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Pressure mounts to prescribe more generics

As many popular drugs lose their patents, insurers are seeing an opportunity to put a lid on rising pharmaceutical costs.

By Julie Jacob, amednews staff. Feb. 18, 2002.

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Patents are set to expire this year on several widely prescribed prescription drugs, including Claritin and Xanax, and some health insurers say that makes this an opportune time to boost their efforts to get physicians to prescribe generic drugs and patients to use them.

Glucophage and Zomig are other drugs coming off the patent rolls this year, following last year's expirations for Prozac, Prilosec and Mevacor.

"It's an incredible opportunity. Never before in recent pharmaceutical history have we had generics of really gold-standard drugs in therapeutic classes that constitute a significant portion of drug spending," said Robert Seidman, PharmD, MPH, chief pharmacy officer for Thousand Oaks, Calif.-based WellPoint Health Networks. Dr. Seidman is one of many who note that generics are priced 30% to 60% less than their brand-name equivalents.

Surveys by both Watson Wyatt Worldwide and Towers Perrin put the average rise in health plans' drug costs at 17% to 22% per year -- effectively doubling drug costs every five years. The Pharmaceutical Research and Manufacturers of America data state that drug costs rose 14.7% in 2000, due to a combination of more prescriptions per patient and the use of more expensive drugs.

Physicians are responsible for covering drug costs if they have accepted pharmacy risk as part of a capitated plan. Otherwise, plans absorb that cost, passing it into their premiums. Hewitt & Associates reports that drugs made up 15% of premium costs, up from 10% five years ago. [...]