Patients prescribed a branded drug instead of an equivalent generic spent an estimated $24.6 billion in excess costs between 2010 and 2012.
Patients prescribed a branded drug instead of an equivalent generic spent an estimated $24.6 billion in excess costs between 2010 and 2012, according to recent study results published in JAMA Internal Medicine. The investigation sought to calculate the potential impact of therapeutic substitution— when a brand name drug is substituted for a generic within the same class but with different chemical compounds—on potential savings for patients and the US health system. Researchers analyzed Medical Expenditure Panel Survey data from 107,132 patients, along with their reported prescription use, between 2010 and 2012. They included drug classes that, in a given year, had a generic or a widely accessible OTC medicine and a brand name drug without an available chemically equivalent generic in the same class.
Of the total $760 billion spent on prescriptions between 2010 and 2012, money spent on branded drugs when an in-class generic was available totaled $73 billion (9.6%), and investigators determined that patients were saddled with a significant portion of the excess costs. Total out-of-pocket spending from using branded drugs instead of generics was $24.6 billion. Notably, certain drug classes accounted for the vast majority of overall excess branded spending, including statins, atypical antipsychotics, proton pump inhibitors, selective serotonin reuptake inhibitors, and angiotensin receptor blockers.
“There was a large amount of excess expenditure on branded drugs between 2010 and 2012 in classes that could have incorporated therapeutic substitution,” the authors concluded. “Although therapeutic substitution is controversial, it offers a mechanism to decrease drug costs if it can be implemented in a way that does not negatively affect quality of care.”
Therapeutic substitution is considered by many to be a controversial topic due to concerns relating to efficacy, adverse effects, drug interactions, and different indications for drugs despite being in the same class. In an accompanying JAMA editorial, however, Joshua M. Sharfstein, MD, and Jeremy Greene, MD, PhD, postulate that a lack of education on generics is the major underlying issue.
“Payers and clinical organizations interested in improving the value of health care should take additional steps to improve physician and patient understanding of generic drugs,” they suggested. “This work is not easy—it requires close collaboration between physicians and pharmacists—but the financial savings will be large,” forecasts Joseph S. Ross, MD, MHS, in a separate JAMA editorial.
On a broader scale, a lack of effective communication between prescriber, pharmacist, and patient may be at the heart of the battle between generics and brand name drugs—a recurring theme when considering many issues facing the health system today. Weak coordination notwithstanding, study author Michael E. Johansen, MD, MS, told Pharmacy Times that the goal should always be for health providers to promote getting the right drug to the right patient at the right time. “Essentially, it should be easy and incentivized for a clinician to prescribe the most cost-effective medication, which, at present, is rarely the case,” he asserted.
In the meantime, Dr. Johansen said pharmacists are well positioned to empower patients with information regarding their medication options. “A pharmacist could discuss with patients how there are much cheaper medications available in the same drug class that are FDA-approved for the same indication,” he said. “[But] in the future, I’d like to see pharmacists and physicians have closer collaboration to ensure patients are getting the most effective drugs at the lowest cost.”
Generic drugs currently make up more than 88% of all prescriptions filled in US pharmacies, and they have provided almost $1.7 trillion in health care savings over the past decade.