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Generics Give Vital Savings; Western New Yorkers Best at Embracing Less-Costly Versions of Name Brands

Posted on: Tuesday, 31 January 2006, 09:00 CST

In 1970, America spent 7.2 percent of its national income on health care. By 2004, it was up to 16 percent. Medicaid costs gag county taxpayers. Medicare drug plans confuse senior citizens. Health insurers prevent treatments patients think they need and deserve. Health care in 2006 seems like visiting the Bates Motel, where there's no escape.

Actually, there is a way out: Buy generic drugs.

Everyone can agree on this, except perhaps the major drug companies that profit most from brand-name prescription drugs. If you do demand FDA-approved generics -- health insurance companies can limit price hikes; patients pay less out of pocket and in co- pays; pharmacies earn more because generics have higher profit margins; doctors can get better rates of patient compliance with generics, as well as helping them save money; hospitals pay less dispensing cheaper generic drugs; employers pay smaller increases in health insurance; state programs like Medicaid cost less; and counties are charged less for their share of those programs.

This all gets into real money. In 1990, according to a study by the New York State Conference of Blue Cross and Blue Shield Plans, New Yorkers spent $2.97 billion on prescription drugs. That jumped to $9.83 billion in 2000. Spending nationwide for prescription drugs was $179.2 billion in 2003, almost 4.5 times larger than the $40.3 billion spent in 1990, according to the Henry J. Kaiser Foundation. One way or another, we all pay. But using more generic drugs is a way we can all save.

The average brand-name prescription drug costs $100 per monthly dose. Its generic equivalent -- FDA approved, chemically exact, with the same side effects and administered identically -- averages $16 a dose. Brand-name prescription drugs include the cost of research, development, advertising and free sampling that drug companies utilize.

A Kaiser Foundation report released in October revealed that in 2004, drug makers took out $12 billion in direct-to-consumer advertising and spent an additional $16 billion providing free samples of brand-name prescription drugs to doctors' offices. You pay for that by using brandnames.

Univera Health Care estimates New Yorkers could save $880 million if they all matched the current 60 generic prescriptions out of every 100 written for Western New Yorkers. The national average is about 50 percent. Further, if all New Yorkers increase that use rate by one point, they'd save another $12 million. And so on, $12 million for each point. The Congressional Budget Office reported that Americans saved $10 billion in 2005 buying generic drugs instead of brandnames at retail pharmacies.

This is also a particularly good time to switch. In 2006, some of the market's biggest brand-name drugs -- including Zocor and Pravachol for high cholesterol and Zoloft, an antidepressant -- go generic. The sedative Ambien becomes generic in 2007.

The market, too, is at work. With an estimated 72 percent of Americans now paying something for prescription drugs, they are becoming much more discriminating than when insurance covered 100 percent of their drug costs. The perception is it's "their" money, so the motivation is greater to "save" money.

But aren't brand-name drugs -- promoted as they are on television with models, music and bucolic scenes -- superior? No. Generic drugs, which are simply brandnames whose patent rights ran out, are equal to brandnames or better. In 20 years, only one generic drug was pulled from the market due to safety issues, while 16 brand- name drugs (remember Vioxx, Bextra and Baycol) were pulled in the last 10 years for safety concerns. Generics also cost less because of competition among makers of generics, as opposed to name brands' exclusive, monopoly manufacturers.

A month of heartburn treatment Prevacid costs $154, but its generic equivalent is $48; high cholesterol drug Zocor costs $155 a month, but just $30 as a generic; Prozac, for depression, is $105 a month, but just $5 in generic form.

Generics aren't for everyone and potency can become an issue. But most patients should at least ask for them and try generics first. Several Western New York companies promote and reward greater employee use of generics.

Research shows 70 percent of patients who start with generics stay with them. And doctors should think twice about dispensing free samples of brandnames they receive from drug salespeople since the freebies are designed to get patients in the habit of using that name brand.

Consumers, taxpayers, businesses and governments benefit from this shift to generics. It's good knowing that in so doing they're helping to take control of this nation's runaway health care costs.

Source: Buffalo News

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