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Generic medications contain the same active ingredients and work the same way as brand-name medications, but cost substantially less. As many Americans face mounting healthcare costs, substituting generic medications for their brand name counterparts can result in considerable savings for patients and payers.
Researchers at the University of Chicago recently analyzed the generic substitution rates of oral contraceptives (OCPs) and the associated costs in the U.S for the period of January 2010-December 2014. While the rates of prescribing generic OCPs increased during this period, there was no decrease in the costs associated with brand OCPs. In most cases, brand OCPs had generic options available. The study authors determined that substituting brand OCPs with these generic options would have saved $751 million in out-of-pocket costs during the study period.
The study, published in JAMA Internal Medicine, was inspired by an initiative from the Food and Drug Administration (FDA) to promote the prescribing of generic medications. Identifying generic substitution rates and associated costs savings for specific drug classes can help to highlight opportunities for reducing prescription drug costs.
Vineet Arora, MD, MAPP, associate professor of medicine at UChicago and the principal investigator of the project, was surprised to find that compared to other drug classes, such as statins, the generic utilization of OCPs has received little attention, despite being commonly prescribed. A medical student working with Arora, Mark Chee, realized that the Medicare Expenditure Panel Survey, a nationally representative database, could shed light on generic utilization of OCPs. Working with James Zhang, PhD, a health economist at UChicago Medicine who has studied generic substitution rates among Medicare populations, and other researchers from the non-profit organization Costs of Care, Arora and Chee determined that generic OCPs accounted for 73 percent of all OCP prescriptions in 2010, increasing to 82 percent in 2014.
“What we find is that generic prescribing is not only quite low for oral contraceptives,” Arora said, “but that almost all of the brands prescribed could have been issued as generics.”
The authors also analyzed the costs associated with generic and brand OCP prescriptions. During the study period, the average out-of-pocket cost of brand OCPs was $117.15 per person per year, roughly double that of generic OCPs, which was estimated to be $59.53 per person per year.
The study period encompassed the implementation of the Affordable Care Act (ACA) contraception mandate, which required coverage of female contraceptive methods by health insurers. Prior to the ACA mandate, roughly 14 percent of all OCP prescriptions (both generic and brand) did not have a copay. This figure increased to 47 percent following the implementation of the ACA mandate. However, not all patients are covered by health insurance, and many states allow certain employers and insurers to be exempt from the coverage mandate.
“Hence, the substitution of generic OCPs for brand ones is an important venue to save costs for millions of patients and improve their wellbeing, despite the policy limitations,” Zhang said.
There may be some instances in which prescribing a brand OCP is necessary, but in many cases, “switching to generics is a no-brainer, but often difficult due to patient preference, skepticism, and clinical inertia,” said Arora, who is now working with the FDA IMPROVE team to use this data to test messages and interventions for primary care clinicians to promote the prescribing of generic OCPs.
Featured image: Flickr
Vineet Arora, MD, MAPP, is an Associate Professor of Medicine, Assistant Dean for Scholarship and Discovery and Director of GME Clinical Learning Environment Innovation at the University of Chicago Medicine.