Over the next 14 months, seven of the 20 top-selling brand-name drugs are set to lose their patents. Many employers see this as a way to cut their health plans' prescription costs, and though the cost savings potential is certainly available, there is more to it, says Terrance Killilea, vice president for Integrate Health Metrics, a national health care consulting group within Wells Fargo Insurance Services USA Inc.
For an employer to truly realize the possible cost savings generic drugs offer, it first has to become an informed consumer, Killilea says, which means understanding how pharmaceutical benefit managers price these medications. With a better understanding of PBM contracts, employers may consider taking a different pricing approach than the traditional method.
"There's additional information about pricing that would be valuable to employers," Killilea says. "I think it's a question of the extent of an employer's understanding of the pricing environment, and the more they understand the pricing environment, the more effective purchasers of pharmaceuticals they'll become."
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