Consumers, their employers and commercial health plans could have saved more than $20 billion last year through increased use of generic drugs, according to a report being released Tuesday by Express Scripts Inc., a pharmacy benefit manager.
The study examined six major classes of drugs including antidepressants and cholesterol-lowering medications and was based on a sample of roughly 3 million Express Scripts commercial members. Government programs such as Medicaid, the health plan for the poor, were not included in the study.
Express Scripts estimates that unless more action is taken to increase generic use, $24 billion will be lost this year and $25 billion in 2006. It said that on average a generic drug costs about $60 less per month than a brand name medicine. Consumers also pay lower co-payments for generics, saving $10 or more per prescription.
Pharmacy benefit managers administer drug plans and organize the purchase, dispensing and reimbursement of medicines for health insurers or other large purchasers of health care such as employers and unions. Express Scripts earns more money from its clients if it lowers their drug costs.
“We promote generics only when their use is clinically appropriate,” Express Scripts said in a statement. “Our mission is to make the use of prescription drugs safer and more affordable. Generic drugs, because they are tried and true and less expensive, help us fulfill both the safety and affordability parts of this mission.”
As health care costs have continued to rise, health plans have been giving consumers inducements to use generic drugs through offering lower co-payments on such medicines. That has increased the use of generic drugs — about 50 percent of prescriptions dispensed now are for non-brand products — but Express Scripts believes more can be done to save money.
Dr. Steve Miller, Express Scripts Vice President of Research, said that many people still do not feel comfortable asking their doctor about generic alternatives to brand name drugs.
“Patients need to be empowered to ask the question,” Miller said.
Miller added that drug advertisements reinforce a brand’s name and image to the consumer. He also noted that doctors have no incentive to write generic drug prescriptions, especially when they receive samples and other perks from pharmaceutical companies.
The most dramatic savings potential is for generic gastrointestinal drugs, which treat problems like acid reflux disease, where costs could fall $5.4 billion nationally. The study found that generic gastrointestinal drugs are only dispensed 31 percent of the time, but a generic alternative would be appropriate in 95 percent of cases.
Miller said patients only need newer, stronger branded products like AstraZeneca’s PLC Nexium 5 percent of the time. AstraZeneca spokeswoman Cynthia Callaghan said price should not be the deciding factor in choosing a treatment.
“We really intend that patents and doctors work together to determine the best treatment,” Callaghan said.