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Senior Citizens Can Save Billions If Brand-Name
Drug-Makers Don't Stop Generics
Pharmacy Benefit
Managers see Medicare saving $23 billion in 5 years
April 18, 2006 – Senior citizens and the Medicare
Part D program could potentially save more than $23 billion dollars over
the next five years as at least 14 major brand-name drugs commonly used
by seniors are slated to become available in generic form. Standing in
the way, however, is the powerful lobby for the pharmaceutical companies
that make name-brand drugs.
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This analysis comes from an association
representing pharmacy benefit managers (PBMs), which administer
prescription drug plans for more than 200 million Americans with health
coverage provided through small businesses, Fortune 500 employers,
health insurers, labor unions, and Medicare Part D.
The Pharmaceutical Care Management Association (PCMA)
warned that these savings are at risk in the coming years as special
interest groups continue efforts aimed at undermining generic
alternatives, both in public programs and the commercial marketplace.
"PBMs are America's lead drivers in the effort to
increase generic utilization, which helps improve quality and lower drug
costs for patients and payors," said PCMA President Mark Merritt. "Our
analysis shows that in Medicare, increased access to generics has the
potential to save, at a minimum, $23 billion dollars through 2010."
With great attention being given to drugs going off
patent or losing exclusivity, PCMA examined the top 100 drugs used by
seniors to arrive at a conservative estimate of potential Medicare
cost-savings.
Over the next five years, 14 brand-name drugs of
the top 100 drugs commonly used by seniors to treat conditions such as
high cholesterol, depression, heart disease, and hypertension are
anticipated to go off patent or lose exclusivity.
As soon as drugs become available in generic form,
health plans and PBMs work collaboratively with patients, physicians,
pharmacists, and payors to increase awareness about generic alternatives
and potential cost-savings.
Among the key findings of PCMA's analysis:
● Seniors and the Medicare program stand
potentially to save at least $23 billion dollars over the next five
years as 14 major brand-name drugs commonly used by seniors are expected
to become available in generic form. If PCMA's analysis were expanded
beyond the top 100 drugs used by seniors, the savings would be even
greater.
● For the remainder of 2006, four drugs commonly
used by seniors -- Zoloft (depression), Zocor (cholesterol), Pravachol
(cholesterol), and Proscar (prostititis) -- are expected to go off
patent or lose exclusivity and face generic competition. PCMA estimates
the potential Medicare savings from using generic versions of these
products at approximately $1.5 billion in 2006 and $13 billion over the
entire 2006-2010 period.
● In 2007, seven drugs commonly used by seniors -
Norvasc (heart disease), Ambien (sleep disorder), Zyrtec (allergies),
Lotrel (heart disease), Coreg (hypertension), Lamisil (fungal
infection), and Tequin (antibiotic) -- are expected to go generic. PCMA
estimates the potential savings in 2007 alone at nearly $700 million and
about $7 billion over the 2007-2010 period.
Special-Interest Efforts to Undermine Access to
Generics
While the savings potential associated with
increased access to generics for seniors and the Medicare Part D program
are substantial, PCMA warns that these gains could be at risk if some
special-interest groups - including the brand-name drugmakers' lobby -
have their way.
These groups are working hard to undermine
increased access to generics, both in public programs and in the
commercial marketplace, and their push could lead to higher premiums,
copayments, and deductibles for beneficiaries. Their efforts include:
● Opposing legislation, such as the bipartisan
"Lower PRICED Drugs Act," sponsored by Senators Debbie Stabenow (D-Mich.)
and Trent Lott (R-Miss.) that would speed up generics' market entry. The
Stabenow-Lott bill has the support of a broad-based group of
organizations, including AARP, Consumers Union, General Motors, and the
Coalition for a Competitive Pharmaceutical Marketplace, which represents
employers, insurers, and others;
● Supporting mandated across-the-board preferred
coverage of brand-name drugs in Medicare Part D, regardless of their
effectiveness or the availability of clinically equivalent generics;
● Supporting the use of legislation and
litigation to extend patent protections on brand-name drugs scheduled to
go off patent and prevent generics from coming to market as scheduled;
● Opposing the use of comparative effectiveness
measures to ensure value-based purchasing; and
● Opposing generic substitution laws in state
Medicaid programs.
In addition, recent news reports have indicated
that the Food and Drug Administration's Office of Generic Drugs, which
reviews applications for generic drugs, is facing a backlog of more than
800 applications.
PBMs Leading the Way in Encouraging Use of
Generic Drugs
PBMs work collaboratively with patients,
physicians, pharmacists, employers, and health plans to improve quality
and lower costs, including through expanded use of generic drugs. CMS
researchers recently cited increased use of generics as one of four key
factors in driving the rate of growth in drug spend in 2004 to a
ten-year historic low.
PBMs claim to be at the forefront of innovative
efforts to encourage the use of generics, including:
● Using tiered formularies that place generic
medicines on the lowest cost tier, making them the most affordable
option for seniors taking these medicines;
● Educating patients on the affordability, safety
and efficacy of generic medications in letters to patients and other
direct outreach;
● Generic drug physician-sampling programs to
increase physician awareness of generic drugs;
● Waiving co-pays and deductibles when generics
are used instead of brands; and
● Use of step therapy to ensure that, when
clinically appropriate, generics are the first line therapy before more
expensive brand medications are used - a principle used in other parts
of the health system.
A complete copy of the analysis can be found at
http://www.pcmanet.org
About the source:
PCMA is the national association representing
America's pharmacy benefit managers (PBMs), which administer
prescription drug plans for more than 200 million Americans with health
coverage provided through small businesses, Fortune 500 employers,
health insurers, labor unions, and Medicare Part D.
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