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Excellus: Generics slated to hit shelves could save $714M Upstate

By Journal Staff

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New generic medications set to appear in pharmacies in 2012 and 2013 could save more than $714 million per year in prescription-drug spending in upstate New York, according to estimates released June 12 by Excellus BlueCross BlueShield.

The savings would come from patients switching to generic versions of 35 brand-name prescription drugs with expiring patents. Generics can start to appear shortly after patents expire, and costs to patients typically start to plummet in about six months, according to Rochester–based Excellus, which is Central New York’s largest health insurer.

“2012 is a big year,” says Joel Owerbach, the insurer’s vice president and chief pharmacy officer. “In terms of numbers, it is big. In terms of impact drugs, it is big.”

For 2012, Excellus tallied 26 brand-name medications with generic versions it expects to become available. A total of 449,000 users in 39 upstate counties spend nearly $731 million per year on the brand-name drugs, the insurer estimated.

Those users would cut prescription-drug spending by a total of $585 million if they switched to appearing generic versions, Excellus said.

One of the headline drugs coming off patent in 2012 is Avapro, Owerbach says. The blood-pressure prescription is used by 32,200 people in upstate New York. Annual savings of nearly $27 million would be realized if all users switched to Avapro’s generic version, irbesartan, according to Excellus estimates.

For 2013, the insurer listed nine brand-name drugs it expects to become available as generics. About 80,600 users spend almost $162 million annually on those brand-name medications. Generics could save $129.6 million per year.

Prescription-drug spending makes up between 15 percent and 17 percent of health-insurance premiums, Excellus said. Therefore, slashing spending on medications can help keep premiums down, according to Owerbach.

“It means tens of millions of dollars we don’t have to put into our premiums, so we can put out an affordable product,” he says. “If you happen to be using one of these drugs, depending on what your benefit is, you’re going to be paying less on a generic. Additionally, it makes it more affordable for employers to be able to provide drug-benefit coverage for their employees.”

A total of more than 529,000 upstate residents use the 35 drugs that Excellus expects to come out as generics by the end of 2013. Savings vary depending on the medication, but generics are often drastically less expensive, the insurer found.

 For example, patents covering the heart medication Plavix expired in May, and the generic version, clopidogrel, started making its way into pharmacies. A 30-day supply of the brand-name Plavix cost about $230, but a 30-day supply of generic clopidogrel could be found for as little as $10, Excellus noted.

About 61,700 upstate residents are on Plavix, according to the insurer. Switching them to the generic would net savings of $101.7 million per year, it estimated.

Lowering the cost of drugs can have long-term effects, Owerbach says. Patients are more likely to take lower-priced drugs as prescribed — and when they don’t skip doses, they are less likely to have serious medical issues.

“People who are compliant with statin drugs tend to have less long-term medical costs,” he says. “They don’t get as many heart attacks. That helps lower medical costs and keeps premiums low.”

Excellus is encouraging doctors and patients to consider generics. Last year, it set a target of an 80-percent generic fill rate in upstate New York.

In the insurer’s commercial business, the rate was about 77 percent in the first quarter of this year, Owerbach says. It was likely around 75 percent in Central New York, although no regional breakdown is available yet, he adds.

“We try to promote a dialogue and a conversation to continually educate doctors and educate consumers to say there are lower-cost options and alternatives,” Owerbach says. “The good news is we expect 85 percent to 90 percent of people who start on a generic will continue on a generic, because the drug works for them.”

Excellus based its estimates on data from October 2011 to March 2012 from its pharmacy-management division. Its cost-savings calculations assumed 100 percent of brand-name drug users would change to generics and that generics would cut costs by 80 percent. 

 

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