Promoting generic drugs could save insurers billions


Although insurers likely reached the so-called "patent cliff" last year, when an unprecedented amount of generic drugs entered the market, many companies still believe they can save more money by continuing to promote generic drugs to their members.

In 2011, for example, doctors prescribed roughly $49 billion in brand-name drugs even though generic options were available, leaving room for insurers to realize substantial savings on drug coverage costs, AIS Health reported.

"While 2012 was a huge year for brand-to-generic savings, there is an estimated $40 billion in drug spend moving to generics in the next three years," Brian Bullock, founder and CEO of The Burchfield Group, told AIS Health. To help promote generics, he recommended insurers implement step therapy programs, create generic-only therapeutic categories and exclude certain brand-name drugs that are product extensions.

Take Excellus Blue Cross Blue Shield, which is aggressively promoting generics by including information on more generic options and alternatives in its member education and outreach activities. The insurer also will update its medical policies and ensure its network doctors know the value of generics, the article noted.

In fact, Excellus predicted cost savings up $460 million to $1 billion per year if its customers use more generic drugs instead of name-brand prescriptions, according to a previous report from the insurer.

Blue Cross Blue Shield of Tennessee, which has a generic dispensing rate (GDR) in the low 80 percent range, helps promote generic drugs to its members through copay differentials, step therapy programs and exclusive generic choices in many of the drug classes, noted AIS Health.

And last year, WellPoint stopped covering the cholesterol-lowering drug, Lipitor, and instead began paying only for generic versions, hoping to compel its members to take the less-expensive generic drug, FierceHealthPayer previously reported.

To learn more:
- read the AIS Health article

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