Generic Drugs Create Significant Cost Savings

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Generic drugs and mail-order systems can save health plans money since brand name drugs generally cost 50 percent to 70 percent more than generics.

The Kansas City Star reports on one of the nation's largest pharmacy distribution and marketing operations: "Prescription Solutions, a UnitedHealth Group company, sells to about 10 million consumers through 64,000 retail network pharmacies. State-of-the-art equipment at the Overland Park facility and at the company's other distribution center in Carlsbad, Calif., helps ensure exact dosage and accurate prescriptions, along with computerized tracking of consumers' orders - all of which speak to quality, she [Jacqueline Kosecoff, chief executive of Prescription Solutions] said." Prescription Solutions also "advocates health reform that would allow consumers to have more choices in their benefit plans - another possible cost saver." And whatever health overhaul legislation comes out of Congress, Kosecoff said, "the growth curve for Prescription Solutions will continue. Revenues grew from $1.6 billion in 2005 to $12.5 billion in 2008." Medicare Part D triggered some of the growth, but the increasing ranks of Medicare and Medicaid consumers also contributed (Stafford, 9/14).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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