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Research on Savings from Generic Drug Use

March 09, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: US Government Accountability Office, January 31 2012

What GAO Found

Our review identified articles that used varying approaches to estimate the savings associated with generic drug use in the United States. One group of studies estimated the savings in reduced drug costs that have accrued from the use of generics. For example, a series of studies estimated the total savings that have accrued to the U.S. health care system from substituting generic drugs for their brand-name counterparts, and found that from 1999 through 2010 doing so saved more than $1 trillion. A second group of studies estimated the potential to save more on drugs through greater use of generics. For example, one study assessed the potential for additional savings within the Medicare Part D program—which provides outpatient prescription drug coverage for Medicare—and found that if generic drugs had always been substituted for the brand-name drugs studied, about $900 million would have been saved in 2007. A third group of studies estimated the effect on health care costs of using generic versions of certain types of drugs where questions had generally been raised about whether substituting generic drugs for brand-name drugs was medically appropriate. Unlike the other two groups which focused on savings on drugs only, these studies compared savings from the lower cost of generic drugs to other health care costs that could accrue from their use, such as increased hospitalizations. The studies had mixed results regarding the effect of using these generics in that some found they raised health care costs, while others found they led to cost savings.

Why GAO Did This Study

Prescription drug spending in the United States reached $307 billion in 2010—an increase of $135 billion since 2001—and comprised approximately 12 percent of all health care spending in the country. Until the early 2000s, drug spending was one of the fastest growing components of health care spending. However, since that time, the rate of increase has generally declined each year, attributable in part to the greater use of generic drugs, which are copies of approved brand-name drugs. Generic versions of brand-name drugs become available to consumers when brand-name drugs’ patents and periods of market exclusivity expire and generic manufacturers obtain approval to market their drug. The competition that brand-name drugs face from generic equivalents is associated with lower overall drug prices, particularly as the number of generic manufacturers grows and price competition among them increases. On average, the retail price of a generic drug is 75 percent lower than the retail price of a brand-name drug.

Increased use of generic drugs can partly be attributed to the regulatory framework that was established in the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act. The Hatch-Waxman Act facilitated earlier, and less costly, market entry of generic drugs, while protecting the patent rights of brand-name drug manufacturers, to encourage continued investment in research and development. When the act was enacted in 1984, the generic utilization rate—which is the share of all drugs dispensed that are generic—was about 19 percent. Today it is about 78 percent for drugs dispensed in retail settings, such as independent, chain, and mail-order pharmacies, as well as in long-term care facilitates. The generic utilization rate is expected to continue to grow over the next few years as a number of blockbuster drugs come off patent through 2015.

While the Hatch-Waxman Act has helped to increase the number of generic alternatives to brand-name drugs, other factors influence whether providers and consumers use generic drugs. For example, third-party payers—including private health insurance plans and public programs such as Medicare— use strategies such as tiered copayments to encourage the use of less expensive drugs within a therapeutic class, which are often generics. Also, perceptions of the safety and efficacy of generic drugs may affect their use. Thus, use of generic drugs—and the savings realized—can vary by payer as well as across therapeutic classes. You asked us to identify research completed on estimates of cost savings from the use of generic drugs in the United States. This report summarizes the findings of peer-reviewed articles, government reports, and studies by national organizations, including trade and nonprofit organizations, on this topic.

For a complete copy of the GAO report, visit: www.gao.gov/assets/590/588064.pdf

Medtipster Sees Growth In Generic Drug Switches With Co-pay Waivers

December 14, 2010 By: Nadia Category: Free Prescriptions, HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Medtipster Client Data: August 1, 2009 – November 30, 2010

Medtipster.com, working with it’s employer sponsored benefit plan members, found that offering a waiver of generic drug co-payments led to more switches to generics from their brand equivalents and that plan members were more likely to remain on their generic drugs after the switch was made.

The waiver program resulted in savings of about $500,000. to the sponsor and about $750,000. to the plan members during the observation period.

To improve generic dispensing rates, Medtipster offered plan members using brand medications in 40 therapeutic classes up to two co-pay waivers if they switched to a preferred generic drug. Information about the waiver was mailed to plan members, alerting them that all they needed to do was switch within six months of receiving the communication.

Members who took advantage of the waivers early in the six-month period were able to use it twice, while members who acted later in the window were only able to use the waiver once.

The recently enacted health care reform law has a provision in it that will allow Medicare Part D plan sponsors, beginning with the 2011 plan year, to reduce or waive the first co-pay for a generic drug when a plan member switches from its corresponding brand product.

