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Medicare Drug Program News
$24.7 Billion in Generic Drug Savings Available This
Year
Driven by introduction of two new blockbuster
generic brands
 June 6, 2006 – Senior citizens have been repeatedly
urged to use generic drugs, which can provide large savings for those in
the Medicare prescription drug program. A new study released today says
generic drugs, including new anti-cholesterol and anti-depressants drugs
- could save U.S. consumers $24.7 billion this year alone. The report
was issued by Express Scripts, one of the nation's largest managers of
pharmacy benefit plans.
The report examined the clinical potential for
greater generic drug use in six major drug-therapy classes used to treat
common conditions like stomach ulcers, inflammation, depression, high
blood pressure and high cholesterol. It was based on a random sample of
approximately three million individuals projectable to the U.S.
commercially insured population.
The $24.7 billion savings potential reflects the
introduction this year of new generic drugs in two of the most
widely-used classes -- the anti- cholesterol drug simvastatin (generic
Zocor) and the anti-depressant drug sertraline (generic Zoloft). In
2005, Zocor and Zoloft had sales of $3.1 and $2.6 billion, respectively.
Thus, the biggest savings available this year are
in the anti-cholesterol class at $10.3 billion. Generics, including
lovastatin, pravastatin and ultimately simvastatin, are potent enough to
fill 85 percent of all prescriptions for an anti-cholesterol drug, based
on existing prescribing patterns.
On average, only 18.8 percent of anti-cholesterol
prescriptions are currently filled with a generic. However, some health
plans have already achieved generic utilization in the anti-cholesterol
class exceeding 75 percent, according to published reports.
|
Potential
generic drug savings across six drug therapy classes |
2006 Current
Rate |
Generic Usage
Targets |
Potential
Savings if Generics Usage Targets Reached |
|
|
(%) |
(%) |
|
|
Anti-cholesterol |
18.8 |
85 |
$10.3 billion |
|
Gastrointestinals |
35.4 |
95 |
$6.8 billion |
|
Anti-depressant |
57.0 |
85 |
$3.4 billion |
|
Anti-hypertensives |
58.3 |
75 |
$2.1 billion |
|
NSAIDs |
77.0 |
97 |
$1.2 billion |
|
Calcium
channel blockers |
49.4 |
95 |
$0.9 billion |
|
Total Potential Savings |
|
|
$24.7 billion |
| |
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"We have a tremendous opportunity to conserve precious health
care dollars by increasing our use of less expensive generic drugs and
still achieve the same clinical benefit," said Dr. Ed Weisbart, Express
Scripts chief medical officer.
The generic fill rate goals utilized in the report
are based on an evaluation of clinical efficacy and market dynamics of
branded and generic medications. In 2004 and 2005, failure to take
advantage of the full potential of generic drugs in the six classes
resulted in missed savings opportunities of $20 and $21.3 billion,
respectively.
The Express Scripts report also ranked 2005 generic
drug use and savings opportunities by state, revealing significant
variations across the six drug categories.
Last year, California had the biggest absolute
savings potential at $1.7 billion, but, on a per capita basis, Kentucky
passed up the most savings at $163 per commercially insured life. New
Mexico was best at capturing generic savings, leaving only $81 per
capita unclaimed.
Using 2005 data as a guide, the states with the
most to gain from greater use of generic anti-cholesterol drugs this
year are Delaware, Michigan, West Virginia, Maryland, and Kentucky on a
per capita basis. The leaders in absolute savings potential are
California, Texas, Florida, Pennsylvania and Ohio.
In 2005, New Mexico and Massachusetts had the
highest overall use of generic drugs at 60 and 59 percent, respectively,
while New Jersey at 45 percent had the lowest. In addition to New
Jersey, five other states had generic fill rates of less than 50
percent: Florida, Louisiana, Maryland, New York and Texas. Neither
Hawaii nor Alaska was included in the analysis.
The savings opportunity from increased use of
generic drugs has never been greater. More than $50 billion worth of
branded drugs will lose patent exclusivity over the next five years.
This year alone, $14.3 billion in drug sales are expected to lose
patent, with generic alternatives becoming available for at least 16
branded drugs.
A generic drug costs approximately 60 percent less
than a brand name drug, on average. Consumers also pay a lower
co-payment for generic medications, saving $15 or more per prescription
on average compared to branded medications.
Weisbart outlined four steps consumers, health
plans, health professionals and policymakers can take to increase the
use of generic drugs:
● Increase awareness of the wide number of
generic alternatives to brand drugs.
● Always assess if a generic drug would meet the clinical need; only
consider using a brand drug when there is clear evidence that the brand
drug provides an important clinical value not available with today's
generic medications. This strategy would free up resources to meet other
pressing health care needs and help preserve the pharmacy benefit as we
know it -- without impacting quality.
● Adopt pharmacy benefit plan designs that encourage greater use of
generic drugs and share the savings with patients. For example, use
programs that provide for trying a generic drug before a brand. Express
Scripts recently announced that 14 million members of pharmacy plans it
manages are in such programs, a five-fold increase over 2.8 million in
2001.
● Enact state laws and regulations that support the use of chemically
equivalent generic alternatives to brand drugs.
More about study:
A copy of the report, with complete rankings for
48 states, will be available at
http://www.expressscripts.com/ourcompany/news/outcomesresearch/onlinepublications/ .
Express Scripts, Inc. (NASDAQ:ESRX)
is one of the largest pharmacy benefit management (PBM) companies in
North America, providing PBM services to over 55 million patients
through facilities in 13 states and Canada. Express Scripts serves
thousands of client groups, including managed-care organizations,
insurance carriers, third-party administrators, employers and
union-sponsored benefit plans. The Company also provides distribution
services for specialty pharmaceuticals through its CuraScript specialty
pharmacy. More information can be found at
http://www.express-scripts.com/ .
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