Wolf vetoes workers' comp bill, vows crackdown on pain creams, pharmacies

Gov. Wolf on Friday vetoed a controversial bill that called for overhauling Pennsylvania’s workers’ compensation system and had pitted the insurance industry and the chamber of commerce against labor unions and trial attorneys.

The Republican-backed bill, which passed the General Assembly last week, would have created a list of pre-approved drugs permitted to be prescribed under the state’s workers’ compensation program, similar to lists used by Medicaid, Medicare, and private insurers.

Supporters said that would curtail the overprescription of opioids to injured workers, as well as reduce medical costs by cutting off payments for exorbitantly priced compounded pain creams that are not approved by the federal Food and Drug Administration.

But Wolf, a Democrat, said it was too broad and would interfere with the doctor-patient relationship. He described it as a giveaway to insurance companies and corporations disguised as a public safety measure.

“Make no mistake, Senate Bill 936 is not a bill designed to fight the opioid crisis,” he said in a statement Friday. “Senate Bill 936 threatens health care for millions of workers who could be injured on the job, including police, corrections officers, and firefighters, who put their lives on the line every day, and whose injuries can be unique, debilitating and severe.”

The veto comes a day after Wolf announced new regulations to combat opioid abuse within the workers’ comp system and to crackdown on compounding pharmacies.

The Inquirer and Daily News have reported on several Philadelphia-area pharmacies charging upward of $4,000 per tube of the creams. The pharmacies often target workers’ comp patients, whose medical bills are covered by their employer or by the employer’s insurance carrier. The individual ingredients are purchased cheaply, but sold at exorbitant markups once they are mixed together.

Why Are Some Pain Creams So Expensive?

This Pennsylvania Department of Labor & Industry PowerPoint slide describes a hypothetical price escalation of a compounded medication. In the workers’ compensation system, payments are typically capped at 110 percent of the Average Wholesale Price (AWP).

SOURCE: Pa. Dept. of Labor & Industry, Bureau of Workers Compensation

Wolf said Thursday that he would order the Department of Labor & Industry to propose regulations that require the pharmacies to bill insurance companies for the creams at the ingredient level, instead of the “staggeringly high” prices currently charged, his office said.

“My administration is taking these steps to limit overprescribing of opioids to injured workers, limit expensive opioid-based medications, and combat the potential for opioid abuse without rationing health care for millions of workers who could be injured on the job,” the governor said Thursday.

Senate Bill 936 gained traction in Harrisburg following the newspapers’ September investigation into the prescribing patterns of pharmacies owned by workers’ comp lawyers and doctors. Legal and medical ethicists say the arrangements can pose conflicts of interest.

One of the pharmacies, Workers First, was owned by partners at Pond Lehocky Stern Giordano, which describes itself as the largest workers’ comp law firm in the state.

The newspapers reported that one of the law firm’s founding partners, Sam Pond, had sent an email asking doctors to use its pharmacy: “For all patients that you may see with a workers’ compensation claim, referred to you from our office or elsewhere, we ask that you have our pharmacy, Workers First Pharmacy Services, fill the scripts.”

Some of the doctors that sent patients to Workers First also owned a piece of the pharmacy, enabling them to make money from both patient care and the expensive prescriptions.

Abraham Reich, an attorney for Pond Lehocky, said Thursday that the firm’s partners sold their interest in Workers First in November and have had “nothing to do with the pharmacy ever since.”

“We’re not involved,” Reich said.

Wolf, who is running for reelection this year, has received substantial financial support from Pond Lehocky and pharmacy interests, much of it channeled through the Center City-based Fairness PA political action committee, which gave the governor’s campaign $1 million last year. Insurance and business groups were lobbying for the passage of Senate Bill 936.

In January, Wolf issued a disaster declaration that streamlines the state bureaucracy to more effectively fight the opioid crisis and reduce overdose deaths. He renewed it this month.

Thursday’s executive action requires doctors, nurses, employers, and others to form a task force to create prescribing guidelines for injured workers. It also calls for additional training for workers’ comp judges and for providers on the dangers of overprescribing opioids.

House Speaker Mike Turzai, a Republican, had criticized Wolf’s executive action and said he “caved to powerful special interests” with his Friday veto.

“During the debate in both the House and Senate, the governor was nowhere to be found, nor did he weigh in or offer any meaningful solutions to the prescribing abuses occurring in workers’ compensation,” Turzai said in a statement after the veto. “Instead, today he served as a backstop for his wealthy trial attorney friends who apparently profited from the abuses and demand they continue.”