This is good:
Insurers: Price is right for generics
They want patients to try cheaper versions of drugs
By Bruce Japsen
Tribune staff reporter
September 17, 2006
When Ray Metz went to see his doctor for his high blood pressure earlier this year, he was not surprised to get a free drug sample. Only it wasn't a well-known brand.
Instead it was a generic drug by the name of Lisinopril, a copy of the more expensive and better-known Zestril.
"The generic samples were given to me, and the price was right," said the 45-year-old psychiatric nurse from Pittsburgh. "I don't see any more reason to use an expensive brand with health-care costs the way they are. The cheaper prices, the better."
Welcome to the new front in the multibillion-dollar war to get drugs in the hands of consumers.
As a hospital nurse, Metz has seen dozens of perky drug sales representatives file into the hospital where he works, armed with pens, notepads and, most important, satchels of brand-name drug samples.
Now private insurers are taking a page out of the brand-name pharmaceutical industry's marketing playbook.
They are showering consumers with free generic drug samples, waiving co-payments and marketing directly to consumers in doctors' offices, where brand-name drug salespeople are omnipresent.
They are there to encourage the use of cheaper, generic prescription drugs.
The pharmaceutical industry spends billions on food, trips and other perks for doctors and staff to encourage them to prescribe the latest in brand-name pills. Their campaigns almost always include free brand samples delivered to doctors so they can pass them on to consumers.
Because the makers of low-priced generic drugs employ virtually no such sales army, doctors are more likely to write prescriptions for the latest, most expensive brands, which critics blame for escalating the nation's drug tab.
But now, health insurers are fighting back in a way that consumers can appreciate.
In addition to eliminating co-pays, health plans are paying to install ATM-like machines in medical offices that allow physicians to dispense up to 30 days of free generic medication. The machines automatically track what has been used and send an alert when they need refilling. Before, doctors gave away brand-name drugs provided by pharmaceutical sales reps who stop in regularly to replenish supplies.
Patients like the chance to try the generic and see if it works for them, said Dr. Andrew Sullivan, a family physician at PennCare Yardley Medical Center in Pennsylvania.
Sullivan has had a generic drug dispenser in his office for nearly five months.
Change in thinking
"They like to take generics for a test drive. They also don't have to pay their $50 co-pay to see if they work," Sullivan said, adding that he thinks the machines' presence helps balance a doctor's thinking.
"When you have seen so many drug reps and you're hit all of the time with their pitches, it takes some time to change the way you think," Sullivan said. "You are hearing all of the [brand] drugs mentioned all of the time. There is no way to advocate for the generics because there are so many manufacturers making them, so it is nice to be able to have the generic samples in the office and be able to have it on the radar."
The aggressive campaign by health plans comes as a large number of branded drugs are coming off patent protection and face unprecedented vulnerability to generic competition.
This year alone, drugs representing an estimated $20 billion in brand-name sales lose patent protection--including blockbusters such as the cholesterol pill Zocor and the antidepressant Zoloft.
Both drugs, perennially among the Top 10 in generating consumer and health-plan prescription costs, have become available in generic form. Next month the cheaper copy of popular sleeping pill Ambien is expected to be available in a generic.
Insurers are not only hoping to get patients to use the copy, they are also trying to woo patients taking similar medications in the same class of drugs. For example, plans would like to see someone taking an antidepressant other than Zoloft try the new generic to see if it works for them.
Even getting a small number to shift can reap big benefits to the bottom lines of private insurers and employers.
"A 1 percentage point movement in generic dispensing can result in a 1 percent drop in drug spending," a spokesman for pharmacy benefit company Express Scripts Inc. said.
Because these blockbuster brands and rivals in their classes are so widely used, they cost consumers $3 to $5 a pill. That's often 30 percent to 50 percent more than generics, depending on the drug.
Among cholesterol drugs known as statins, sales last year were $16 billion in the U.S., and about one-third of those drug sales came from two brands, Zocor and Pravachol.
In addition, consumers with drug coverage could save up to $300 a year per prescription--the $20 or more a month co-pay difference between brand and generic--by taking health plans up on their offers of free generics and waived co-pays.
