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New Generic Drugs Could Lead to Health-Care Savings

Posted on: Monday, 20 February 2006, 03:03 CST

By Tampone, Kevin

SYRACUSE - Central New Yorkers, along with the rest of the nation, could be poised to reap some major savings on prescription drugs.

A rush of new generic drugs will be storming the pharmaceutical market starting in 2006, says Joel Owerbach, vice president and chief pharmacy officer for Excellus BlueCross BlueShield. During the next three years, brand-name drugs, whose sales total $10 billion to $12 billion, will become available as generics.

"We're talking about the patents running out on some major brandname drugs," Owerbach says.

"We're expecting at least seven or eight companies to be producing some of these drugs."

Pharmaceutical patents have a specific shelf life, Owerbach explains. Usually, a brand-name drug will have a period of 10 to 17 years during which the developing company has exclusive rights to it.

After that, multiple companies can begin producing the drug. Once that happens, the savings for consumers can be substantial, Owerbach says.

For example, one of the drugs set to go off patent in 2006 is Zocor, a popular anti-cholesterol drug. A month's supply of the medication currently costs $155, according to a report on generic drugs released by Excellus in December.

Once a generic version comes on the market, the price could drop as low as $20 to $25 per month, Owerbach says.

Chemically, generic drugs are identical to their brand-name counterparts, he adds.

"There's no surprises," he says. "They've stood the test of time. Many of today's generics have been the gold standard of therapy for years."

Of course, getting consumers and employees on the generic bandwagon can be difficult, says Dr. Jef Sneider, a former president of the Onondaga County Medical Society and current member of the society's insurance committee. In recent years, he explains, drug companies have become exceedingly skilled at direct marketing.

The myriad of advertisements advising patients to "ask their doctor" about drugs have had a profound effect, Sneider says.

"Some people are becoming more savvy," he says. "Most people, though, I think, are still willing to go for the mass-advertised products.

"The drug companies do everything they can to get to the patient directly. They've done very well at it."

The potential savings from generic drugs are impressive. According to the Excellus report, if all upstate New York counties filled prescriptions with generics at the rates of the best counties in the region, more than $880 million would be saved.

In Central New York, the potential savings totaled more than $289 million, according to the report. The percentage of consumers using generics varies by drug, age group, and region. Use across age groups in different Upstate regions ranges from about 30 percent to more than 70 percent.

Among cholesterol drugs like Zocor, where many popular therapies are still patent protected, the rate of genetic use can be as low as 3 percent in some regions, according to Excellus.

Sneider believes generic use will increase in the coming years. "People are starting to get topped out in what they can pay for health care," he says.

Doctors bear some of the burden of helping increase the use of generics, he says. While the first and most important concern for physicians is to prescribe the proper treatment for their patients, cost can play a role in the decision-making process.

"There are does out there who are costconscious, but a lot of does don't think about cost," he says. "They need to be encouraged by the insurance companies and their patients to consider that side of things."

For hospitals, generics are generally the preferred option, says Jay Casper, pharmacy manager at St. Joseph's Hospital Health Center in Syracuse. If there is a generic version of a drug available, it's almost always used at St. Joseph's, Casper says.

The hospital does, however, honor patient requests for brands. It also will sometimes stick with a brand name if it has been used in an emergency situation to stabilize a patient.

Occasionally, physicians will also request a brand-name drug for a specific medical reason, Casper adds.

In addition to doctors, pharmacists, and patients themselves, employers also play a role in encouraging generic use, Excellus's Owerbach says.

Excellus encourages employers to design their plans with incentives for employees who use generics, he adds.

"It's important employers have benefits that clearly enlist their employees to watch cost," he says, "It makes sense. This is something that has to involve everyone."

Copyright Central New York Business Journal Dec 23, 2005

Source: Business Journal - Central New York, The

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