The number of prescriptions written for generic drugs has been on the rise for some time, and with more employers requiring their employees to make increased financial contributions to the cost of their health care, America’s money-saving mindset has only intensified. The facts about generic drugs are spreading — generics are as safe, and in most cases, as effective as their brand-name counterparts. Generics also provide employers and their employees with significant savings, often fifty percent or more over the brand equivalent.

To reduce health care costs, some employers are offering their employees financial incentives to choose generic over brand-name drugs and order some maintenance prescription drugs by mail. Many health plans are also encouraging their members to use generic drugs when available.

To save money on prescription drug coverage, I suggest that employers promote the use of generic medication. Your employees are more likely to request generic medication if they understand the medication is safe, effective and offers a significant savings over brand-name drugs.

In addition to advocating generic drugs, I advise employers to implement a comprehensive prescription drug formulary, provide education on the prudent use of antibiotics and encourage employees to actively participate in their health care by understanding their prescription drug coverage, learning how and when to use their coverage, and to develop good relationships with their physicians and pharmacists.

Popular drugs are getting cheaper
It’s an exciting time to save money on drugs because so many popular prescription drugs are going off-patent and are about to get a lot cheaper. Both the anti-depressant Zoloft and cholesterol-lowering Zocor will soon cost much less. Pharmacists also expect the sleep aid Ambien and hypertension drug Norvasc to become less expensive in late 2007.

Employers, patients and governments could save up to $50 billion in the next four years as popular brand-name drugs lose patent protection and generics take their place. The actual savings will depend on whether doctors and patients embrace the low-cost generics. The same dynamic has allowed large retail chains to offer $4 generics: a boom in the number of widely used drugs that are now, or soon will be, off-patent.

The U.S. Food and Drug Administration grants companies that invent drugs a period of marketing exclusivity — allowing the companies charge what the market will bear for their medicines. But when a drug’s patent expires after several decades, any drug maker can apply to manufacture it, and usually many do. Generics are made exactly like the original drug, but the cost falls dramatically.

In the past year, along with Zocor and Zoloft, the antidepressant Wellbutrin, cholesterol-lowering Pravachol and nasal spray Flonase have gone generic. Employers, governments and patients paid $9.4 billion for these drugs in 2005. Generics can cost 80 percent less than the brand, a potential savings of $7.5 billion on those five drugs alone.

MVP is doing its part to reduce the cost of prescription drugs by including several cost-saving features in your health coverage:

• Prescription drug formulary — Most health plans require their members to adhere to a formulary — a listing of prescription drugs approved for use. Formularies help reduce health care costs for the member, the employer and the health plan by providing rational therapeutic options and minimizing duplication where possible.

The media is quick to report America’s increasing use of and costs for prescription drugs, however little attention is paid to the financial benefits of generic drugs. As the American population continues to age and cost-savings initiatives expand, more employers will be requiring their employees to share the responsibility of increasing healthcare costs. Ultimately, it’s up to the doctor to prescribe a generic or the patient to request one if it’s available.

MVP remains committed to the well being of our current and future members. As such, we promote the use of a prescription drug formulary, the prudent use of prescription and generic drugs, member education and adopting a healthy lifestyle.

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