Low-Cost Generic Drug Use Grows Among Privately Insured Adults

Significant low-cost generic program use is likely to be underrepresented in administrative claims data.

Pharmaceutical research and quality assurance programs rely heavily on managed care administrative claims data on prescription drug use.

The comprehensiveness of these data has been gradually compromised, however, by the growing prominence of low-cost generic programs (LCGPs), according to a study in the Journal of Managed Care & Specialty Pharmacy.

In the United States, the first LCGPs emerged in late 2006, with Kmart offering 90-day supplies of some generics for $15 and Walmart providing 30-day supplies for $4. Today, 8 of the top 10 chain pharmacies offer their own low-cost generic programs, including Target, Publix, Walgreens, and CVS, the study noted.

The pricing of LCGP offerings means that for many individuals, paying out-of-pocket costs less than the drug benefit copay of $10 to $20. As a result, many individuals purchase generic prescriptions without ever filing claims, and their use of those pharmaceutical agents remains undocumented in managed care claims data.

This has potentially significant ramifications on research and quality assurance, as previous studies estimate that 20-30% of privately insured adults take advantage of LCGPs.

The researchers studied the prevalence of LCGP use to determine to what extent it may lead to medication exposure misclassification in claims data. Their additional objectives were to assess patterns of LCGP use and to compare clinical and demographic characteristics of LCGP users and nonusers.

Prescription Drug Fills at the Pharmacy Level

This study used a nationally representative cohort of 19,037 privately insured adults aged 18 to 64 years who participated in the Medical Expenditure Panel Survey (MEPS) from 2007 to 2011. MEPS captures prescription fills at the pharmacy level, regardless of whether or not a claim is filed.

Out-of-Pocket Costs and Generic Drug Programs

LCGP purchases were identified by 2 criteria: out-of-pocket payment of the total cost and cost matched to LCGP formularies available from major chain retailers.

MEPS data were used to assess pharmaceutical use for each individual for each year of the study period (2007-2011), and LCGP use was recorded as a binary variable for each individual. By design, this study did not capture use of over the counter medications.

Demographic characteristics of interest included age, gender, race, employment status, marital status, family income, education level, residence in a metropolitan statistical area, prescription drug coverage, geographic region, comorbidities, and number of unique prescription medications and prescription fills.

Chi-square and t-tests compared groups of LCGP users and nonusers. Factors associated with LCGP use were identified by multivariable logistic regression.

The Growth of Low-Cost Generic Drug Programs

Applying survey sampling weights in MEPS, the total study cohort of 19,037 was estimated to represent over 94 million privately insured adults in the United States. The researchers found 36.4% (n = 6921) of participants were identified as LCGP users, weighted to represent about 34 million LCGP users annually.

Prevalence of LCGP use was observed to increase every successive year of the study period, from 21.5% of individuals in 2007 to 35.2% of individuals in 2011. The last of the overlapping panels of participants (2010-2011) showed the greatest proportion of LCGP use: 46.9%. Although the prevalence of LCGP use nearly doubled, total prescription use per person remained relatively stable.

Over 10% of all prescription fills were through a LCGP. About 42% of all LCGP fills were for cardiovascular medications, 14% were for levothyroxine, and 12% were for antidiabetics. LCGP accounted for 18.9% of all warfarin fills and more than 30% of all fills for antigout, metronidazole, angiotensin-converting enzyme inhibitors, levothyroxine, metformin, and diuretics.

LCGP users tended to be older, had higher Charlson Comorbidity Index scores, filled more unique prescriptions, and used more unique medications. Compared with a reference category aged 18-34, adults aged 35-54 had an adjusted odds ratio (AOR) of being a LCGP user of 1.39 (95% CI = 1.29-1.50) and adults aged 55-64 had an AOR of 1.86 (95% CI = 1.70-2.04).

Interestingly, individuals with prescription drug coverage were nearly twice as likely to use a LCGP as those without drug benefits. Other significant predictors of LCGP use were female gender, higher income, and region. The regional areas, in order of greatest proportion of LCGP use weighted for the national population, were defined as South (38.1%), Midwest (23.3%), West (21.3%), and Northeast (17.5%).

Implications for Generic Medication Benefit Structures

There is a high and potentially growing rate of LCGP use among privately insured adults in the United States. LCGP use is most prevalent among older patients with chronic comorbidities who use a greater number of prescription medications.

Out-of-pocket LCGP use unrecorded in claims data leads to misrepresented medication exposure that can compromise the reliability of research and quality assurance programs. Those conducting claims-based research or quality assurance should account for this effect in sensitivity analyses. Managed care organizations should consider adjusting their reporting requirements or generic medication benefit structures to more effectively capture all prescription medicine exposure.