It's tempting to think that all the news in health care these days is grim. Rising numbers of uninsured, health care costs continuing to climb, and seemingly no improvement in the overall health of our nationís citizens ñ the headlines donít paint a pretty picture.
Tucked away in these recent news accounts is an important trend in the other direction. In the last two years, the cost of prescription drugs is finally coming under control. The federal government says drug prices posted their lowest increase in about a decade in 2005, rising 5.8 percent for the year. That compares with 18.2 percent in 1999, when drug prices seemed to be spiraling out of control.
One of the main reasons for the slowdown, according to the Centers for Medicare and Medicaid Services, is the increasing use of generic drugs. Generics are the same as branded drugs in active ingredients, dosage and safety, but they come with a lower price tag, thanks in part to far lower marketing costs.
Generics are working for millions of patients. Studies show they are also working for Medicaid, for employers, and for health plans. As more health insurers offer incentives to patients to try generics and when their physicians consider it appropriate and the impact on rising health care costs is clear. Generics have their place, and there are cost advantages to using them.
Blue Cross and Blue Shield of North Carolina embarked on a strategy of promoting generics several years ago. One of our early efforts was to waive copayments on generic drugs for a three-month period in 2004. It worked. BCBSNC members saved $17 million on copayments during those three months, and more members opted for generics.
Based on that success, we wanted to duplicate this savings over a longer period of time. We also wanted to change the conversations that our members were having with their doctors. Our goal was simple ñ encourage members to ask their doctor if a generic alternative was right for them. Our program was simple, too - choose a generic and pay nothing.
So we decided to run a much longer program for 2006. From February through December, we again waived copayments on generics.
The results are in, and weíre pleased to report that this 11-month program was a tremendous success. For the year, our memb
e r s s a v e d $80 million in direct, out-of-pocket costs. With so many people concerned about the rising cost of health care, itís great to put real money back in our membersí pockets.
About 20 percent of members taking medications for chronic conditions such as diabetes, hypertension and congestive heart failure switched from a brand-name to a generic drug. Patients who switched will continue to save as much as $40 with each prescription, depending on their employers' drug payment tiers. Not surprisingly, this program has been very popular with our members.
It's been a wise business move as well. True, we had to pick up the cost of all those $10 copayments members normally pay. But, last year, we increased the portion of prescriptions filled with a generic drug to 58 percent on an annual basis, and even observed a rate of 62 percent for December 2006 as the program was ending. That improvement over our 2004 annual rate of 46.8 percent means that we expect to break even on the program by the end of 2007 on our insured business, and to realize considerable savings beyond that point.
We believe that our copayment program impacted conversations in physicians offices and pharmacies, making members much more aware of cost-saving choices. This is especially important given that patents for a number of popular brand-name drugs expire in the near future, providing new opportunities for our members to save money. Our copayment waiver program was only one part of our strategy to engage members in making wiser choices in their health care purchases and lifestyle choices.
We also provided electronic prescribing technology to select physicians in 2006. In 2006 these physicians prescribed more than 375,000 prescriptions electronically. In addition to the improvements in patient safety that have been noted through electronic prescriptions, we also see this as a significant opportunity to enable a conversation between patients and physicians about lower-cost treatment options such as generics.
Our efforts around generic drugs show that itís possible to find some value in todayís health care system. |
