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Favor Equally Effective Drugs that are Less Expensive

As NLARx reports, generic drugs cost $45 less on average than brand name drugs.  Over the next 4 years, numerous brand name drugs which account for $38 billion worth of sales are going to lose their patents, meaning generics will flood the market - and making this a good time to enact policies to promote their use, such as:
  • Preferred Drug Lists (PDL): States can reduce drug costs by prioritizing drugs proven to be safe, highly effective, and typically less expensive inexpensive over more expensive yet no more effective brand name drugs.  As Prescription Policy Choices (PPC) reports, at least 40 states have some sort of PDL policy regulating physicians' prescribing practices.  Maine's PDL has kept Medicaid drug cost increases to below 3% annually. During the same period, the federal government saw increases of 13%.  Texas' PDL saved the state's Medicaid and SCHIP programs $116 million in 2007.
  • Promoting Generics: Massachusetts saved more than $150 million annually by emphasizing generics over brand name drugs, and Texas saved $223 million by making it easier for doctors to prescribe generics.  Medicaid and other public programs should require that, when available, equally or more effective generics must be prescribed over more expensive celebrity drugs, except where a treating physician overrules this requirement. 
  • Evidence-Based Prescribing: The Drug Effectiveness Review Project is a public and private collaboration that compares and reports on the effectiveness and safety of drugs designed to treat similar conditions.  This program is used by at least 13 states' preferred drug lists.

Resources:

Prescription Policy Choices - Model Policy: Preferred Drug Lists, Prior Authorization, and Promoting Generics
Oregon Health and Science University - Drug Effectiveness Review Project

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Favor Equally Effective Drugs that are Less Expensive

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