SB 306: A Critical Fix for Workers’ Compensation Prescription Costs

Senate Bill 306, sponsored by Senate Finance Committee Chair Senator Pam Beidle, is a necessary reform to Maryland’s workers’ compensation system. The bill addresses a long-standing gap in regulation that has allowed excessive and inconsistent prescription drug pricing, driving up costs for local governments. By implementing a fair and predictable fee guide for pharmaceutical reimbursements, SB 306 ensures transparency and cost savings while maintaining full access to necessary medications for injured workers.

The Problem: Unchecked Prescription Costs Hurt Counties

Maryland’s Workers’ Compensation Commission currently regulates fees for medical services but lacks a similar structure for prescription drugs. Without a standardized fee guide, counties, municipalities, and the State are vulnerable to price gouging, particularly from out-of-network pharmacies and physician-dispensed medications. Some drugs are marked up as high as 77 percent, creating an unsustainable financial burden.

For example, in Prince George’s County alone, workers’ compensation prescription costs reached over $10.2 million in 2023-2024. Under SB 306’s proposed acquisition-cost-based pricing, the cost of the same prescriptions would be approximately $2.56 million, excluding additional dispensing and administrative fees. Including these approximate fees, the county is projected to save around $7 million over a two-year period due to the difference between the current pricing model and the proposed acquisition-cost-based pricing model. Similar patterns are seen across the state, forcing local governments to divert resources away from other essential public services.

How SB 306 Fixes the Issue

SB 306 establishes a pharmaceutical fee guide that regulates prescription drug reimbursements in workers’ compensation claims. The fee guide will be based on:

  • Actual acquisition costs rather than inflated Average Wholesale Prices (AWP), which do not reflect real market transactions.

  • A fair and predictable dispensing fee that ensures pharmacies receive reasonable compensation.

  • Industry-standard pricing models which are already used in programs like Medicaid and in other states such as California and Massachusetts.

By addressing these key issues, SB 306 creates a more sustainable and transparent system that prevents excessive pricing while maintaining fair compensation for pharmacies.

SB 306 Does Not Impact Access to Medication

Some concerns have been raised that SB 306 might restrict access to prescriptions for injured workers. This is not the case.

  • Injured workers will continue to receive the medications they need, with the only change being that the cost is based on actual acquisition pricing rather than artificially inflated figures.

  • Local brick-and-mortar pharmacies will not be negatively affected because most already operate within network agreements, meaning their reimbursement rates remain unchanged.

  • Even with the new fee guide, reimbursement rates will still be higher than Medicaid or Medicare, ensuring pharmacies are fairly compensated.

SB 306 does not disrupt care; it simply prevents price manipulation that drives up costs for counties and taxpayers.

Why Counties Need SB 306 to Pass

Without action, counties will continue to face unpredictable and excessive prescription costs in workers’ compensation claims, diverting funds away from critical services. SB 306 aligns Maryland with best practices already implemented in other states and ensures financial sustainability in the system. This bill can save millions for counties, create a transparent and fair system, and ensure that injured workers receive timely and affordable care. It is a practical solution that benefits local governments, taxpayers, and workers.