Medtipster examined how many of the plan members remained on the generic drug after receiving one or two co-pay waivers. Findings among the top four therapeutic classes (HMG CoA reductase inhibitors, antihypertensive combinations, proton pump inhibitors and beta blockers cardio-selective) showed that plan members who took advantage of two co-pay waivers had higher generic dispensing rates in the fill immediately after the waivers and had higher sustained GDRs during the months after the generic dispensing conversion program began compared to those only using one waiver.

For example, 94.9 percent of members using beta blockers filled the next prescription with a generic following the use of two waivers, compared to 59.5 percent who used only one waiver. Members who used two waivers had a sustained generic dispensation rate of 89.5 percent, compared to 58.5 percent who only used one waiver.

The drug that showed the highest difference in sustained GDR between the use of two waivers and one waiver was AstraZeneca’s high blood pressure medication Toprol XL (metaprolol succinate), which had sustained GDR of 91.5 percent for members using two waivers, compared to 62.5 percent for members who used only one waiver.

Of the top 10, the drug that had the lowest difference was AstraZeneca’s cholesterol lowering drug Crestor (rosuvastatin), which had a sustained GDR of 82.7 percent for members using two waivers versus 78.1 percent for members who used one waiver.

Dependence on Prescription Drugs Rise with Costs

October 01, 2010 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Health Care Uncovered, by Brandi Funk – 9.30.2010 (http://ow.ly/2N3Sp)

It looks like government isn’t the only thing that Americans are increasingly dependent on.

A new report from the Centers for Disease Control earlier this month shows that prescription drug use in the U.S. is on the rise, with half of all Americans currently on at least one prescription drug.

Who pays for these drugs? In 2009, U.S. prescription drugs sales topped $300 billion .

Sadly, as the number of people without health insurance rise and as more insurance companies get pickier about the drugs they cover, many cannot afford to pay for these drugs.

There is no question that the rising use and cost of prescription drugs is a major cause of rising health care costs in this country so if we want affordable health care and reform, we must start here, looking for alternatives.

According to the Generic Pharmaceutical Association, generic drugs have saved Americans $734 billion in the last 10 years so ask your health care provider if switching your prescription drug to generic is a good alternative for you.

Websites such as Medtipster allow you to search for discounted generic drug programs available at pharmacies throughout the USA.

Many of these drugs are available for as little as $4 or less.

  • If your medication is available through one of these programs, you will see a list of pharmacies with pricing, in your neighborhood.
  • If your medication is not on one of the discount generic drug programs they will notify you when it is, or they will suggest a ttherapeutic drug equivalent.
  • If your medication is not available in generic form, they will search for drug brand coupons you can print and take to your local pharmacy.

Why pay more than you have to?

Other Prescription Drug Assistance Websites

http://www.xubex.com

http://www.needymeds.com

http://www.pparx.og

http://www.rxoutreach.com

Discount Cards Offer Little To No Benefit

June 23, 2010 By: Nadia Category: HealthCare, Medtipster, Prescription News, Prescription Savings

Search the internet and you will find hundreds of companies offering pharmacy discounts cards. We looked at several and found alarming results.

All of the pharmacy discount cards we investigated boasted agressive pharmacy discounts.  Let’s define “agressive”:

Half of the discount cards offered an average 12% brand drug discount. The other half cost more than the pharmacy’s cash price.

Nearly 90% of the discount cards had a generic drug price that was higher than the pharmacy’s cash price.

The 10% that had value offered pennys in savings at best.

One of the better cards was offered by the National Association of Counties.  The example below highlights the NACO’s discounted price for frequently utilized Simvastatin 40mg (Generic Zocor).

Comparing NACO’s mail order price to the prices found on www.Medtipster.com were amusing for us, but will most likely be upsetting to anyone whom has one of these NACO discount cards.

Bottom-line: Make sure you pay nothing for these cards and perhaps consider even using them at all.

See example below:

Generic Drug Prices Drop, Brand Prices Continue Rising

May 25, 2010 By: Nadia Category: HealthCare, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: FDAnews.com – Washington Drug Letter, 5.25.2010

AARP: Generic Drug Prices Drop, Brand Prices Continue Rising

The prices of brand-name prescription drugs most often used by Medicare beneficiaries increased nearly 10 percent over the 12-month period ending in March, an AARP report says.

While generic drug prices fell during the April 2009 to March 2010 period, the average price of top brand drugs used by Medicare beneficiaries rose 9.7 percent, continuing an upward trend in annual drug price increases, according to the AARP Public Policy Institute Rx Watchdog Report released last week.

Prices of generic drugs most widely used by Medicare beneficiaries dropped 9.7 percent while prices for widely used specialty drugs rose by 9.2 percent.
“These trends resulted in an average annual rate of increase of 5.3 percent for manufacturer drug prices during the 12 months ending with the first quarter of 2010 despite an extremely low rate of general inflation for all consumer goods and services,” the report says.

