Healthy Skepticism Library item: 11254

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Publication type: news

Kosmetatos S.
Insurers embracing generic Rx
The Detroit News 2007 Aug 21
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070821/BIZ/708210335

Full text:

Doctors get cash bonus from health coverage companies for switching patient prescriptions from high cost brand names.

Once wooed by pharmaceutical giants with lavish gifts as a push to increase sales of their new drugs, doctors now are getting cash incentives from health insurance companies when they switch patients to cheaper generic medications.

The money is usually tied to how often doctors follow other measures to improve patients’ health and cut costs, such as making sure patients get flu shots, immunizations and regular screenings for mammograms and colon cancer, or even having flexible office hours that help make doctors more accessible to patients.

Insurers’ motivation for the incentives is simple: To cut costs. Generic drugs are much cheaper than brand-name medications. For example, some brand name cholesterol-lowering drugs cost more than $100 for a month’s supply, while the cost for generics is under $10.

There are benefits to consumers, too, because generic drugs tend to come with cheaper co-pays.

A recent Blue Care Network program paid 2,400 Michigan doctors $2 million for switching patients to generic cholesterol-lowering drugs from brand-name drugs like Lipitor and Crestor. The insurer said it saved nearly $5 million. And the HMO expects members who switched will save a total of $1 million from lower co-payments this year.

Dr. Steven Bernstein, a University of Michigan professor of internal medicine, doesn’t see the harm in paying physicians for generic switches, so long as the doctor takes the patient’s health into account first.

“The more affordable that we can make medications for patients, the better off they could be,” said Bernstein, who also is director of outcomes management for the U-M’s faculty group practice.

Bernstein and his colleagues say insurers have been giving doctors financial incentives for years, and they’re widely accepted within the industry because they generally reflect good clinical care.

Dr. A. Mark Fendrick, co-director of U-M’s Center for Value-Based Insurance Design, agreed with Bernstein but added that direct rewards for generic prescribing could make a switch seem financially motivated. He would rather see insurers reward doctors for getting patients who need certain drugs on the right course of treatment in the first place.

90-day reward program

Blue Care Network’s incentive program, which ran from Jan. 1 through March 31, was part of an effort to improve the quality of patient care and hold down drug costs, said Helen Stojic, a spokeswoman for the HMO.

Doctors got $100 for each patient that filled a generic prescription during the 90-day program, an amount intended to reimburse the physicians for the time it took to review patient files and discuss generic alternatives, Stojic said.

Blue Care Network focused on cholesterol-lowering statins for the program because that’s the category of drugs insurers spend the most on, Stojic said.

Self-insured companies can also see huge savings from generic switches. Prescription drugs cost General Motors Corp. $1.3 billion per year, said spokeswoman Michelle Bunker. For every 1 percent of prescriptions that shifts to generics from brand name drugs, the company saves $25 million, and those insured save from lower co-payments, she said.

“Generics play an important role for us,” Bunker said.

More generics are available

Besides incentives to doctors, other factors also are driving a big increase in generic prescriptions in the past few years.

There are more generic alternatives these days, because a lot of brand name drugs came off patent in the past couple of years. And patients shouldering more of their health care costs are asking for cheaper drugs, said Bruce Hill, vice president of health systems and purchaser relations for Flint-based HealthPlus.

HealthPlus’ incentives amount to about $1.5 million a year to 1,000 primary care doctors. The rewards take into account how many generic prescriptions the doctors write, but also things like appropriate breast cancer screening, testing for diabetes and patient feedback.

In the face of stiff generic competition, pharmaceutical companies like Pfizer have ratcheted up advertisements for blockbuster drugs. Pfizer enlisted the face of artificial heart inventor Dr. Robert Jarvik to pitch Lipitor.

But a trade group for U.S. pharmaceutical research and trade companies says there’s room for both brand and generic drugs.

“Both innovative medicines and generic drugs play a valuable role in effective treatment of millions of American patients,” said Ken Johnson, senior vice president of Pharmaceutical Research and Manufacturers of America.

Patients not told of incentives

The Blue Care Network program reminded doctors that patients can save money and have the same clinical result on a different drug, said Dr. Randy Bickle, a Northville family practitioner and president of Livonia-based Olympia Medical Services, a 600-member physician group.

Many primary care doctors in the group got a bonus of $1,500 to $2,000 from changing patients’ prescriptions.

Most of his patients never knew about the incentive from the insurer, but Bickle said that didn’t change the benefit to them of the switch. “In all honesty, (cholesterol lowering drugs) all work. They all reduce heart risk and stroke risk,” he said.

And, he said many patients came in asking for a conversation about generics after the HMO sent patients a letter informing them brand-name co-payments would increase.