, when CMS unexpectedly changed its policy and handling of Lyrica which has resulted in much higher than anticipated costs in CMS approvals. While CMS started to include Lyrica in 2018, it was not until January 2019 when it officially updated the off-label coverage language in its WCMSA reference guide to expand the inclusion of Lyrica in WCMSAs.

The recent release of pregabalin now has the potential to significantly reduce Lyrica costs in WCMSAs. In this regard, when determining whether to price pregabalin versus Lyrica in a WCMSA, CMS will review the physician recommendations and the prescription pay history to determine whether a claimant is taking a brand or generic product. If a generic medication is currently filled by the claimant, CMS will generally price the generic version in the WCMSA.

Based on current Redbook Average Whole Sale (AWP) pricing, pregabalin now results in significant savings over Lyrica and the generic prices may further reduce in the upcoming months as additional options for pregabalin become more available. We usually see price stabilization in approximately 3–4 months and ISO CP will continue to monitor the pricing and any further developments. As of the date of this article, the Lyrica CR (TER) formulation prices are not affected by generics. As a result, depending on the claim, timing may be a factor for optimizing savings.

In light of this change, workers’ compensation claims payers may want to consider reviewing their claims to identify where Lyrica is utilized by the claimant and to see if there are opportunities to substitute pregabalin as an alternative.

How ISO Claims Partners can help

ISO Claims Partners is the leader in helping WC claims payers identify WCMSA cost mitigation opportunities (including RX reduction) and deploying strategies to reduce WCMSA allocation amounts – and we stand ready to help you capitalize on this important change regarding Lyrica.

To learn more about how we can help, please contact Mark Popolizio at mpopolizio@verisk.com, or Sid Wong at swong@verisk.com.