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

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.