Among those who write about health insurance and health care policy, prescription drug prices have long been a hot topic. And one of the first things that comes up usually has to do with generics versus brand name drugs. Overall, patients win when a drug becomes available as a generic. Although sometimes that takes longer than it should. Most of us know the basics: generics are chemically the same as their brand name counterparts, generics come out after patents expire, generics are less expensive than brand name drugs. But I just learned a lot more about generic drugs and how health insurance companies encourage their use when I read this article by Jaan Sidorov at the Disease Management Care Blog.
We’re fans of electronic medical records and e-prescribing for a variety of reasons, but Sidorov has noted a reason why health insurance companies like e-prescribing: the electronic system can be set up to prompt the doc to prescribe a generic instead of a brand name. If a doctor is writing a prescription on a piece of paper, there’s no way to prompt a mid-script change. And while the doctor might not even know if a generic exists for a particular drug, a computer will know.
Another great point Sidorov makes is about those rock-bottom prescription prices for generics, and the fact that some health insurance companies have even agreed to waive the copay on generics because of the economy. If the real goal here was to help patients pay for prescriptions, why not waive the copay for generics and subtract the same amount (say $5 or $10) from the copay for brand name drugs? Granted, the patient comes out ahead when generic copays are lowered or waived. But so do health insurance companies, since patients are more likely to request generic drugs if they know that they will pay very little or nothing at all to have the prescription filled. And just like consumers, health insurance companies pay less for generic prescriptions.
In an effort to control costs, some health insurance policies no longer cover brand name prescriptions (indeed, some policies dodge the whole issue by not covering prescriptions at all). Although they are better than going without health insurance, we don’t recommend policies that don’t cover brand name drugs at all. A better choice from a risk-management perspective for most people would be to opt for a higher deductible or an HSA-qualified plan, as long as brand name drugs are covered once the deductible is met. At least that way you can budget for your potential out of pocket expenses. But even if you have coverage for brand name prescriptions on your policy, asking for a generic will likely save you money. And it will save your health insurance company money. They are well aware of that fact, and apparently employ a lot more tactics than most of of realize to get doctors to prescribe generics and patients to request them. Although this is one case where I think that clever corporate tricks are being used for good: utilizing generics means a lower overall cost of health care, and that benefits nearly all of us (I suppose the pharmaceutical companies would prefer that all prescriptions be written for brand name drugs).
Thanks to Nancy Germond at Insurance Copywriter for hosting this week’s Cavalcade of Risk, where I found the article from DMCB. The Colorado Health Insurance Insider is pleased to be hosting the last Cavalcade of 2008, so get your submissions in – we’re looking forward to reading them. And have a very happy and safe holiday season!
