Health care spending in the United States has increased substantially the past few years, and it isn't likely to slow down any time soon. At this rate, national health care costs could reach $6.2 trillion by 2028. A number of factors, including the cost of medical supplies and drugs, contribute to those rising numbers. The financial pinch many people were already feeling has been intensified by the unsteady economy, leading consumers to call for lowered health plan costs whenever and wherever possible. Some believe reducing prescription drug spending is an easy way to do that. But consumers still deserve access to the medications they need at prices they can afford.
Generic medications: A solution to potential challenges
Using generic medications in place of high-priced, brand-name drugs offers the same clinical benefits, and it can save patients and health plan providers significant money in the long run. It's a convenient, simple way to reduce costs while making sure patients have continued access to the treatments and medicines they've been prescribed. But while generics are an obvious answer to many challenges facing the industry, they aren't embraced nearly as often as they should be. According to U.S. Pharmacist, "While generic drugs are extensively prescribed … t some consumers are still hesitant about using generic drugs and believe that they are not as safe or effective as brand-name drugs."
Consumers have a variety of reasons for their misgivings, but the skepticism is unwarranted. Many health plan administrators and pharmacy benefit optimizers are working to dispel the myths that can rob consumers of significant savings.
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The most commonly held misconception is since generics are cheaper than brand-name drugs, they're less effective. That just isn't the case. Generic drugs, which are a copy of a patented brand-name drug's novel chemical substance, are comparable in dosage form, strength, route of administration, quality, performance, and intended use. That means FDA-approved generic medicines work in the same way and provide the same clinical benefits and risks as their brand-name counterparts.
Generic medicines tend to cost less than their brand-name counterparts because they don't have to repeat animal and clinical (human) studies that were required of the brand-name medicines to demonstrate safety and effectiveness. Also, the FDA will often approve multiple generic drugs all based on the same brand-name drug, which creates competition in the marketplace that can result in lower prices. In fact, studies continue to show more competition from generic drugs can help lower overall drug prices and improve access to drugs for patients and consumers.
In 2020, generic drugs made up 87% of pharmacy claims and only 13% of overall pharmacy spend, compared to non-specialty, brand-name medications, which comprise just 13% of claims but 38% of overall pharmacy spend. Those numbers are hard to argue.
Some consumers mistakenly believe their preference for brand-name drugs is a personal choice that doesn't affect anyone else. Pharmacy services are indeed a matter of privacy, but that general logic is flawed. Choosing generics can decrease the overall costs of pharmacy benefits plans without compromising quality of care. Both drug benefit plan sponsors and patients benefit from cost savings when generics are used e. Some plans even create incentives for members to use generic drugs.
The industry's role in patient education
Despite the evidence proving the safety and effectiveness of generic medications and their ability to lower costs, patients are still skeptical. According to a recent study, nearly two-thirds of the patients surveyed said they knew about the difference between brand-name drugs and generics. From that group, one-third weren't satisfied with the information their doctors provided them, and 37% of patients expressed general skepticism toward generic drugs because of their lower price.
Suspicion isn't always the culprit, though. Complicated benefit packages can make it tough for consumers to understand their health care plans' preferred drug lists and cost-sharing with members. Plan administrators need to make information on co-pays and medication costs readily available to members, so the members can make informed, cost-effective, healthy decisions. Also, it's crucial for prescribing physicians and pharmacists to educate their patients.
According to U.S. Pharmacist, for example, "pharmacists can identify and address barriers to using generic drugs, such as lack of knowledge, belief that brand-name drugs and generic drugs are not equivalent, previous experiences with generic drugs, and concerns about possible adverse effects (AEs)." Furthermore, "through effective patient-education measures, pharmacists can provide patients with relevant information and direct them to reliable patient-education resources about generic drugs, which will enable them to make informed decisions about using generic drugs. Studies reveal that the availability of generic drugs are not only associated with cost savings but can aid in promoting medication adherence, which can result in improved clinical outcomes."
Everyone must work together — policymakers, plan administrators, health care providers, and others in the medical field — to help patients understand the benefits of generic medications. Efforts to lower health care costs through the use of generic drugs is a step in the right direction, and more can be done.
Pharmacy benefit optimizers, for example, are committed to putting the patient first, improving services and options while also working to educate those patients so they can feel confident making decisions about their own care. To do their part, health plans and PBMs could increase support for doctors in prescribing the most cost-effective medications on their patients' formularies. Also, PBMs could base formulary choices and price negotiations on the total cost of patient care in addition to a drug's health benefits. There are even steps that could be taken to promote the FDA's timely approval of generic drugs, such as summarily denying petitions that seem to be filed with the main purpose of delaying an application for approval. Frequently, weak secondary patents on brand drugs are applied for to prevent generic versions, and the federal government could encourage administrative challenges to those secondary patents.
Changing just a few things to help promote the usage of generic drugs could have an enormous impact on pharmacy spending as a whole.
Wendy Barnes is the Pharmacy Benefits Leader and CEO of RxBenefits.
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