WIDER COPAY DIFFERENTIALS BOOST GENERICS

APRIL 01, 2006

Generic drug substitution rates are likely to increase by 3 to 4 percentage points for pharmacy benefit plans that raise the copay differential between brand and generic drugs by $10, according to a new study of third-party benefit designs. Describing the brandvs- generic copay differential as "a key driver" for increased use of lower-cost generic drugs, researcher Jake Cedergreen said his study's findings demonstrate how "benefit design can effectively reduce drug costs by aligning the interests of the member and the plan sponsor around the low-cost prescription alternative."

To achieve what they called the "member fair share" level for drug plan copays, the researchers suggested "slightly" reducing copays for generics while increasing copays for branded drugs by the same amount. In this way, the plan can boost generic drug use without increasing costs to members.




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