Some of the nation's biggest insurers, such as Aetna Inc. and Wellpoint Inc., which does business in Chicago as Unicare, are offering such deals to encourage switching.
Health plans such as Blue Cross and Blue Shield of Illinois are trying to achieve the same thing by stepping up direct-mail marketing of generics to consumers to combat direct-to-consumer ad spending on television and magazine ads by brand-name drugmakers.
"This year is so important because of the number of blockbuster drugs that have become available as generics," said Dr. Stanley Borg, chief medical officer for Blue Cross and Blue Shield of Illinois.
"This really is a landmark year in the numbers and the utilization that the generics have become available," he said.
Generics are medically identical to the brand-name drug they are copying. But insurers also encourage switching from other brands in the same class, despite protests from brand drugmakers who claim clinical differences and variances from patient to patient.
The makers of cholesterol brands Crestor and Lipitor, for example, tout benefits over the generic form of Zocor, citing their own studies and patient experiences.
The brand-name drug industry provides free samples valued at more than $15 billion annually in the U.S. and spends an additional $7 billion each year on marketing to doctors in their offices, statistics from market research firm IMS Health show.
The makers of generics, trying to keep costs low, spend little on marketing.
"Generic drugs have no real estate in the physician's office," said Rob Seidman, Wellpoint's chief pharmacy officer. Doctors use samples to provide their patients with the ability to walk out the door with an instant treatment. With in-office kiosks of generics, doctors suddenly have the choice of offering a brand name or generic.
Program expanded
Aetna is expanding a program that began last year of putting generic drug dispensing machines in doctors' offices that allow physicians to provide 30-day supplies of generics to their patients. Depending on the physician's specialty, a machine could have about two dozen different products that treat 10 or more conditions.
Typically the generics stocked are for widely prescribed conditions such as arthritis, high cholesterol, diabetes or high blood pressure.
MedVantx Inc., a San Diego-based company that supplies nearly 20 health plans, including Aetna, says more than 1,800 doctors in seven states are providing generic drug samples with its machines.
Illinois is not one of them, but Aetna and MedVantx are not ruling out an expansion here.
MedVantx's chief executive officer, Rob Feeney, said the concept "is just getting going . . . to create a level playing field for generics at the point of care vis-a-vis the branded pharma model."
But health plans have their work cut out for them. The pharmaceutical industry's army of sales representatives for brand-name drugs has mushroomed to more than 100,000 in the U.S.--one for every seven practicing physicians. That's nearly triple the number compared with just a decade ago, according to market research firm Verispan.
On another front, Aetna and Wellpoint this month are rolling out generic programs in an attempt to sway their health-plan members to choose the generic form of Zocor (Zocor lost brand patent protection in June) instead of other popular brands. Aetna will soon implement a program that waives co-payments for health-plan members for six months for patients who choose generic Zocor, known under the name Simvastatin, over brands like Lipitor, Crestor and Vytorin.
Any Aetna health-plan member who had been paying a co-pay, typically around $10, will not have to pay it for six months. The savings difference between brand co-payments and no co-payment would be $20 to $50 a month, depending on the Aetna member's plan.
Wellpoint, too, is targeting consumers with free generics and waived co-payments for certain highly prescribed drugs for which there is an equivalent generic. Wellpoint said cholesterol drugs are this year's priority but other drugs also qualify in the program.
Wellpoint waives a health-plan subscriber's co-payment for the first prescription filled at the retail pharmacy and the first mail-order pharmacy prescription for the same drug. Because mail-order prescriptions are typically in 90-day supplies, Wellpoint subscribers may be able to "obtain a four-month supply of select generic drugs at zero dollars co-pay," a Wellpoint spokesman said.
Neither Wellpoint nor Aetna would disclose how much they are spending on generic sampling and the waived co-payments, but both say it is a "fraction" of what the brand industry spends on marketing. That could hinder their efforts .
"Our piece is a fraction of what the brand-name industry spends but is a focused spend," Eric Elliott, Aetna's head of medical related products, said. "This is not a silver bullet and not the program that is going to change the world. But we are trying to change the prescribers' habits."
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bjapsen@tribune.com
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