Plan designs that encourage the use of generic drugs over brand-name drugs: an analysis of a free generic benefit.

ABSTRACT

OBJECTIVE: To evaluate the effect on adherence and medical care expenditures of a pharmacy benefit change that included free generic drugs and higher copayments for brand-name drugs. STUDY DESIGN: Quasi-experimental pre-post study of patients with ischemic heart disease (1286 control and 555 intervention) and patients with diabetes mellitus (4089 control and 1846 intervention). METHODS: Medical and pharmacy claims data were analyzed for continuously enrolled members from January 1, 2005, through December 31, 2008. A generalized linear model was used to predict costs as adherence changed. RESULTS: The rate of switching from brand-name drugs to generic drugs in the intervention group was not statistically different from that in the control group. The net change in adherence was higher only for the intervention group patients taking statins who switched to generic drugs, a 6.2% increase compared with an 8.5% decrease in the control group. The estimate of medical cost savings attributable to this benefit change was significant for only the metformin class of diabetes drugs. Improved adherence independent of this benefit change was estimated to reduce all-cause medical costs for patients taking sulfonylureas, metformin, and thiazolidinediones. CONCLUSIONS: Altering copayments for pharmaceuticals may affect the rate of conversion to generic drugs but is unlikely in and of itself to result in complete conversion. However, increasing adherence can result in net savings for specific diabetic drug classes, as savings from all-cause medical costs offset the increase in pharmacy costs.