Employers Can Save When Pill Patents Pop
Many of today's headlines on U.S. health care paint a pretty gloomy picture for consumers and employers. Skyrocketing medical costs, high obesity rates and new compliance hurdles are some of the most common depressants.
Luckily, one recent topic offers a bit of good cheer for employers: Some drug costs are poised for a big decline.
Over the next 14 months, the patents on two popular prescriptions -- Lipitor (cholesterol) and Plavix (blood thinner) -- are set to run out, which means cheaper generics will hit the market soon, the Associated Press reports. About 4.3 million Americans take Lipitor, while 1.4 million fill prescriptions for Plavix, the report said.
The savings windfall doesn't stop there. The patents for nearly 120 brand-name drugs are set to expire over the next decade, according to Medco Health Solutions Inc.
In 2010, the average generic drug option cost $72 compared with $198 for the average brand-name prescription drug, according to Wolters Kluwer Pharma Solutions. A separate IMS Health study noted that the average copay for a generic prescription last year was $6 versus $24 for a brand-name option with preferred status from an insurer, the AP reported.
All those expiring patents can translate into significant savings for employers -- provided their employees can actually get the generics. While many patients and pharmacists are squarely on the generics bandwagon, many doctors insist on sticking with the brand names, according to The Washington Post. The report cites a recent American Journal of Medicine article that notes that nearly 5 percent of a sample of 5.6 million prescriptions by U.S. doctors were submitted as "dispense as written" -- which means pharmacists can only supply the specific brand of drug designated by the physician.
The reasons: Some doctors still don't trust generics, according to a survey by the Annals of Pharmacotherapy, which showed that half of polled physicians still harbor at least some negative view about the quality of generics. Also, brand-name recognition and habit come into play, according to the Post report.
Fortunately, employers can take advantage of another trend that can cut costs even on brand-name options, according to a report in Human Resource Executive Online. A recent Buck Consultants survey found that nearly 57 percent of employers are using pharmacy benefit managers (PBMs) to handle their prescription drug plan, and many companies are enjoying new leverage thanks to a growing number of PBMs that are popping up to serve the surging demand.
"Strong competition among PBMs for employer business has created a buyer's market for PBM pricing, and we expect this competition will intensify as health care reform is implemented," Michael Jacobs of Buck Consultants told HREO. "Therefore, employers can be aggressive in their negotiations with PBMs."
Jacobs suggested that employers look beyond price and take time to choose the best PBM for their company.
"A PBM has to be flexible to meet your needs," Jacobs told HREO. "A one-size solution may not be right for you."