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For many injured workers, medication forms a critical part of managing pain, psychological symptoms, and overall recovery. However, in recent years, the use of certain “high-risk” medications has come under increasing scrutiny within the NSW workers compensation scheme. The State Insurance Regulatory Authority (SIRA) classifies some medications as “high-risk” due to their association with negative health outcomes, dependence, and accidental overdose. As part of its ongoing efforts to ensure safe and effective treatment for injured workers, SIRA has introduced stricter guidelines governing these medications due to concerns about dependence, adverse health outcomes, and long-term recovery impacts. While these changes are aimed at improving safety, they have also made it more difficult for some injured workers to access and continue necessary treatment. Importantly, further reforms are proposed to commence on 1 October 2026 which may significantly restrict access to certain medications under the NSW workers compensation scheme. In particular, the proposed Regulations provide that medicinal cannabis and GLP-1 receptor agonist medications may not be considered ‘reasonably necessary treatment’ for the purposes of workers compensation claims. If implemented, these changes would substantially limit insurers’ liability to fund those treatments, regardless of whether they are prescribed by a treating practitioner.

What are high-risk medications?

SIRA has identified a specific group of medications as high-risk, including:

• Opioids – strong pain-relieving medications that carry a high potential for dependence and overdose.
• Medication-assisted treatment of opioid dependency (MATOD) – treatments involving methadone and buprenorphine, prescribed to manage opioid dependence.
• Injectable narcotics – strong painkillers, including certain formulations of morphine and fentanyl.
• Benzodiazepines and z-drugs – medications primarily used to treat anxiety and sleep disorders, such as diazepam, alprazolam, and zolpidem.
• Medicinal cannabis – used for certain chronic pain conditions, neurological disorders, and other approved indications.

While these medications may be essential for managing pain or mental health conditions resulting from workplace injuries, their risks necessitate careful regulation and oversight.

Will workers compensation cover these medications?

Under the “Medication Management in the NSW Personal Injury Schemes: Better Practice Guide,”  medications must meet specific criteria to be covered by workers compensation:

• The medication must be used to treat a compensable injury sustained in the workplace.
• It must be prescribed by a qualified medical practitioner or dentist registered with AHPRA (Australian Health Practitioner Regulation Agency).
• The medication must be supplied by a registered pharmacist.
• Prescriptions should, where possible, be processed through the Pharmaceutical Benefits Scheme (PBS) unless unavailable or extenuating circumstances justify private prescriptions.

Emerging treatments and case law

The scope of compensable treatment continues to evolve. In Janice-Marie Longworth v Secretary, Department of Transport [2020] NSWWCC 52,the Commission confirmed that medicinal cannabis, could qualify as “medical or related treatment” under the workers compensation scheme. This case set a precedent for the inclusion of alternative therapies when deemed medically necessary.

Additionally, the more recent reclassification of psilocybin and MDMA as controlled substances available for therapeutic use in treating certain psychiatric conditions has implications for their potential inclusion in workers compensation claims. However, their acceptance in mainstream treatment protocols remains in its early stages.

However, the regulatory landscape is continuing to shift. Proposed amendments to the NSW workers compensation Regulations, intended to commence on 1 October 2026, indicate a move toward stricter limitations on compensable pharmaceutical treatment. Relevantly, the proposed Regulations prescribe that medicinal cannabis and GLP-1 receptor agonist medications are not to be regarded as “reasonably necessary treatment” within the workers compensation scheme.

If enacted, these reforms may significantly alter the current position established by earlier Commission decisions recognising medicinal cannabis as potentially compensable treatment. The proposed changes would also create substantial barriers for injured workers seeking approval for these medications, even where recommended by treating specialists.

