Upstate New York Has Saved More Than $130 million By Increasing Use of Generic Prescription Drugs

December 18, 2006

Local savings range from $37 million in Western New York to $15 million in the Southern Tier Upstate New Yorkers reduced prescription drug spending an estimated $130 million by switching from some expensive brand name prescription drugs to safe and effective generics, according to a year-long analysis of prescription patterns released today by Excellus BlueCross BlueShield.

"Informed consumers are asking their doctors and pharmacists if there is an appropriate generic medicine to take the place of more expensive brands for their particular condition or illness, and they're getting results by simply asking the question," said Joel Owerbach, Pharm.D., vice president and chief pharmacy officer for Excellus BCBS.

The analysis was based on prescription consumption patterns of 1.3 million people living in 39 counties of upstate New York from October 2005 to October 2006 and then extrapolating the findings to the larger population of those counties. The report, titled "The Facts About Realized Savings from Generic Drugs in Upstate New York," is available online at www.excellusbcbs.com in the "Public Policy and Research" section.

The average generic prescription fill rate for the upstate population analyzed had improved from 53.8 percent in October 2005 to 60.1 percent in October 2006, an increase of 6.3 percentage points. The $130 million in savings is based on a projection of what total prescription drug costs would have been if 2006 generic fill rates had remained at 2005 levels.

"This is tremendous progress in our goal to help consumers, employers and taxpayers save money," said Owerbach. "Consumers are paying smaller co-payments at the pharmacy, and employers, workers and taxpayers should realize a savings through a slowdown in the growth of prescription drug expenses."

"While our analysis was broadly focused, we believe it's reasonable to assume that consumers saved as much as $30 million in lower co-payments right at the pharmacy counter over the past year as a result of moving from brands to generics," Owerbach said. "We also reviewed some sample Medicaid data of patients we do not serve, and we believe changes the state made to the drug formulary late in 2005 and in 2006 are containing some Medicaid costs. As a result, we felt very comfortable extrapolating the experience of members we serve to others in the community." Employers and consumers are making use of a host of free tools Excellus BCBS has prepared to educate patients and providers on the safety, effectiveness and cost savings opportunities with generics at its public Web site: go.excellusbcbs.com/generics.

The latest analysis comes a year after Excellus BCBS issued a report saying that if people in the same 39 upstate counties were to increase their generic prescription drug fill rates to match the highest performing county, the estimated annual health care savings would exceed $880 million. A new estimate for projected savings is being prepared for future release that takes into account more generics coming into the market next year.

"Generics are as safe and effective as their brand name counterparts but are generally less expensive," Owerbach said. "The increased use of generics is widely considered a way to slow the rise in health care costs. Between 17 and 19 percent of the benefits expense for a typical upstate New York health plan is pharmacy costs."

Following its first report in December 2005, Excellus BCBS set its 2006 premium rates to include anticipated savings based on what the health insurer thought could be achieved by public education and new generics coming to the market. The 2007 premium rates anticipate further increases in the generic prescription fill rate.

"The introduction of new generic equivalents to some popular brand name drugs has also helped boost the generic-fill rate," Owerbach explained. "Some of the biggest gains in generic usage, for example, were for high cholesterol drugs called statins, which had two popular drugs - Zocor and Pravachol - go generic in 2006." The report also looked at savings for other common conditions, including heartburn and depression.

"Despite this progress, we still have a long way to go in terms of truly realizing all the savings that can be had from using generic drugs," Owerbach said. "I encourage anyone who is taking brand name medication to ask their pharmacist, doctor or health care provider if there is a generic that is right for them."

Excellus BlueCross BlueShield, a nonprofit independent licensee of the BlueCross BlueShield Association, is part of a family of companies that finances and delivers vital health care services to 2 million people across upstate New York. Excellus BlueCross BlueShield provides access to high-quality, affordable health coverage, including valuable health-related resources that our members use every day, such as cost-saving prescription drug discounts and Member Rewards. To learn more, visit www.excellusbcbs.com.