A modest increase in upstate New York’s generic fill rate can bring major health care cost savings

Annual health care spending in upstate New York can be reduced by $500 million to $1 billion by increasing the percentage of all drug prescriptions that are filled with a generic by just a few points, according to a new fact sheet issued by Univera Healthcare.

“Last year in upstate New York, 72.1 percent of prescriptions were filled with a generic,” said Joel Owerbach, Pharm.D., vice president and chief pharmacy officer, Univera Healthcare. “Increasing that rate to 75.8 percent, which is the percentage in the combined Western New York and Finger Lakes region, would reduce annual health care spending by $500 million, and raising it to 80 percent would reduce health care spending in upstate New York by $1 billion.”

Raising the generic fill rate from the current 75.8 percent in the combined Western New York and Finger Lakes region to 80 percent, would reduce annual health care spending in the region by an estimated $315 million.

“At first glance, raising upstate New York’s generic fill rate from its 2010 level to the 75.8 percent benchmark that represents the upstate New York area with the highest generic fill rate may seem ambitious,” Owerbach noted, “but it’s by no means impossible.”

A historic overview of generic fill rates in upstate New York detailed in The Facts About Opportunities to Save With Generic Prescription Drugs shows that the generic fill rate has steadily risen in every upstate New York region between 2005 and 2010. In the combined Western New York and Finger Lakes region, for example, the generic fill rate grew from 56.7 percent in 2005 to 70.7 percent in 2008 and 75.8 percent in 2010. For the first eight months of 2011, the generic fill rate in the combined Western New York and Finger Lakes Region stood at 77.8 percent.

The upward trend in upstate New York’s generic fill rate is accompanied by another up shift — in the share of generic prescription drugs as a percent of all prescriptions written by physicians in upstate New York. Generic medicines represented 52.5 percent of all prescriptions written in 2005; the number was 72.1 percent in 2010. Brand-name drugs now make up a smaller portion of all prescriptions written in upstate New York (27.9 percent in 2010).

Some of the savings achieved through the growth in generic prescribing is offset by yet another turn, which reveals that the average cost of a brand-name drug has risen 73 percent during the past five years (from approximately $120 in 2006 to $208 in 2011) and 12 percent in the past year. Generic medicine costs, by contrast, on average decreased by 7.5 percent (from $19.63 in 2006 to $18.16 in 2011).

“Even though the cost of brand-name prescription drugs is higher, no less than 42 brand-name drugs either have or will become available as generics in 2011 and 2012,” pointed out Owerbach, “which easily can mean a 2-point to 4-point increase in the upstate New York generic fill rate.”

This year, the largest potential long-term prescription drug savings will come from LipitorÒ, used to treat high cholesterol, which has 154,000 users in upstate New York. “When generic atorvastatin became available on November 30, 2011, that alone was expected to eventually offer an estimated $162.5 million annual savings opportunity,” said Owerbach.

In 2012, the largest potential long-term savings will come from PlavixÒ, which has 80,000 upstate New York users, and SingulairÒ, with 102,000 users. Added together, generic versions for these popular brand-name prescription drugs will save upstate New Yorkers more than $200 million annually.

“The fact that these three blockbuster prescription drugs already have or soon will be available as generics will certainly help move us toward the 80 percent generic fill rate mark,” commented Owerbach. “I believe greater public acceptance of generics and acknowledgement of their savings potential will also help fuel the trend.”

The Univera Healthcare report details specific action steps that upstate New Yorkers can take to bring the generic fill rate to 80 percent and thereby help save residents $1 billion in health care costs. Recommendations include:

· If you’re a health care consumer: Asking your doctor, pharmacist or nurse practitioner whether a generic drug alternative or option is right for you.

· If you’re a physician, member of a physician group or work in a hospital: Avoiding or reducing the use of brand-name drug samples, prescribing generics when appropriate and using e-prescribing to help identify lower-cost medications.

· If you’re an employer or belong to an employer coalition: Providing an employee drug benefit design that offers incentives to use lower-cost generics, helping people understand the value of generics, distributing informational materials and fostering community discussions on the importance of generics.

· If you’re a pharmacy: Frequently discussing generics with patients, alerting patients and physicians when new generics are available, working with patients and their prescribers to identify generic options and alternatives and providing low-cost generics programs where feasible.

· If you’re a health plan: Educating the community on the value of and savings opportunities available with generics; creating tools for employers, physicians and members to promote the use of generics; offering incentives for generic drug use through benefit design, copay differences and free generic trial programs; sending reminders and action plans to members who have opportunities to save with generics.

Univera Healthcare has educational materials and resources, including a consumer reference guide that lists available generic drug options for a variety of common conditions, available on its website, UniveraHealthcare.com. The reference guide is available at go.UniveraHealthcare.com/generics under “Tools and Resources.”

Univera Healthcare is a nonprofit health plan that is part of a family of companies financing and delivering health services for more than 1.8 million upstate New Yorkers. Based in Buffalo, the health plan serves more than 145,000 members across the eight counties that comprise Western New York.

Learn more about Univera Healthcare:

On the Web at http://www.univerahealthcare.com

On Twitter at http://www.twitter.com/Univera_WNY

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