Recently released data indicate that more Americans are cutting their prescription drug costs by switching to generic medications.
Recently released data indicate that more Americans are cutting their prescription drug costs by switching to generic medications. New data from the Centers for Medicare & Medicaid Services (CMS) find that generic use is especially high among those in the new Medicare drug benefit, with generics accounting for nearly 60 percent (59.6 percent) of the drugs dispensed to people in Medicare Prescription Drug Plans (PDPs) and Medicare Advantage (MA) plans through the third quarter of 2006.
Generic medications are as effective as their brand-name counterparts and offer significant savings. In addition, for enrollees in the Medicare drug benefit concerned about the coverage gap, generics can lower one's costs and thus delay reaching the gap or help avoid it altogether.According to the National Association of Chain Drug Stores (NACDS), generic dispensing has increased among private third-party payers growing by 9 percent over the past year - from 48.4 percent in 2005 to 52.6 percent in 2006. The most recent CMS data demonstrate that generic use among those enrolled in the Medicare drug benefit is 13 percent higher than the private third-party demonstrating that the Part D program is delivering savings well above the national average to beneficiaries and the government alike.
The new Medicare data mark the third consecutive quarter of growth in generic utilization among those in the Medicare prescription drug benefit, indicating that beneficiary choice and broad formularies are yielding even greater savings as the program has progressed.
According to CMS Acting Administrator Leslie V. Norwalk, "Generics are as effective as more expensive brand-name drugs in treating chronic conditions and other health-care problems. That is why a growing number in Medicare and elsewhere are asking their doctors and pharmacists about this alternative. With tools such as the Medicare Plan Finder and the 'Medicare and You' handbook, CMS is helping people better understand how they can save even more with generics, and to find the plans that cover the medications they need."
Norwalk adds, "The increased use of generics is great news for both consumers who are lowering their costs and the Part D program itself. These savings can be used to provide better value and expanded coverage to beneficiaries."
Due to lower-than-expected costs, the Medicare Part D program is already realizing significant savings relative to what the Congressional Budget Office (CBO) predicted when the program started over a year ago. "We will continue to promote generics where they are available as an important strategy to keep the new drug benefit affordable over the long term," Norwalk emphasized.
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