Upstate N.Y. Would Save Millions with Generic Drugs, Says Excellus

December 14, 2005

If 39 counties in upstate New York were to increase their generic prescription drug fill rates to match the upstate counties with the best rates, the estimated annual health care savings would exceed $880 million, according to an analysis issued by Excellus BlueCross BlueShield.

“This research shows the potential for a trifecta of savings; consumers, employers and taxpayers all win,” said Joel Owerbach, Pharm.D. vice president and chief pharmacy officer for Excellus BlueCross BlueShield. “Consumers would see immediate savings in lower prices and lower insurance copays at the pharmacy, while employers and taxpayers would see future savings as pharmacy cost trends are reduced. It’s a win-win-win opportunity.”

The generic fill rate is the percentage of all prescription drug “fills” that are generic drugs. One prescription fill is commonly defined as a 30-day supply of drugs for treatment of a chronic condition, such as high blood pressure, or a single course of therapy for drugs used for treatment of acute conditions, such as a bacterial infection.

Because people of different ages have different pharmaceutical needs, the report analyzed prescription drug data by age group to improve the accuracy of the projections and to identify where the greatest savings potential exists.

Potential savings are highest for those in the 65-74 age group, where the total savings would exceed $174 million. For the 75-and-older age group, savings would exceed $163 million. Savings opportunities for younger age groups are also significant. For the 15-24 age group, the potential savings exceed $77 million and savings for the 25-34 age group total more than $52 million.

The report, titled “The Facts About Potential Savings from Generic Drugs in Upstate New York,” is available to the general public online at www.excellusbcbs.com in the “Public Policy and Research” fact sheet section.

The report also includes examples of the potential savings related to several common medical conditions, such as heartburn, high cholesterol and depression. For heartburn and acid reflux, a common treatment is a category of drugs called Proton Pump Inhibitors (PPIs). In this category, the average cost for a 30-day supply of brand name Prilosec is $138, the generic version of Prilosec costs $40, and the over-the-counter version in the same dosage (called Prilosec OTC) costs $24. Over a one-year period, a patient’s medication costs could be reduced by $1,368 by switching from Prilosec to Prilosec OTC.

Prilosec OTC is one of the drugs selected as a “Best Buy” by Consumer Reports Best Buy Drugs, a public information project that provides free reports on selected classes of drugs on its Web site, www.CRBestBuyDrugs.org. Consumer Reports Best Buy Drugs was not involved in the creation of the Excellus BlueCross BlueShield report.

The cost of prescription drugs has been widely cited as a major factor in the rising cost of health insurance premiums. About 17-19 percent of the benefits expense for a typical upstate New York health plan is spent on pharmacy costs.

“If consumers, physicians, pharmacists and insurers work together to increase the generic fill rate in upstate New York, we can achieve significant cost savings for our communities,” Dr. Owerbach said.

Excellus BlueCross BlueShield is a nonprofit independent licensee of the BlueCross BlueShield Association.

Source: Excellus www.excellusbcbs.com.

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