Typically, when brand name drug patents are expiring and generic equivalents are about to hit the market, those affected most rejoice! And why wouldn’t they? Logic suggests that prices will immediately drop, helping employees who are on these medications and their employers save money.
But do they really save?
While it’s true that generic medications cost far less than brand name drugs, there’s typically a six-month period in the beginning, called the exclusivity period, where only the first drug maker to market is allowed to manufacture and sell the generic drug. And during this time, it’s not uncommon for the generic medication to be as expensive as the brand name drug.
Worse still, makers of brand name drugs are well aware of this scenario, so many set up programs to lure consumers to stay with their brand name drugs—often with physicians handing out manufacturer discount cards to their patients without truly understanding the ramifications to the health plan. These programs, which partly play upon consumers’ continued concerns that generic medications are somehow inferior to brand name medications, keep health plan members coming back for more.
While these manufacturer-based programs may look good on the surface, most consumers are unaware of the cost burden they’re placing on their health plans. And many employers are uncertain about the best way to combat the issue while ensuring their health plan members receive the care they need.
With the recent expiration of NEXIUM’s patent, now is the time to consider your organization’s strategy for managing generic medications, especially during their exclusivity period.
Please click to read Smart Strategies for New Generic Medications.