MedTrak's Generic Incentive Saves YOU Money!
Posted: Mar 28 2016


Generic Incentive

Intro 1, 2, 3
Generic medications are chemically equivalent, lower-costing versions of brand-name medications. They contain the same active ingredients as their brand-name reference drugs and are shown to work the same way in the body as the brand-name drugs. There is a slight, but not clinically significant, level of natural variability between absorption of different batches of generic products – just as there is for one batch of brand-name drug compared to the next batch of a brand-name product. Published clinical trials have shown no clinical difference in efficacy of generic products compared to their brand-name counterparts.

While generic products contain the same active ingredients, generic products may contain different inactive ingredients. The differences in inactive ingredients may cause a portion of patients to have an intolerance to a specific generic manufacturer’s product. When this occurs there are often different generic products available that may be more appropriate for those patients. The brand-name drug manufacturer often produces a generic version that is the branded product marketed under a generic name, when available this should be considered for patients who have an intolerance to an inactive ingredient in a generic product. 

Generic drugs are less expensive than brand-name medications because generic manufacturers do not have the same investment costs as the developer of a new drug. New drugs are developed under patent protections, which gives the brand-name drug manufacturers a designated time of exclusivity to market and sell their products. A generic medication typically becomes available when the brand-name drug’s patent protection expires. Once generic drugs are approved, there is typically greater competition among manufacturer’s which lowers the price of the generic products.

In order to gain approval from the U.S. FDA as a generic drug, the following standards must be met:
• Generic products must have the same active ingredient, strength, dosage form, and route of administration as the brand-name drug
• The generic manufacturer must prove its drug is the same (bioequivalent) as the brand-name drug
• All manufacturing, packaging, and testing sites must pass the same quality standards as those of brand-name drugs
• Many generic drugs are made in the same manufacturing plants as the brand-name drugs

Narrow Therapeutic Index Drugs 1, 2, 3
A drug may be referred to as having a narrow therapeutic index (NTI) when small changes in blood levels can cause changes in the effectiveness or toxicity of that drug. In the past concerns have been raised regarding generic substitutions of NTI brand-name drugs for generic equivalents. However, safe and effective use of NTI drugs requires careful dosage adjustments and patient monitoring regardless of whether a brand or generic product is used.

Generic Incentive 1, 2, 3
To help control Plan costs and increase generic utilization, MedTrak’s Clinical Care Center recommends generic incentive as part of the Plan design. Generic incentive requires members to pay the difference between the cost of the generic and brand-name drug when there is a generic equivalent available. Plans may elect to apply generic incentive for one or both Dispense as Written (DAW) 1 and 2 codes:

• DAW 1: is used when the prescriber indicates that the product is to be dispensed as written
• DAW 2: is used when the prescriber indicates that generic substitution is permitted and the patient requests the brand product. This situation can occur when the prescriber writes the prescription using either the brand or generic name and the product is available from multiple sources.

MedTrak’s Clinical Care Center recommends generic incentive be applied for both DAW 1 and DAW 2 codes.

Below are real examples of doctors mandating a brand name product when a generic is available and the potential cost savings for the Plan for one member.

 

 Without Generic Incentive

 With Generic Incentive

 

 Avg Monthly Plan Pay

 Avg Member Co-Pay

 Avg Monthly Plan Pay

 Avg Member Co-Pay

Fortamet (brand product)

$4,439

$76

$425

$4,091

Metformin ER (generic equivalent)

$425

$14

$425

$14

Potential Annual Plan Savings with Generic Incentive: $49,092

 

 

 Without Generic Incentive

 With Generic Incentive

 

 Avg Monthly Plan Pay

 Avg Member Co-Pay

 Avg Monthly Plan Pay

 Avg Member Co-Pay

Cardizem CD (brand product)

$4,184

$50

$47

$4,186

Diltiazem ER (generic equivalent)

$47

$14

$47

$14

Potential Annual Plan Savings with Generic Incentive: $50,237


Contact your MedTrak Account Manager to discuss your Plan’s specific statistics and cost management strategies.

 

References:

1.     Generic Drugs: Questions and Answers. Food and Drug Administration Web site. http://www.fda.gov/Drugs/ResourcesForYou/Consumers/QuestionsAnswers/ucm100100.htm. Accessed March 3, 2016.

2.     Davit et al. Comparing generic and innovator drugs: a review of 12 years of bioequivalence data from the United States Food and Drug Administration. Ann Pharmacother. 2009;43(10):1583-97.

3.     Kesselheim et al. Clinical equivalence of generic and brand name drugs used in cardiovascular disease; a systemic review and meta-analysis. JAMA. 2008;300(21):2514-26.



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