The policy journal Health Affairs, in its latest issue, published a study of Medicaid prescription drug costs and state regulation of the use of generic medication. Some states give pharmacists or patients the authority to decide when to substitute less-costly generics for brand name drugs. Pharmacists seem to have few qualms with the switch, but patients do, the research suggests.
Pharmacists beat patients on saving money
Researchers from Harvard Medical School, Mount Sinai School of Medicine and CVS Caremark (which also paid for the study) looked at Medicaid spending for drugs to fight cholesterol in the 15 months after the blockbuster Zocor lost its patent. They found a more rapid drop in spending among states where pharmacists may swap generics for brand name drugs without patient approval.
On average, Medicaid spent roughly $15 less per prescription in states without consent laws during the first three months after Zocor's generic rival simvastatin appeared on the market in June 2006, the study said. The gap widened to $16 in the final three months of 2006 and $18 in the first three months of 2007.
As generic use spread, the gap narrowed to nearly $6 and $3 in the next two quarters, respectively, the authors said.
The more sluggish switch to simvastatin in some states cost Medicaid about $19.8 million during the year and three months authors reviewed. At the time, 39 states had patient consent requirements. Researchers estimated Medicaid could save $100 million in the year after patients expire for Lipitor, Zyprexa and Plavix if no state required patients to approve generics.
State fiscal distress makes the findings notable, the authors wrote. “Policy makers will need to decide if they can justify not realizing these savings in order to provide patients with greater choice, in the context of current economic strains on the health care system.”
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