Topicals in Workers’ Compensation: Understanding High-Cost Categories
In workers’ compensation, pharmacy spend is often influenced not only by commonly prescribed medications, but also by specific drug categories that carry disproportionately high costs. Topical medications, including patches, gels, and creams, have become a key area of focus due to their growing impact on overall pharmacy spending.
While these therapies can play a role in pain management, their use raises important questions about cost variability, utilization patterns, and clinical effectiveness, making them an important area for ongoing evaluation [1,2].
1. Topicals Can Drive Disproportionate Costs
One of the primary reasons topical medications stand out is their outsized impact on pharmacy spend relative to their volume of use. Research shows that topical medications can represent a significant share of total drug costs, with payment share increasing from approximately 9 percent in 2015 to nearly 19 percent in recent years [1].
Products such as lidocaine patches (Lidoderm®), diclofenac gel (Voltaren®), and topical solutions like Pennsaid® can vary widely in price depending on how they are dispensed and reimbursed. In some cases, relatively low utilization products can contribute disproportionately to total spending due to high per-prescription costs, with certain topical formulations exceeding hundreds or even thousands of dollars per prescription [3].
This variability is often driven by differences in pricing structures across dispensing settings and limited alignment with standard pharmacy pricing controls. As a result, the same or similar medications may be reimbursed at significantly different rates, contributing to cost variability and elevated pharmacy spend across claims [2,3].
2. Utilization Patterns Increase Total Spend
In addition to price variation, how topical medications are used over time plays a critical role in overall cost. Utilization of topical medications has increased steadily over time, in part due to their role as alternatives to oral therapies and their perception as lower risk treatment options [1,2].
Topicals such as lidocaine patches and diclofenac gel are commonly prescribed for ongoing management of musculoskeletal pain, one of the most frequent injury types in workers’ compensation. While appropriate in certain cases, these therapies are often used repeatedly or for extended periods.
Even when individual prescriptions appear reasonable, continued use over time can lead to:
Sustained utilization across the life of a claim
Increased cumulative pharmacy costs
Use patterns that may not always align with treatment guidelines
Research has also shown that prescribing patterns for topical medications can vary widely, with some products being used in ways that are not fully consistent with evidence-based recommendations, particularly in the early stages of treatment or when combined with other therapies [1]. This variability in use can contribute to increased costs without a clear improvement in outcomes.
3. Challenges in Managing Topical Therapy
Managing topical medications can be difficult because they are often used in ways that are less structured and more variable than traditional therapies.
One key challenge is determining the appropriate duration of therapy. Products such as lidocaine patches and diclofenac gel are frequently used for ongoing pain management, but there is often limited clarity around how long these treatments should be continued. Without clearly defined endpoints, therapy may extend beyond the period in which it provides meaningful clinical benefit.
This contributes to the potential for extended or repeated use over time. Because topicals are generally perceived as lower risk, they may be prescribed or refilled more frequently, which can increase total pharmacy spend without a corresponding improvement in recovery [2].
Another challenge is the use of multiple medications with similar mechanisms of action. Topical therapies may include agents such as NSAIDs, anesthetics like lidocaine, or counter irritants, which provide overlapping therapeutic effects. Research has shown that these types of medications may be used in combination or alongside other treatments, making it difficult to determine incremental benefit while increasing overall cost [4].
Together, these factors make it challenging to evaluate effectiveness, manage utilization, and control costs, contributing to ongoing variability in both treatment patterns and pharmacy spend [1,3].
Moving Forward
Topical medications will likely continue to play a role in workers’ compensation care, particularly for localized pain management. However, their growing contribution to pharmacy spend highlights the importance of focusing on appropriate use, cost consistency, and clinical alignment.
Improving visibility into utilization patterns, establishing clearer expectations for duration of therapy, and ensuring alignment with evidence based care can help reduce unnecessary variation while maintaining access to effective treatment options.
When these elements are addressed, stakeholders are better positioned to manage costs while supporting safe and effective recovery.
By Sarah Cirildo
PharmD
For questions, e-mail pharmd@prodigyrx.com
Citations
1. Workers Compensation Research Institute. Topical analgesic use in workers’ compensation. Published August 26, 2021. Accessed May 13, 2026. https://www.wcrinet.org/reports/topical-analgesic-use-in-workers-compensation2. Enlyte. Ask the pharmacist: the role of topical medications in workers’ compensation. Published August 5, 2025. Accessed May 13, 2026. https://www.enlyte.com/insights/article/pharmacy-benefit-management/ask-pharmacist-role-topical-medications-workers3. Healthesystems. Untangling topical drug classes and costs. Published August 30, 2023. Accessed May 13, 2026. https://healthesystems.com/blog/untangling-topical-drug-classes-and-costs/4. Preferred Medical. Topical analgesics in workers’ compensation: balancing cost and care. Published December 17, 2024. Accessed May 13, 2026. https://www.thepreferredmedical.com/topical-analgesics-in-workers-compensation-balancing-cost-and-care/