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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

DAW Prescriptions May Add $7.7 Billion To Healthcare Costs

March 25, 2011 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: CVS Caremark – 3.25.2011

Approximately five percent of prescriptions submitted by Pharmacy Benefit Management (PBM) members in a 30-day period during 2009 included a “dispense as written” (DAW) designation. This practice – whereby doctors or patients demand the dispensing of a specific brand-name drug and not a generic alternative – costs the health care system up to $7.7 billion annually, according to a new study by researchers at Harvard University, Brigham and Women’s Hospital. Moreover, these requests reduce the likelihood that patients actually fill new prescriptions for essential chronic conditions.

In a study published this week in the American Journal of Medicine, the researchers demonstrate that DAW designations for prescriptions have important implications for medication adherence. They found that when starting new essential therapy, chronically ill patients with DAW prescriptions were 50 to 60 percent less likely to actually fill the more expensive brand name prescriptions than generics. “Although dispense as written requests would seem to reflect a conscious decision by patients or their physicians to use a specific agent, the increased cost sharing that results for the patient may decrease the likelihood that patients actually fill their prescriptions,” the researchers said.

“This study shows that dispense as written requests are costing the health care system billions,” said William H. Shrank, MD, MSHS, of Brigham and Women’s Hospital and Harvard, and the study’s lead author.  ”The further irony is that patients with prescriptions specifying a certain brand seem less likely to fill their initial prescriptions, adding to the medication non-adherence problem.”

“Previous to this study, little was known about the frequency with which doctors and patients request dispense as written prescriptions,” said Troy A. Brennan, MD, MPH, Executive Vice President and Chief Medical Officer of CVS Caremark and a study author. “Those who advocate for dispense as written and argue that the practice provides patients and physicians with greater choice will probably be surprised to learn that the practice increases costs and exacerbates non-adherence.”

The study reviewed 5.6 million prescriptions adjudicated for two million patients from January 1 to January 31, 2009. The review found that 2.7 percent of those prescriptions were designated DAW by doctors, while another two percent were requested DAW by patients.

If existing safe and effective generic alternatives had been provided in place of those brand-specific prescriptions, patients would have saved $1.7 million and health plans would have spent $10.6 million less for the medications.  The researchers said that assuming a similar rate of DAW requests for the more than 3.6 billion prescriptions filled in the U.S. annually, patient costs could be reduced by $1.2 billion and overall health system costs could be reduced by $7.7 billion.

The study is a product of a previously announced three-year collaboration with Harvard University and Brigham and Women’s Hospital to research pharmacy claims data in order to better understand patient behavior, particularly around medication adherence.  Annual excess health care costs due to medication non-adherence in the U.S. have been estimated to be as much as $290 billion annually.

Rx Abandonment on the Rise

March 24, 2010 By: Nadia Category: Medtipster, Prescription News

Rx abandonment on the rise in patients with commercial health plans, market research study said

Medtipster Source: Drug Benefit News – Author: Alaric DeArment

Patients using commercial health plans in 2009 abandoned their prescriptions at a rate 24% higher than in 2008, according to a new report by Wolters Kluwer Pharma Solutions.

The market research firm said consumers were become more price-sensitive toward drugs, particularly branded drugs; as a result, while the overall rate of abandonment was 6.3%, it was 8.6% for branded drugs, a 23% increase over 2008 and a 68% increase over 2006. Together, patient abandonment and denials for new prescriptions by payers meant that 14.4% of prescriptions went unfilled in 2009, a 5.5% increase over 2008.

Additionally, many patients are turning to generics, which accounted for 66% of prescriptions filled in 2009, versus 60% in 2008 and 50% in 2005. In 2009, there were 2.6 billion generic prescriptions filled, compared with 1.3 billion branded prescriptions.

“Today, patients wield more power and are more inclined to exert that influence in decisions about their prescription drugs,” said Wolters Kluwer Pharma Solutions president and CEO Mark Spiers. “During tough economic times, consumers tend to think more with their pocketbooks. We’re seeing increasing price sensitivity to co-pay and broader moves by patients in making decisions about their drug therapy.”

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

Switch it Up and Save

February 02, 2010 By: Tylar Masters Category: Medtipster, Prescription Savings

The idea of saving money is the sole reason why people go to different stores for different items, if they know ahead of time they can spend less to get the same item. Why would prescriptions be any different, I suppose?

We at Medtipster.com encourage you to use our database to find the pharmacy with your specific prescription available on a pharmacy’s $4 generic program close to your home. If you’re taking several medications, this could mean you have several different pharmacy visits every month or every three months. It seems like it makes sense, but then again, does it have to be this way?

Pharmacies want your business. They want to keep you as a customer. Many offer gift cards and incentives to get you in there once, with every intention of keeping you. Next time you have a prescription, you’re already in the database, the pharmacy technician is familiar with your prescription history, and the hassle of a new pharmacy is obsolete. So, why wouldn’t they do what they have to do to keep you?

Price matching is something we hear all the time. This takes me back to my original question, why would prescriptions be any different, I suppose? They are not. Ask your pharmacy technician to match the price being offered at the next pharmacy! It can’t hurt to ask, and all they can say is, “no.”

