Expanding Generic Drug Use Could Save Billions

Health insurers and patients could safely save many billions of dollars annually by swapping out a more expensive drug for a less expensive generic in the same class of drugs, according to a study published Monday.

The suggestion goes beyond the common practice of substituting a generic drug for a brand-name drug with the identical active ingredient. The researchers say that in many instances, a generic with a different chemical makeup, prescribed for the same disease, could work just as well. This is called therapeutic substitution.

For example, a brand-name proton pump inhibitor, used to reduce acid reflux, could be replaced with a generic proton pump inhibitor with a different active ingredient. In many cases, the benefits would be the same. To pay more for the same benefit is just excess spending, the researchers say.

Excess spending of $73 billion took place between 2010 and 2012, the study concluded. Researchers examined prescription data on 107,123 patients, using the Medical Expenditure Panel Survey from the Department of Health and Human Services.

Of the total excess spending during that period, patients paid 33%, or $24.6 billion, out of pocket.

The study was published in JAMA Internal Medicine. It was authored by Michael E. Johansen, M.D., of the Ohio State University, and Caroline Richardson, M.D., of the University of Michigan.

The most excess money was spent on statins to lower cholesterol, with an excess expenditure of $10.9 billion; and atypical antipsychotics for mental disorders, with a $9.9 billion excess. Proton pump inhibitors to reduce stomach acid incurred an extra expense of $6.12 billion; and selective serotonin reuptake inhibitors, for depression, $6.08 billion.

“A previous study showed substantial potential savings if therapeutic substitution were introduced to Medicare Part D,” the authors stated. “In addition, a nationally representative study showed high levels of branded proton pump inhibitor (PPI) use and expenditure between 2007 and 2011 when a therapeutically equivalent generic medication was available.”

Certain classes of drugs were omitted from the analysis, including some antibiotics and respiratory drugs and testosterone. Insulin was also omitted, because no generic form is available.

Putting therapeutic substitution into practice will require better communication between doctors and pharmacists, and systems they use need to be redesigned, said author Johansen.

“The health care systems, the medical records systems, should be more aligned toward getting the easiest, cheapest, best drug into the patient’s hands,” Johansen said.

To do that, spreading the knowledge that pharmacists have is essential, he said.

“The pharmacists have information that I don’t have,” Johansen said. “For instance, what is the cheapest available drug? Not just by brand name, but what is the cheapest available drug for the patient.”

Substituting a lower-priced generic for a more expensive brand name drug is now widely accepted. In the great majority of cases, the drugs work the same. But therapeutic substitution brings in potential dangers such as harmful interactions with other drugs the patients may be taking.

In addition, laws would have to be changed to make therapeutic substitution legal.

Pharmacists can fill a prescription with a generic version of a drug, even if the prescription specifies the name brand. But all states allow physicians to overrule this discretion by indicating that the prescription must be dispensed as written.

Generally, pharmacists don’t have the authority to substitute another drug in the same class, even if it’s intended for the same ailment. In most states, physician approval is needed.

Drug company payments are linked to the frequency with which doctors prescribe brand name statins, according to an accompanying JAMA Internal Medicine study. The study, which does not prove cause and effect, examined the relationship between payments to Massachusetts doctors and their rate of prescribing branded statins.

For physicians with no industry payments listed, the median brand-name statin prescribing rate was 17.8%, the study found. For every $1,000 in total payments received, the brand-name statin prescribing rate increased by 0.1%.

“As the United States seeks to rein in the costs of prescription drugs and make them less expensive for patients, our findings are concerning,” the study said.

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