Vanderbilt Medical Group is promoting awareness of generics as alternatives to branded drugs.
Photo by Anne Rayner
Awareness efforts focus on cost benefits, efficacy of generics
When doctors prescribe generics instead of more expensive branded drugs, patients and health care payers save money.
Hoping for more of these savings, some payers have begun giving doctors incentives to prescribe generic alternatives to beneficiaries.
BlueCross BlueShield of Tennessee recently promised across-the-board fee raises to Vanderbilt Medical Group in 2007 if VMG prescribers increase use of generics this year.
“At Vanderbilt, we will always use branded drugs more often than the average practitioner,” said Gordon Bernard, M.D., chair of the Pharmacy and Therapeutics committee, citing Vanderbilt's status as a referral center where patients' problems are often out of the ordinary and call for the newest therapies. “We'll never meet the state average for use of generics, but we can do better than we are.”
The incentive from BlueCross is prompting VMG to promote awareness among its clinicians and their patients about the efficacy and cost benefits of generic drugs. VMG has launched a review of medical evidence about specific generic alternatives and will communicate findings to its physicians and other prescribers on an ongoing basis. A poster campaign for Vanderbilt clinics is in the works. And BlueCross patients who get branded drugs from Vanderbilt pharmacies will receive notes with their medications, suggesting that they ask their doctor about generic alternatives.
Drug patents run 17 years. After a patent expires, the generic version of the drug offered by a competing company provides the identical compound found in the branded drug, and doctors and patients usually find it quite simple to make the choice between two price ranges for the same drug.
However, switching to generic alternatives more commonly means deciding between a branded drug that's still under patent and a different drug, within the same class, that has become available as a generic. Facing competing claims from manufacturers, doctors and patients must rely on both medical evidence and individual experience when selecting generics. Decisions are further complicated by the fact that not all patients respond the same way to the same drugs.
Referring to claims data, BlueCross representatives have told Vanderbilt executives that, for health care consumers in general across the United States, 60 percent reliance on generics appears to be the current optimum rate.
During 2005, when BlueCross members filled prescriptions written by VMG providers, they received generics 47 percent of the time.
Incentives from BlueCross (payable in 2007) will kick in when VMG 2006 generics prescribing to BlueCross members reaches 53.5 percent, and will top out when 2006 generics prescribing to these patients reaches 55.5 percent.
“Wherever the numbers land is where they land,” Bernard said. “We won't be mandating any changes. We're going to notify physicians about clinical evidence and costs associated with certain generics. But we're not anticipating reaching 60 percent for generics prescribing.
“There is a cost associated with physicians taking the time and trouble to know when generics are available and in which settings a switch would be appropriate,” Bernard added. “There is also the time and effort required to explain to the patient just what is happening and to answer questions. Until now, this extra effort was uncompensated and worked as a disincentive for physicians. BlueCross is trying to rectify this situation.”
Patients stand to save money. Beneficiaries of Vanderbilt University health plans, for example, save 50 percent or more on co-payments when they receive a generic drug.
Employers stand to save. Vanderbilt is an example of large employers who self-insure for health benefits, turning over health plan management to various insurance companies but retaining primary financial risk for covered benefits. Vanderbilt spends about $1.6 million per month on prescription costs for beneficiaries. According to Richard Lachiver, M.D., medical director of health plans and wellness programs, Vanderbilt beneficiaries in January received generics 52 percent of the time. Lachiver estimates that the University could save around $865,000 this calendar year if use of generics by beneficiaries could be gradually increased to 56 percent by October.
Vanderbilt, through its pharmacy benefits manager (Caremark), occasionally reminds beneficiaries that they can save money by using generics, and Lachiver says this communication might get stepped up.