Encouraging the Use of Generic Drugs

Greater use of generic drugs is one of the keys to reducing health care costs. Required by the FDA to deliver the same amount of medication in the same time as their brand-name counterparts, generics cost from 50% to 70% less.

Such savings are why every 2% increase in the generic dispensing rate allows your company to reduce its prescription drug plan costs by 1%.

So how do you convince your employees to choose generic — an ever-more important choice over the next three years as $30 billion in brand-name drugs go off-patent?

A recent study by ReedHaldyMcIntosh for Medco Health Solutions offers some insight into consumer choice. The national survey of 1,000 adults found that the percentage of those who considered themselves knowledgeable about generics has nearly doubled in the last five years.

But consumers still believe brand names are better than generics for more serious conditions even when there is no difference between the medications. The percentage who said they would use generics and the conditions:

• Cold or flu, 79%
• Heartburn, 76%
• Asthma, 56%
• Diabetes, 52%
• Heart disease, 47%

In a finding demonstrating the success of millions of direct-to-consumer advertising, 59 percent of adults said they would select the brand-name over a generic equivalent if their co-payment was the same. They only opt for the generic when the co-pay for the brand-name drug costs more.

The findings suggest the need for more information, particularly about the safety and availability of generics for serious health problems. A few examples: two doses of Warfarin Sodium, the generic equivalent for Coumadin — popularly prescribed to prevent blood clots — costs $34.80 less a month. Nifedipine, the generic for Procardia XL, a calcium-channel blocker used to reduce blood pressure and ward off heart attacks, costs about $80.10 less a month.

The Generic Drugs—Unadvertised Brand campaign of the Michigan Blue Cross/Blue Shield demonstrates the power of a high-profile campaign promoting the safety, effectiveness and savings of generic drugs to doctors, pharmacies, employers, employees and the general public. Since 2001, the program has increased generic use by 4.3 percent, reduced overall drug expenses by more than $97 million and saved members $11 million in co-pays and other costs.

Use the calculator at theunadvertisedbrand.com to determine generic savings over popular brands or visit fda.gov for other information about generic drugs.

Source: Medco Health Solutions, 2004 Drug Trend Report