Free generics to reduce single-source brand drug use
I really like the idea of a 3-month waiver at the beginning of the benefit year. This avoids having to give away patient pay forever. It also creates an incentive for patients that will like be plan members for the full year.
Independence Blue Cross Waives Copayments for Generic Drugs Through March 31, 2007
From PR Newswire Europe (inc. UK Disclose) (January 4, 2007)
PHILADELPHIA, Jan. 4 /PRNewswire/ — Most Independence Blue Cross members will pay nothing for new prescriptions or refills for covered generics filled at participating retail pharmacies or by mail order from January 1 through March 31, 2007. The goal of the promotion, called No Pay Copay, is to help members understand how the appropriate long-term use of generics can save them money while providing the same health benefits as brand name drugs. No Pay Copay is the first promotion of its kind in the Philadelphia region.
"Prescription drugs continue to be among the fastest rising costs for our employer customers and our members. That is why we are focusing on ways to reduce the rate of increase of medical costs as part of our overall strategy to provide access to high-quality, affordable care," said Joseph A. Frick, president and CEO of Independence Blue Cross. "Our No Pay Copay program provides immediate savings relief by lowering out-of-pocket costs for members, helping them afford the medications they need, and educating them that generics can be safe, effective and less expensive alternatives to brand name drugs.
"We anticipate that this innovative program will encourage our members who take brand name drugs to talk to their physicians about switching to less expensive generics," said Frick. "We believe once people make the change to generics, they will keep using them and lower their long-term drug expenses."
During the first quarter of 2007, copayments or coinsurance will automatically be waived when an eligible Independence Blue Cross (IBC) member who has IBC drug coverage presents a generic drug prescription and member ID card at one of the approximately 56,000 participating IBC network pharmacies. Copays or coinsurance for members who already take generic medications or who switch to generics will also be waived until March 31. For IBC members, the average monthly out-of-pocket savings for switching from a brand drug to an appropriate generic is $5 to $40, depending on the member's plan. However, during the No Pay Copay promotional period, members will pay nothing for generic prescriptions, saving even more.
Prescription drug costs are one of the fastest growing components of U.S. health care expenditures, accounting for $188.5 billion in 2004, according to a June 2006 report from the Kaiser Family Foundation. Last year, generics became available for several blockbuster drugs whose patents expired, including those for treating high cholesterol, insomnia, depression, and digestive disorders, and additional generics are expected in 2007.
"Generic drugs provide the same therapeutic benefits as their brand name counterparts and meet the same rigorous health and safety standards set by the U.S. Food and Drug Administration (FDA)," said Dr. I. Steven Udvarhelyi, IBC's senior vice president and chief medical officer. "We will continue to cover a broad array of FDA-approved brand and generic drugs so our members have lots of choice through our drug benefit.
"However, because brand name drugs are significantly more expensive than generic alternatives, our list of approved drugs - or formulary - reflects this difference so that members pay more in copays and coinsurance for brand drugs than for generics," said Udvarhelyi. "We want to provide an incentive for our members to use generics when appropriate."
In addition, as part of a broader approach to managing prescription drug benefits announced in October http://www.ibx.com/news_events/press_releases/2006/2006_10_02.html, IBC will update its formulary quarterly, rather than twice a year, so members, physicians and pharmacists are notified sooner when a less costly generic drug is available.
Generics: Safe, cost-effective alternatives to brand drugs
Indistinguishable in composition and quality to their brand name counterparts, generic drugs may be used interchangeably with brand name drugs to treat the identical health conditions. Generics, however, have significantly lower development and marketing costs than brand drugs and, as a result, often cost a fraction of their brand name equivalents. According to the Congressional Budget Office, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies with no sacrifice in quality or effectiveness.
A pharmacist may dispense a generic equivalent for drugs that have both a brand and generic version available, unless a physician has prescribed a specific brand name drug to be dispensed as written. A member who wants to try a generic can ask his or her doctor to consider writing a prescription for a drug with a generic equivalent, when appropriate. However, some drugs within a therapeutic class (for example, cholesterol lowering drugs) do not have a generic equivalent.
Most members with IBC pharmacy benefits are eligible for the generic copay/coinsurance waiver. Not eligible for this program are members with Medicare Part D drug plans or integrated prescription drug coverage such as Major Medical, Comprehensive Major Medical (CMM) and Personal Choice(R) HSA- Qualified, and Keystone Health Plan East HMO members who belong to the Federal Employee Health Benefits Program.
Members can get more information about generic drugs by visiting IBC's website at: http://www.ibx.com/health_plans/supplemental/prescription_drug/generic_drugs.h tml.
Mail-Service and Retail 90
- May not generate the savings (Cost Estimator) promised.
Lower patient pay to increase compliance?
The following studies makes a lot of assumptions related to their cost savings estimates, most notably whether patients will actually take these drugs for more than a year. The Pitney Bowes evaluation did find savings using actual claims data.
Before lowering patient pay to increase compliance, consider use of services that monitor and notify physicians about compliance and persistency issues. My experience with these services suggests that 10% of patients exhibit poor compliance, but these services result in adequate compliance for 30% of these patients. Even though drug utilization increases by 3% compared to clients not using the service, the hospitalization rate decreases by more than 10%.
These services cost much less than the client cost of lower patient pay, have a greater impact, plus provide interventions related to a broad range of other quality issues.
Insurers Could Reduce Costs, Prevent Heart Attacks
January 9, 2007
Health insurers could prevent 4,736 deaths per year from heart-related problems and save $2.5 billion annually in related costs if they fully covered heart medications for patients who have had a heart attack, according to a study published in Health Affairs, the AP/Los Angeles Times reports. Heart medications and cholesterol-lowering drugs can reduce the risk of death from heart disease by an estimated 80%, although they often are underused.
In the study, researchers from Harvard Medical School found that providing full coverage for the medications would cost insurers an average of $550 per patient but would lead to fewer heart attacks, strokes and deaths, saving $1,731 per heart-related event.
The researchers also found that patients would be more compliant with their medication regimens if insurers fully covered the medications rather than requiring the patient to assume a share of the cost. Researchers conservatively estimated that full coverage of cardiac drugs would increase compliance rates from 50% to 63% (Freking, AP/Los Angeles Times, 1/8).
