The Hartford's Annual Study Finds Cost of Drugs in Workers' Compensation Rising at a Lower Rate in 2004, But Newer, Expensive Drugs Continue to Push Up Costs Increased notoriety fails to quell use of Actiq or Neurontin, study shows HARTFORD, Conn., April 18 /PRNewswire-FirstCall/ -- The rate of pharmacy inflation in workers' compensation is moderating for the second straight year, with costs rising by 6 percent in 2004, down from 13 percent in 2003, according to a study by The Hartford Financial Services Group, Inc. (NYSE: HIG). Speaking at a press conference at the Risk & Insurance Management Society (RIMS) conference in Philadelphia today, Robert E. Bonner, MD, MPH, The Hartford's medical director, attributed the improvement to careful pharmacy management, including an extensive review process. Nevertheless, the newly released list of the top 25 drugs prescribed for workers' compensation in 2004, continued to indicate that off-label drug use contributes to rising pharmaceutical costs, Dr. Bonner noted. Off-label drug use is defined as the use of prescription drugs in ways not approved by the U.S. Food and Drug Administration (FDA). Dr. Bonner also noted that despite widespread negative publicity in 2004, several drugs, such as Actiq and Neurontin, continued to be widely used for workers' compensation patients. "Actiq is a powerful painkiller approved by the FDA for cancer patients with breakthrough pain, but it jumped to number nine from 15 in 2003," said Dr. Bonner. "The drug is a narcotic that comes in a lollipop or lozenge form and takes just a few minutes to enter the bloodstream. The FDA is concerned about its potential for diversion and abuse. Actiq's climb up the chart suggests it is being used for a much wider group of patients than those the FDA originally intended." Similarly, the drug Neurontin held steady at number two on the list, despite its owner paying more than $430 million to settle state and federal charges relating to the drug's promotion and marketing to physicians. The FDA approved the drug in 1999 to treat seizures in epilepsy, then approved it in 2002 to treat pain following shingles outbreaks (post-herpetic neuralgia). Even so, the percentage of patients for workers' compensation injuries being treated for either condition is dramatically smaller than the usage of the drug suggests. Meanwhile, Oxycontin, a strong painkiller that gained notoriety several years ago from reports of its popularity for abuse and drug trafficking, continued to top the list for the third year in a row. In 2004, the actual number of claims in which Oxycontin has been prescribed declined by 25 percent. "Drugs to control pain dominate the Top 25 list, and that certainly makes sense for treating many of the injuries workers' sustain on the job, said Dr. Bonner. "Still I worry that a 'newer is better' philosophy may put patients on stronger, riskier drugs when more established medications often have lower risk and cost." COX-2 inhibitors like Celebrex (number three on the list), Vioxx (number seven on the list despite being withdrawn from the market nine months into 2004) and Bextra (number six on the list) were frequently used in place of drugs such as Aspirin and Ibuprofen. Those and other non-steroidal anti- inflammatory drugs may be just as effective as their expensive brand name counterparts. The FDA's recalls and warnings of the newer drugs suggests more changes to come, and early indications in 2005 data show a continued decrease in prescribing patterns for these drugs. While pharmacy costs have doubled as a percentage of workers' costs over the past five years and while injured workers are receiving more drugs and more expensive drugs, data suggests the trend may be abating. The Top 25 list represents 61 percent of all prescription medicine prescribed for workers' compensation, up from 58 percent in 2003. The majority of drugs on the list of the top 25 are painkillers such as Oxycontin, Oxycodone and Duragesic. The list also includes antidepressants such as Zoloft, sleeping pills such as Ambien and muscle relaxers such as Skelaxin. Although costs for prescription drugs continue to rise, The Hartford's pharmaceutical inflation rate is about half that of many workers' compensation insurers. As part of its continuing efforts to manage pharmaceutical costs, The Hartford uses an extensive review process that looks at the drugs that injured workers are taking to determine if they are related to the worker's specific injury. The process also checks for errors in which prescriptions unrelated to a worker's injury are erroneously processed at the pharmacy as workers' compensation prescriptions. Dr. Bonner said that The Hartford and its Specialty Risk Services (SRS) third-party claims administrator together have saved more than $13 million in pharmaceutical costs for clients during the past year through careful monitoring, negotiated prices and other controls. The Hartford is one of the nation's largest financial services and insurance companies, with 2004 revenues of $22.7 billion. The company is a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property-casualty insurance. The Hartford's Internet address is http://www.thehartford.com/. Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2004 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued. Contact(s): Sue Honeyman Victoria Gallant 860-547-4976 860-547-4938 The Hartford's Top 25 Drugs in 2004 Workers' Compensation (Ranked by Total $ Costs) Rank Cost Increase* Drug Name 2004 2003 2002 2004v2003 2003v2002 Oxycontin 1 1 1 2% 15% Neurontin 2 2 3 15% 12% Celebrex 3 3 2 2% 12% Hydrocodone 4 4 5 -2% 2% Duragesic 5 6 6 12% 14% Bextra 6 7 11 4% 33% Vioxx 7 5 4 1% 6% Lidoderm 8 11 22 9% 12% Actiq 9 15 32 15% 55% Skelaxin 10 10 13 30% 29% Ambien 11 9 9 9% 14% Carisoprodol 12 8 7 -12% 8% Tizanidine 13 12 37 -1% 60% Ultracet 14 16 19 6% 23% Effexor 15 20 17 11% 13% Tramadol Hcl 16 14 35 -5% 30% Oxycodone 17 NR NR 131% NR Cyclobenzapr 18 13 12 1% 11% Topamax 19 22 24 8% 22% Naproxen 20 21 16 -7% 17% Morphine Sul 21 23 29 -11% -1% Zoloft 22 24 18 2% 6% Propo-N/Apap 23 19 14 -7% -3% Mobic 24 NR NR 9% NR Endocet 25 NR NR 46% NR All Pharmacy 6% 13% * Change in the average prescription cost in the calendar year for claimants receiving the drug. NR -- Not ranked in the top 25 in the year identified DATASOURCE: The Hartford Financial Services Group, Inc. CONTACT: Sue Honeyman, +1-860-547-4976, , or Victoria Gallant, +1-860-547-4938, , both of The Hartford Web site: http://www.thehartford.com/

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