Approval process for high-risk medications

For a high-risk medication to be covered by workers compensation, insurers must assess whether the treatment is “reasonably necessary” for managing the injury. SIRA outlines several key factors in determining this listed in the guidelines:

• Appropriateness of the treatment – the medication must align with best medical practices and treatment guidelines.
• Availability of alternatives – safer or more effective treatment options should be considered before prescribing high-risk medications.
• Cost considerations – the expense of the treatment must be weighed against its benefits and available alternatives.
• Effectiveness – the medication should have proven efficacy for the specific condition being treated.
• Medical consensus – the treatment should be accepted by the broader medical community as a suitable option for the condition.

Updated guidelines for high-risk medications

In response to growing concerns regarding the misuse, dependence and overprescription of high-risk medications, SIRA introduced updated guidelines to ensure responsible prescribing and monitoring. While these measures are aimed at improving safety, they have also resulted in increased scrutiny of injured workers’ treatment and greater insurer involvement in prescribing decisions.

The proposed 2026 reforms also suggest a broader policy shift toward limiting insurer liability for emerging or higher-cost pharmaceutical treatments. In particular, the proposed exclusion of medicinal cannabis and GLP-1 medications from the definition of reasonably necessary treatment signals increased scrutiny of treatments perceived as novel, long-term, or insufficiently supported by regulatory or clinical consensus.

1. Emphasis on the Pharmaceutical Benefits Scheme (PBS)

Where clinically appropriate and available, high-risk medications should be prescribed through the PBS rather than as private prescriptions. This ensures access to cost-effective medications with regulatory oversight.

2. Additional requirements for private prescriptions

For instances where a high-risk medication is prescribed privately rather than through the PBS, a written clinical rationale from the prescriber must be submitted to the insurer. The rationale should explain why the medication is unavailable through PBS, or why a private prescription is necessary despite PBS availability.

This measure is aimed at discouraging unnecessary private prescriptions and ensuring transparency in prescribing practices.

3. Increased monitoring of high-risk medications

Insurers are now advised to implement medication review processes for high-risk prescriptions. This may involve:

• Regular assessments of medication effectiveness and necessity.
• Reviewing potential dependence or adverse effects.
• Exploring alternative treatment options when appropriate.
• Working with treating doctors to optimise medication plans.

By introducing these measures, SIRA aims to reduce medication-related harms while ensuring injured workers receive appropriate treatment.

Implications for medical practitioners and injured workers

These developments have significant practical consequences.

For medical practitioners – practitioners must ensure that prescribing decisions, particularly for high-risk or private medications, are supported by clear, well-documented clinical reasoning. They may also be required to engage more frequently with insurers and respond to requests for review or justification.

For injured workers – those receiving high-risk medications should be aware that insurers will actively monitor prescriptions. Workers may need to participate in medication reviews and consider alternative treatments if required by their insurer.

The regulation of high-risk medications in NSW’s workers compensation scheme reflects an ongoing attempt to balance effective treatment with patient safety, evidence-based practice, and cost management. SIRA’s guidelines already impose significant oversight in relation to high-risk medications, particularly private prescriptions and long-term prescribing practices.

Proposed reforms commencing on 1 October 2026 may further narrow the availability of certain treatments by excluding medicinal cannabis and GLP-1 medications from compensable treatment altogether. As medical therapies continue to evolve, injured workers, medical practitioners, employers, and insurers will need to remain alert to changing legislative and regulatory requirements, as well as developing Commission authority concerning what constitutes reasonably necessary treatment currently under the scheme and under the expanded “reasonable and necessary” standard that will apply when the proposed reforms commence.

Disclosure and important note: This article is based on our own legal research and thinking. Some of its content has been generated with the assistance of artificial intelligence. The authors have checked and approved this article, including the AI generated content, for publication.

This article was published on 1 May, 2026 by Carroll & O’Dea Lawyers and is based on the relevant state of the law (legislation, regulations and case law) at that date for the jurisdiction in which it is published. Please note this article does not constitute legal advice. If you ever need legal advice or want to discuss a legal problem, please contact us to see if we can help. You can reach us on 1800 631 257 or via the Contact us page on our website. (www.codea.com.au). If you or a loved one has been injured, use our Personal injury Claim Check now (Personal Injury Claim Check – Carroll & O’Dea Lawyers).