Drug companies raised the price of about two-thirds (90 of 144) of specialty drugs studied in the one-year period. Two of the 144 specialty drugs had a drop in price, and both were generics. For an individual taking one specialty medication, the average annual increase in cost of therapy rose by $2,760 during the study period.

AARP’s analysis echoes that of pharmacy benefit managerExpress Scripts’ 2009 Drug Trend Report, released last month. Prices of drugs in the most popular therapeutic classes increased 9.1 percent in 2009, according to that report.

PhRMA, however, said the AARP report is misleading and based on incomplete information. The report fails to take into account discounts and rebates generally negotiated between drug manufacturers and payers, which can significantly lower the cost of brand-name medicines, ultimately benefiting patients, Senior Vice President Ken Johnson said.

“Also, the report’s conclusions ignore the reality that prescription medicines represent a small and decreasing share of growth in overall health care costs in the United States,” Johnson said. “Not only is the current rate of growth for prescription medicines historically low, but the recent decline in drug spending growth has contributed to the lowest rate of total health care growth in almost 50 years.”

Pharmacy Benefit Manager Fees Must Be Reported on Schedule C

February 22, 2010 By: Nadia Category: Medtipster, Prescription News

Source: U.S. Department of Labor, 2/2010

The Department of Labor published FAQs to supplement FAQs published in July 2008, and to provide further guidance in response to additional questions from plans and service providers on the requirements for reporting service provider fees and other compensation on the Schedule C of the 2009 Form 5500 Annual Return/Report of Employee Benefit Plan. Inquiries regarding these supplemental FAQs may be directed to EBSA’s Office of Regulations and Interpretations at 202.693.8523.

The new FAQs — numbers 26 and 27 — note that PBMs perform many services for which they are compensated, including services as a third-party administrator, claims processor, and developer of the plan’s formulary and pharmacy network. The FAQs make clear that fees for these services would be reportable as direct compensation on Schedule C.

Q26: Pharmacy Benefit Managers (PBMs) provide services to plans and are compensated for these services in various ways. How should this compensation be reported?

PBMs often act as third party administrators for ERISA plan prescription drug programs and perform many activities to manage their clients’ prescription drug insurance coverage. They are generally engaged to be responsible for processing and paying prescription drug claims. They can also be engaged to develop and maintain the plan’s formulary and assemble networks of retail pharmacies that a plan sponsor’s members can use to fill prescriptions. PBMs receive fees for these services that are reportable compensation for Schedule C purposes. For example, dispensing fees charged by the PBM for each prescription filled by its mail-order pharmacy, specialty pharmacy, or a pharmacy that is a member of the PBM’s retail network and paid with plan assets would be reportable as direct compensation. Likewise, administrative fees paid with plan assets, whether or not reflected as part of the dispensing fee, would be reportable direct compensation on the Schedule C. Payments by the plan or payments by the plan sponsor that are reimbursed by the plan for ancillary administrative services such as recordkeeping, data management and information reporting, formulary management, participant health desk service, benefit education, utilization review, claims adjudication, participant communications, reporting services, website services, prior authorization, clinical programs, pharmacy audits, and other services would also be reportable direct compensation.

Q27: PBMs may receive rebates or discounts from the pharmaceutical manufacturers based on the amount of drugs a PBM purchases or other factors. Do such rebates and discounts need to be reported as indirect compensation on Schedule C?

Because formulary listings will affect a drug’s sales, pharmaceutical manufacturers compete to ensure that their products are included on PBM formularies. For example, PBMs often negotiate discounts and rebates with drug manufacturers based on the drugs bought and sold by PBMs or dispensed under ERISA plans administered by a PBM. These discounts and rebates go under various names, for example, “formulary payments” to obtain formulary status and “market-share payments” to encourage PBMs to dispense particular drugs. The Department is currently considering the extent to which PBM discount and rebate revenue attributable to a PBM’s business with ERISA plans may properly be classified as compensation related to services provided to the plans. Thus, in the absence of further guidance from the Department, discount and rebate revenue received by PBMs from pharmaceutical companies generally do not need to be treated as reportable indirect compensation for Schedule C purposes, even if the discount or rebate may be based in part of the quantity of drugs dispensed under ERISA plans administered by the PBM. If, however, the plan and the PBM agree that such rebates or discounts (or earnings on rebates and discounts held by the PBM) would be used to compensate the PBM for managing the plan’s prescription drug coverage, dispensing prescriptions or other administrative and ancillary services, that revenue would be reportable indirect compensation notwithstanding that the funds were derived from rebates or discounts.

More information to follow via our blog at www.medtipster.com

Does Your Employer Prescription Plan Cost You… Nothing At All?

