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Published: December, 2009; Vol 6, Num 7

 

Generic Drugs Cut Health Care Costs

Even though an ounce of prevention is worth a pound of cure, when it comes to prescription medications, pocketbooks have never been so sick. Prescription drug spending – nearly $230 billion in 2007 – is among the fastest-growing areas in health care costs.

It could be worse.

According to Health Affairs, a policy journal affiliated with the nonprofit international health organization, Project HOPE, generics – non-brand versions of formerly patented medications that become available when those exclusive rights expire – keep prescription costs from reaching more epic heights.

Other Ways to Save

In addition to choosing generic drugs, mail order prescription programs are another tool for keeping costs down. If your health plan is affiliated with a pharmacy benefit manager (PBM), it receives a discount through bulk price negotiation.

Many PBMs and pharmaceutical manufacturers provide financial assistance for those who cannot afford vital drugs, including Laborers who may have temporarily lost health insurance coverage due to reduced hours. RxAssist (www.rxassist.org) provides a database of patient assistance programs. The National Alliance on Mental Illness (NAMI) website also has a list of some of these companies and eligibility requirements.

Generic drugs copy brand-name medications in dosage, safety, strength and intended use. A generic drug is bioequivalent to the name-brand, but less expensive. Whether prescription or over-the-counter – for example, diazepam instead of Valium, acetaminophen instead of Tylenol – generic drugs usually cost less. That is because generic manufacturers do not share in the research, development and marketing costs incurred by originating pharmaceutical companies (which, because of these investments, are granted a U.S. patent that guarantees the exclusive right to manufacture and market new drugs for a period of up to twenty years before generic productions are authorized).

The Food and Drug Administration (FDA) requires generic drugs to have the same quality, purity and stability as name-brand medications. They are chemically equivalent. That protection and their cost make generics attractive to health insurance providers and consumers. Today, the FDA estimates that nearly half of all prescriptions are filled with generic drugs.

However, questions about some generic drugs linger. Part of this is due to their shape, size and color. Generics do not always resemble name-brands. While their active ingredients are identical, the fillers and dyes used in their manufacture are not necessarily the same. The resulting difference can lead to confusion and on occasion, valid reasons for concern. For instance, the American Heart Association (AHA) cautions that when treating arrhythmia, generic makeup may in fact alter a drug’s antiarrhythmic properties. Health care providers must maintain awareness when prescribing medications for this condition.

A related concern surrounds therapeutic interchange, a policy that allows pharmacists, hospitals and some prescription providers – without obtaining prior consent from the physician – to dispense drugs that are chemically different but considered equivalent to the ones prescribed. Although similar, these drugs are not generic versions of name-brands.

A number of state legislatures are looking into restricting therapeutic interchange, but only Hawaii, Tennessee and Utah have laws on the books.

Consumers must be proactive about medications regardless of whether they are prescription or over-the-counter, generic or name-brand. Check drug labels to compare ingredients. Drugs@FDA is a catalog of FDA-approved drug products, and the FDA’s Electronic Orange Book provides a list of generic equivalents. As there is a lag between generic product approval and appearance in the Orange Book, consumers should also consult the FDA’s First Generics, which contains the most recent monthly approvals. As always, check with your prescribing physician on which medication is best for you.

[Janet Lubman Rathner]