Prescriptions for generic drugs rise sharply

Prescriptions for generic drugs rose sharply from 2008 and 2009, with generics jumping from 52.4 percent to 57 percent of all prescriptions. The sharp rise is linked to any number of factors, including the sluggish economy, increased coverage of over-the-counter medications, and more Medicare beneficiaries reaching the coverage gap (aka the doughnut hole), according to the Sanofi-Aventis Managed Care Digest Series, HMO-PPO Digest, 2010–2011.

How far we’ve come. Back in 2002, prescriptions for generic drugs amounted to 44.7 percent; generic drug use has crept up fractionally each year since. Prescriptions for generic agents overtook brand name prescriptions in 2007, when 51.4 percent of prescriptions were written for generic drugs.

The report also notes that, in particular, six common medications are less often exempt from generic substitution: Coumadin, Dilantin, Lanoxin, Tegretol, Synthroid, and Premarin. Among the six, the drug most likely to be granted exemption from generic substitution, Coumadin, reported the largest decline, from 53 percent to 48 percent.

The digest does not get into how much the increased use of generics has saved health plans, but a recent Congressional Budget Office brief that looked at payments to plans and pharmacies (2007 data) said the total number of prescriptions filled under Medicare Part D was about 1 billion. Sixty-five percent of those prescriptions were for generic drugs, 5 percent were filled with multiple-source brand-name drugs (brand-name drugs that are also available in generic versions), and 30 percent were filled with single-source brand-name drugs (brand-name drugs for which no chemically equivalent generic versions are available).

Using the Part D data, CBO estimates that dispensing generic drugs rather than their brand-name counterparts reduced total prescription drug costs in 2007 by about $33 billion. Thus, total payments to plans and pharmacies from the Part D program and its enrollees would have been about $93 billion — or 55 percent higher — if no generics had been available.

Percentage of all prescriptions filled with brand name vs. generic drugs / Percentage of HMOs that grant exemptions from generic substitution

Source for both charts: Sanofi-Aventis Managed Care Digest Series, HMO-PPO Digest, 2010–2011

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HAP, a subsidiary of Henry Ford Health System, is a nonprofit health plan providing coverage to individuals, companies and organizations. This executive develops strategies to meet membership and revenue targets through products, pricing, market segmentation and advertising.  Aligns business among Business Development, Commercial Sales, Medicare and Public Sector Programs and Product Development. Seeks to enhance and be responsible for business development and expansion through the development of an effective product portfolio, strong interpersonal relationships and service excellence.

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