February 03, 2010 By: Tylar Masters Category: Free Prescriptions, Prescription News, Prescription Savings

Generic drugs save people hundreds or even thousands of dollars each year, but did you know you could be paying absolutely nothing out of pocket, and your employer’s cost could be significantly reduced – both at the same time.

By now you’re familiar with Medtipster.com. We encourage generic drug purchasing over brand name drugs because they are just as effective, and cost less. You also know where to find your generic prescription at the lowest cost, right in your neighborhood.

If you have insurance, the cost of a generic for you could be a $15 co-pay, and your employer eats up the remainder of the cost, which is an average of $17.00. If you’ve found your generic on a $4 generic program by using Medtipster.com, you pay $4, and your employer pays nothing. We know you love Medtipster.com, but now we want your employer to love Medtipster.com too!

Free prescriptions have been our thing lately, in case you haven’t noticed. Thousands of Michigan residents have received free prescriptions since the beginning of December 2009. We are almost ready to take this free prescription giveaway nationwide, but first, we thought of another way to encourage generic drug purchasing, and you don’t have to be a Michigan resident to take advantage of this program. It’s called the Medtipster MVP.

With this program, employers partner with Medtipster.com to essentially give their employees free prescription cards, redeemable at pharmacies that employees themselves locate on Medtipster.com. The idea is to encourage generic drug purchasing over brand name drugs, and to reduce current and future healthcare costs to the employer.

It works like this example:

Sandy takes Zocor.

Sandy works for ABC123 Inc. and they have partnered with Medtipster.com.

ABC123 informs Sandy that her prescription is available for free if she logs on to the company website portal.

Sandy locates her generic equivalent at her neighborhood pharmacy, then prints out her custom ID card from the company’s privately labeled Medtipster.com site.

Sandy takes her ID card to this participating pharmacy and receives her prescription for Zocor generic equivalent for free.

Because the participating pharmacy has Zocor on a $4 generic program, Medtipster sends ABC123 an invoice for $4, plus a small administration fee.

Looking back at the example in the second paragraph above, this saves the employer an average of $17 per employee’s generic prescription. If you work for a company that employees 1,000 people, and half of those employees take a monthly generic prescription, they spend on average $102,000 each year covering “remaining” costs of their employees’ prescriptions. With the Medtipster MVP, the same company would spend an average of just $24,000 each year, for the SAME generic prescriptions! That’s $78,000 A YEAR!

$78,000 A YEAR.

I like to repeat myself when it sounds that good.

If you would like to see your employer save this kind of money every year, and get free prescriptions, let us know what you think. Let us know who we should talk to at your company about implementing this program. Let’s save some money, and change the way we think about prescription plans.

Just say YES to (cheaper) drugs!

December 18, 2009 By: Tylar Masters Category: Medtipster, Prescription Savings

MedtipsterAmericans utilizing prescriptions could each save thousands of dollars if the senate would allow the importation of prescription drugs from Canada and Europe. Sounds great, so, yeah, when can we benefit from that?

Well, not today. Drugmakers win this battle. The possible influx of cheaper medicines is part of a large health care legislation, and the U.S. Senate voted 51-48 in opposition of this movement to loosen importation rules. But the war on prescription drugs isn’t over, and companies like Medtipster are accomplices to win the war.

What does this mean for us, the Americans, who feel the sting when we go to the pharmacy? It means we absolutely need to choose generic drugs over brand names. Generic drugs are the answer.

The issue is that many people do not know that their prescription may be available for even less than what they pay now, that being either their copay or $32.00, which is the average price of a generic drug. More importantly, where do they go to get that prescription on a generic program? Which pharmacy has that generic drug for just $4, or even less?

Medtipser.com has the answer to those questions.

Generic drug programs are available at most pharmacies, and most of their pharmacy websites have an available database or a download-able PDF of their generic drug lists. Medtipster understands what a hassle that can be for consumers, and created the database all in one location, www.medtipster.com. Pharmacy location, phone number, prescription price, even membership information at requiring pharmacies.

If you have trouble affording your medication, please contact us. We are here to help any way we can!

Resource, Bloomberg.com

Follow us on Twitter! www.twitter.com/medtipster.

Tylar Masters
Manager of Marketing and Communications
Medtipster, LLC.
www.medtipster.com

Generic Discount Drug Programs

June 02, 2009 By: PharmaSueAnn Category: Medtipster, Prescription Savings

It pays to shop around – but who has time. Many pharmacies have discount generic programs and I see new programs all the time. Although the lists are similar they are not the same with differences in prices ~ drugs ~ strengths ~ and quantities. To simplify the process and same time and money visit medtipter.com. We have compiled it all for you in a simple 1-2-3 search.

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