The 2010 Drug Trend Report is out and a key finding is that Americans are not following their core pharmacy and drug purchase instincts, wasting billions of dollars. Simply stated, doctors can help the U.S. eliminate 33% of its annual pharmacy related waste by activating patients’ good intentions to improve common behaviors linked to their prescription drugs.
The study found that 82% of patients who use brand name medications actually prefer generics. Similarly, 70% of those using a retail pharmacy to fill medications for chronic conditions prefer to use a home delivery pharmacy, given the financial incentives for home delivery that are common to many plans.
A generic must contain the same active ingredients as the original formulation. According to the U.S. Food and Drug Administration (FDA), generic drugs are identical or within an acceptable bioequivalent range to the brand name counterpart with respect to pharmacokinetic and pharmacodynamic properties. By extension, therefore, generics are considered (by the FDA) identical in dose, strength, route of administration, safety, efficacy, and intended use.
The FDA’s use of the word “identical” is very much a legal interpretation, and is not literal. In most cases, generic products are available once the patent protections afforded to the original developer have expired.
When generic products become available, the market competition often leads to substantially lower prices for both the original brand name product and the generic forms. The time it takes a generic drug to appear on the market varies. In the US, drug patents give twenty years of protection, but they are applied for before clinical trials begin, so the effective life of a drug patent tends to be between seven and twelve years.
One third of the total waste, $134 billion, can be eliminated simply by making it easy for patients to act on their existing good intentions. This is equivalent to saving $434 per year for every man, woman and child in America.
Bob Nease, PhD, chief scientist at Express Scripts, the company that formed the study comments:
“Patients’ behavior is often misleading and doesn’t represent their underlying intention. Our research and experience show that most patients, when presented with a choice, make decisions that lower costs and improve their health, decisions that also are in the plan sponsor’s best interest. These findings reframe conventional thinking. The disparity in healthcare is not between what plan sponsors want and what patients want, but between what patients want and what they actually do. Optimal healthcare outcomes are possible only with an advanced understanding of behavior.”
James Klein, president of the American Benefits Council, said the groundbreaking report has significant implications for employer-sponsored healthcare:
“Activating consumer intent is a win win for employers and employees. Engaging tools that help people make decisions will lead to more cost effective quality outcomes, which is essential to health system reform.”
Overall, trend for traditional medications fell by more than half, while specialty-drug trend continued its rapid growth with a 19.6% increase. Specialty trend has had double-digit growth every year since 2004, when Express Scripts began tracking it separately from traditional trend.
Other notable trends from 2010 include 12.5% trend growth among diabetes drugs, which are poised to become the single largest driver of trend in the next several years. Meanwhile, ulcer disease drug spend dropped 13.7% as an increasing number of generics and over-the-counter options joined the class.
You can read the full report on the Express Scripts website.
Written by Sy Kraft