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Generics Underused, Despite Potential for Substantial Health Care Cost Savings

Despite their proven reliability in safely reducing health care costs, many consumers continue to
have doubts about the use of generic drugs. Communications programs that increase employees'
knowledge about generics and their comfort level in speaking with prescribers about generic
medications can help to overcome these doubts, increase use of generics in a health plan and,
ultimately, result in substantial cost savings.

Data on consumers' limited knowledge of generic drugs comes from a survey from Prescription
Solutions, a UnitedHealth Group company. Among the surveyed adults, 31% did not know or did
not believe that generics have the same active ingredients and same effectiveness as brand- name
drugs. Furthermore, two- thirds did not understand the actual cost difference between generic drugs
and brand- name drugs; on average, a brand- name drug costs 50%-70% more than its generic
counterpart. A separate analysis from the Food and Drug Administration (FDA) indicates that drug
costs per day can fall by 14% to 16% if an individual uses generics instead of brand- name drugs,
depending on the individual's medical needs. Individuals who can fully satisfy their medical needs
with generic drugs can see as much as a 52% reduction in their daily medication costs, according to
the FDA analysis.

Consumers' reluctance to try generics is especially surprising, given that a majority of the
Prescription Solutions survey respondents-71%- remain concerned about prescription drug costs,
and 27% have either delayed filling, not filled, or not taken a prescription as prescribed in an effort
to save money.

The survey also found that doctors and pharmacists are the key influencers in encouraging the use
of generics. Of those surveyed who take generic drugs on a weekly basis, 64% said their doctor
recommended the generic and 43% said a pharmacist recommended the generic. Of those
surveyed who do not take generic drugs on a weekly basis, 58% said they would if a pharmacist
brought a generic to their attention as a less expensive yet identical substitute, and 52% said they
would do this if their doctor made the recommendation.

As noted at the beginning of this article, communications programs that increase employees'
knowledge about generics and their comfort level in speaking with prescribers about generic
medications can address misconceptions and concerns about generic drug use. A study published
in the March 2009 issue of the journal Medical Care found that generic drug use was most closely
associated with communications with providers about generics, and with an individuals' comfort
level with generic substitution, leading to the conclusion that educational campaigns that focus on
these two areas may be most effective in influencing generic drug use.

To increase individuals' comfort level with generic substitution, an educational campaign should
stress the key facts about generics:

-Although generics may differ in appearance from their brand- name counterparts, they have
the same active ingredients and adhere to the same FDA standards.

-Generic medications cost less, not because they are of a lesser quality, but because the
manufacturer of the generic has no research and development costs to recover, and also
spends no money on promoting the product to physicians and consumers.

-Plan design, too, can encourage generic use. Plan designs that require a higher member
copayment for a brand- name drug than for the generic substitute can lead to higher generic use, as
can completely waiving the copayment for generics (or for certain classes of generics).

-Generic use also can be increased through mail- order programs.

Overcoming ignorance or unawareness of the true nature of generics can reap savings for an
employer, making the money spent on communications and education a worthwhile investment.