Stress Remedy

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How to Save Many Billions on Medication

How Solving the Brand/Generic Controversy Can Help Save Healthcare

pills and moneyThe bad news: with the exception of the biopharmaceuticals, there have not been a lot of real breakthroughs in medicines lately. The good news: with the exception of the biopharmaceuticals, there have not been a lot of real breakthroughs in medicines lately. How can the good and bad news be the exact same news?

Of course, it would be better news if there were a lot of recent advancements with whole new classes of medicines. But as it turns out, most new medicines are what might be called "me too" drugs - that is, similar to drugs already on the market. Where bad news also becomes good news is when it comes to saving money. Over the past several years, I've been impressed that most all of the major classes of medications have generic options. Every week it seems more patents expire and medications become generic and about six months after becoming generic the price drops dramatically. Often a brand name medication costing $150 soon becomes a generic selling for under $10.

Now pharmaceutical companies don't give up profits without a fight. Often, soon before a medication goes generic, they'll try to modify the drug just a tiny bit to have something new to sell. Then the pharmaceutical representatives speak to physicians in an effort to convince them that this very small change is worth ten times the price of a generic product. The companies also advertise in magazines and on television encouraging people to ask their doctors for the brand name medication.

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There are certainly times when a brand name medicine has important advantages over similar generic medication. However, many times the advantages are not significant. More often then not, the companies do not do head to head studies showing the superiority of their product (perhaps because they don't want to risk proving that their brand drug is no better than other cheaper generic medication in that class).

In order to encourage patients to ask for generic products, insurance companies typically charge higher copays for brand name medicine. So now pharmaceutical companies have started giving coupon books to offset the higher copays. Nevertheless, the healthcare system typically still pays much more for the brand name medicine.

When it comes to the biopharmaceuticals, the good and bad news is a little different. The good news is that there have been a slew of new biopharmaceuticals over the past decade. The bad news is that virtually none of them have generic equivalents and they are much more expensive than conventional medications (as in thousands of dollars a month). Even when people have insurance, at times it is difficult to afford the copays for these medications. Fortunately, most people do not require biopharmaceuticals.

What can we do to maximize the "good news" and minimize the effect of the "bad news"?

1. Education: Both doctors and patients need education to offset advertisements from pharmaceutical companies. Many times the theoretical advantages of a brand name medication don't translate too much of a real advantage. If patients just believe in what they hear on television commercials, they will be mislead. If physicians just believe what they hear from either pharmaceutical representatives or from talks sponsored by pharmaceutical companies, they will also be mislead. Unbiased research and education are vital.
2. When brand name medications are needed, often there are several alternatives that are equally efficacious. The new health care reform proposals talk about both public and private insurance options. What if the public option and private insurance companies bargained as a unit to get the best drug prices. A pharmaceutical company would cut quite a bargain if its medication was recommended as the first brand to try for a particular disorder. Would this interfere with my autonomy as a physician? Perhaps, but actually less so than what is happening now. Now each insurance company strikes its separate deals leaving physicians trying to keep track of perhaps ten or twenty different formularies. Having more uniformity would actually make our jobs easier (and potentially save billions of dollars).
3. Right now doctors are drowning in paper work. If a certain brand name is indicated, the pharmacies could track the medications already tried so no authorization form would be needed.
4. For biopharmaceuticals the problem may be more difficult to solve. Some of them have several medicines in a class. In those cases, negotiation would be easier. For the more unique products, it seems a larger entity should be able to negotiate a deal similar to those other Western nations have obtained.

There are times when the right medicine to use is a branded product. However, the large influx of new generic medications can help significantly decrease health costs. When making medication choices, unbiased education and research are vitally important. Additionally, if a cooperative of private and public insurance companies bargained with pharmaceutical companies, it could save billions of dollars and decrease physician paperwork and confusion.

 

Jay Winner, M.D. is the founder of the Stress Reduction Program at Sansum Clinic and the author of Take the Stress Out of Your Life.

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