Large Health Care Savings Found from More Aggressive Generic Drug Policy

A study of government health care data  recently published in The Journal of the American Medical Association found that a nearly 10% reduction in prescription drugs costs would have been achieved by instituting a more aggressive plan to encourage generic drug substitution.

One way to make prescribing more efficient is to order less expensive generic drugs to take the place of brand name medications. For example, instead of prescribing AstraZeneca's Crestor, a statin drug for lowering high cholesterol, doctors might prescribe rosuvastatin, which is the less expensive generic form of Crestor.

Another, less widely accepted approach is known as therapeutic substitution. With therapeutic substitution, the patient would still receive a statin drug, but maybe not the same one he was taking before. He might receive atorvastatin, for example, which is the generic form of Pfizer's Lipitor. Or he might receive simvastatin, the generic form of Merck's Zocor. The patient would receive the least expensive drug in the same class of medications.

In the example above, rosuvastatin and Crestor are “chemical equivalent” because they contain the same ingredients. Many health plans at CWA employers currently have provisions to encourage patients to switch to the chemically equivalent generic alternative.

“Therapeutic equivalent” drugs have different ingredients but are designed to treat the same condition. Therapeutic equivalent generics are available for newer brand drugs with patents that protect the drug manufacturer from chemically equivalent generic competition. Health plans save money when patient replace these newer, more expensive drugs with lower cost generics.

The study found that therapeutic substitution saved participants money as well, showing a 14% decrease in out-of-pocket costs.

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Inefficient prescribing costs billions of healthcare dollars (Reuters, May 9, 2016)