Find your generics on Medtipster.com first then make a note of where the other generics are available on a generics program. Print the list, or go directly to the competing pharmacy and ask for a print out of the generic’s cost. Take that to the pharmacy of your choice and simply say, “I want to keep all of my prescriptions here, can you match the price of this competing pharmacy’s generic equivalent?”

Switch it up and save! Save time, gas money, and frustration.

Source: MSN Money http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1349052

Tylar Masters

Through the “FREE Everyday Prescription Giveaway,” Medtipster will process free generics for Michigan residents at pharmacies including Kroger, Target, Spartan Stores and Walmart.

December 01, 2009 By: Nadia Category: Free Prescriptions, Medtipster

Medtipster's FREE Every Day Giveaway

Medtipster's FREE Every Day Giveaway

Today Medtipster, the company behind the online healthcare search engine and price comparator Medtipster.com, announced the launch of a new program to create awareness of a safe and effective way to reduce consumers’ healthcare costs in the face of today’s difficult economy.

Through Medtipster’s “FREE Everyday Prescription Giveaway,” Michigan residents can visit www.medtipster.com throughout December to register for a chance to win a free qualifying generic prescription on a discount list from a participating pharmacy. No purchase is necessary to register. Network pharmacies on medtipster.com include Kroger, Target, Spartan Stores, and Walmart, among others. Hundreds of winners will be selected at random during the 31-day promotion, ending December 31, 2009. Winners will select from thousands of qualifying generic medications listed on www.medtipster.com and receive up to a three-month supply for free at participating pharmacies.

“Switching to generic prescriptions on discount lists is a great way for consumers to save money on their rising healthcare costs, without compromising their quality of care,” said Jason A. Klein, President of Medtipster. “Our ‘FREE Everyday’ promotion will bring awareness to this, and to the fact that consumers can save everyday by using Medtipster.com to find where they can locate generic equivalents of their medications on discount pricing programs by zip code, right in their neighborhoods. We are not an e-commerce site – instead we help consumers find where they can purchase their prescription medications and find seasonal and H1N1 flu vaccinations at the lowest price, right in their neighborhoods.”

Based in Troy, Mich., Medtipster is launching the promotion in Michigan, but will soon expand the promotion nationwide. For more information or to register for a chance to win, visit www.medtipster.com.

About Medtipster

Medtipster (www.medtipster.com) was developed to provide the public with a solution to the rising cost of healthcare. Headquartered in Troy, Mich., Medtipster is the brainchild of five Michigan executives, who combined their collective experience of 100 years in the pharmaceutical industry to provide Americans with substantial savings on their prescription drug and healthcare expenses.

Free prescriptions? Really? Can’t beat FREE.

October 05, 2009 By: Jason A. Klein Category: Free Prescriptions, Medtipster

Jason Klein

Jason Klein

We at Medtipster have been monitoring the discounted generic programs offered by many of the retail chains for years now. Of course we have, it’s our business. Kroger, Target, Walmart, etc… offer $4.00 30 day supplies and $10.00 90 day supplies… Take it from a “lifer” in the Rx business, THAT’S AN AMAZING PROGRAM! We have several large employers in North Carolina that have instituted managed Rx plans on top of their current PBM / Rx program in an attempt to steer their folks to low cost generics. For more information, please contact us. We are huge fans of you BCBSNC (Blue Cross Blue Shield of North Carolina) & would love to work with you!

Now the trend appears to be to offer FREE prescriptions. REALLY! We’re all in! Meijers in the midwest has been doing this for years and is extremely succesful. Now Stater Bros. & Albertsons are getting in the game. Kudos to you! Our goal is to get prescriptions in the hands of consumers that need them and at the right price. Sounds like that meets our criteria.

Best,

JK

Jason A. Klein
President
Medtipster, LLC.
email: jklein@medtipster.com
web address: www.medtipster.com

Two out of three drugs dispensed in 2008 were generic!

September 14, 2009 By: Jason A. Klein Category: Medtipster, Prescription Savings

jklein20091 In a conversation I had recently with a large employer in North Carolina, I heard the following:

-generics save employers money via the $4 programs, but the majority of drugs available are brands.

Nothing could be farther from the truth. Nearly 70% of all drugs on the market have a generic equivalent. Same active ingredient, just 90% less in cost. Not drug strength, cost.
Please click here (PDF) for a generic information brochure and find information straight from the FDA.

Remember, we don’t sell the drugs…we just tell you where to find ‘em at the lowest price.

Thank you for your time and happy browsing at medtipster.com!

JK

Jason A. Klein
President
Medtipster, LLC.
email: jklein@medtipster.com
web address: www.medtipster.com

Do You Have Questions About Generics!

July 01, 2009 By: PharmaSueAnn Category: Medtipster, Prescription Savings

A recent survey out of California indicates that about 30% of “… respondents did not know or believe that generics have the same active ingredients and effectiveness as brand name drugs.”

Generics can a be a cost effective opportunity to lower you overall health care costs. If you are uncertain if a generic is right for you. PharmaSueAnn says: Contract you local neighborhood pharmacist to discuss your personal needs.

Generic Drugs $ave Billions

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

You can save money on generics too!!!

A recent analysis from the Generic Pharmaceutical Association revealed that generic drugs saved the U.S. healthcare system more the $734 Billion dollars in the last decade.

Don’t miss out on the savings, look for generic savings and therapeutic generic alternatives to your Brand Name drugs. It is as simple as 1-2-3 at Medtipster.

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