California Begins Closed Formulary Discovery Process

by Helios | Mar 09, 2015
On February 27, California Assembly Member Henry Perea introduced AB 1124, officially engaging the California legislature in the closed formulary discussion.  The bill, as currently drafted, contains a single line of text that if passed, would require the Division of Workers’ Compensation (DWC) administrative director to adopt a closed formulary.  We appreciate Assembly Member Perea bringing this important issue forward for public discussion.

Closed formulary legislation continues to be a prevalent topic of legislative and regulatory discussion. We acknowledge the documented success of the Texas closed formulary in reducing the frequency and cost of the restricted drugs, or “N” drugs, in their system. However, it should also be acknowledged that the legislation has resulted in some unintended consequences. Data shows that unrelated medications, medications outside of treatment guidelines, and expensive compounded medications are processing within the confines of the Texas closed formulary, thus adding unnecessary cost, and potentially risk, to the system.  

Helios supports efforts to empower the DWC to explore a closed formulary solution, while giving them the flexibility to analyze the best options to help meet the needs of injured workers and employers in California. Allowing this flexibility will provide a forum for discussion on the various closed formulary models currently in place, while also advancing potential innovations or other enhancements that could help reduce the incidence of prescribing opioids and other problematic medications in the workers’ compensation system in California. A thoughtful development process is not only prudent; it will also allow stakeholders and the DWC to evaluate best practices for managing all medications in a closed formulary environment.  

We have long advocated for stronger controls on the prescribing of opioids and other medications that have proven to be problematic in the treatment of injured workers. As the development of a closed formulary advances in California, we encourage policymakers and stakeholders to be mindful of the valuable role pharmacy benefit managers play in encouraging adherence to a formulary and treatment guidelines, as well as providing clinical tools and expertise  that ensure injured workers receive the safest, most efficacious, and cost-effective medication therapy. A closed formulary that fully integrates the tools of a PBM will help ensure the right medications are provided to an injured worker at the right time, while minimizing potential risk or unnecessary medication costs.

Our government affairs team encourages our customers and other stakeholders to engage in the closed formulary discussion in California as AB 1124 begins its journey through the legislative process.

For further information on AB 1124, or other workers’ compensation legislative issues around the country, please feel free to contact Brian Allen, vice president of government affairs at or 801-417-6374, or your account manager.