Thursday, December 01, 2005

Do we spend too much on brand name drugs?


Increased use of generic drugs has emerged as a major strategy to combat rapidly rising health-care costs in the last few years, and more employers are providing financial incentives such as lower co-payments in their prescription-drug plans to persuade workers to make the switch.

The most dramatic savings to be had are for generics that treat gastrointestinal problems, the substitution of which may shave $5.4 billion from costs, according to a report from Express Scripts, a St. Louis-based company that administers employers' prescription-drug benefits. The study looked at patterns of about 3 million commercially insured people using six categories of drugs.

Generics that treat stomach distress could capture as much as 95 percent of the market versus today's 31 percent, the study said. Overall, generic drugs cost $60 less on average than their brand-name counterparts.

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