By Carol Taylor
Employee Benefits Advisor
D&S Agency, a United Benefit Advisors Partner Firm.
Several years ago, I went to the doctor for a sinus infection. While waiting for the doctor to return with a prescription, I happened to look over and notice that every jar, pen, notepad, etc. on the counter had the name of a recently released brand name antibiotic. Sure enough, when the doctor returned, it was for that particular drug. I asked the doctor what the cost of the drug was, since I was covered under a high-deductible health plan (HDHP) and would be paying the full cost. When he responded that it would run about $360 for six pills, I immediately demanded a generic prescription. The generic drug was less than $15 and took care of the infection. To add insult to injury, no one knew at the time, but the brand name later was found to have some unknown side effects -- several people died, and the drug was “black-boxed” by the FDA shortly thereafter and removed from the market. I was quite glad that my frugal side had taken over when I read that in the news.
What’s my point? The newest drug on the market may not be the best thing for you!
At nearly every medical plan enrollment meeting, we hear the question: “Are generics really as effective as brand names?” What many don’t realize is that the active ingredients in a generic drug are the same as the brand name drug. The difference between brand name and generic lies in the non-active ingredients. Each manufacturer of a generic may use different inactive ingredients, so if one does not work, another manufacturer’s product might.
Will the generic work just like the brand name? Not necessarily. Everyone’s chemical make-up is different, so the inactive ingredients may cause an issue for you. At the same time, not every brand name will work for everyone either.
The most noticeable benefit to you for taking a generic drug over the brand name, however, is the COST! In my example above, the difference was $245, but on some more expensive drugs, say for heart disease or cancer, the difference can be thousands of dollars! Another way generics can save you money – in some cases significantly -- is through your insurance coverage.
According to the 2013 UBA Health Plan Survey special Pharmacy Report, 27.9% of employers surveyed are now using a four-tier drug plan -- up 11.5% since 2012. That fourth tier pays for biotech or the highest cost brand name drugs. This usually requires significantly higher copays, or costs are completely out-of-pocket until the major medical deductible has been met, and then you still face a copay or coinsurance. The survey data shows that the median pharmacy retail copays for fourth-tier drugs increased by 25% from $80 in 2012 to $100 in 2013, and many are charging between 10% and 30% of the cost of tier four drugs.
Another strategy employers and insurance carriers use to control pharmacy costs is to place generics before the deductible and brand names after – creating further incentive to give generics some serious consideration.
A lesser-known, but even more significant, benefit is that generics are rarely taken off the market due to side effects. The newest drug on the market has not had that test of time, and all side effects may not be known when the drug is released on the market. Since a generic, at minimum, has been around for at least seven years, the side effects are known.
The point that we like to drive home in those enrollment meetings is this: Don’t hesitate to ask your physician for a generic drug. It might very well save your life, and will certainly save you money. Generics have stood the test of time; it is a very rare occurrence when a generic is pulled from the market. Plus, you may have the added benefit of a significant cost difference.
If you really must take a brand name drug, at least do a quick search online about it. Read the known side effects from the manufacturer’s website and see if any headlines come up about it. Also, if you are taking any other medications, make sure the pharmacist knows about those and can ensure that a newly prescribed drug won’t cause adverse interactions.
Employers interested in finding out the latest trends in pharmacy benefits strategies should download a copy of the 2013 UBA Health Plan Pharmacy Report at http://bit.ly/1cA6PMW.