February 24, 2006

Every $10 difference between brand and generic copayments can increase the generic substitution rate by 3-4 percent, according to a study by pharmacy benefit manager Express Scripts.

"Every one percentage point increase in the generic fill rate (GFR) can translate into a one percentage point reduction in drug costs without shifting costs to members," Express Scripts said.

"When copayments for generic medications are slightly reduced and copayments for brand medications are increased by the same amount, the average plan can typically achieve 'member fair share,'" where overall member costs stay the same, Express Scripts said.

The study shows that a $6-10 difference in preferred brand and generic copays increased the GFR by 1.49 percent compared to the GFR achieved with a $5 difference. An $1115 difference increased the GFR by 3.92 percent. A $16-20 difference increased the GFR by 4.7 percent, while a $21 or greater difference increased the GFR by 7.6 percent.

Other factors that affect GFR are the number of copayment tiers and whether patients were involved in step-therapy programs, in which doctors start patients on the most cost-effective and safest drugs for their conditions. Patients in plans with three copayment tiers had on average a 2 percent higher GFR than those with two-tier or nontiered coinsurance. In nontiered coinsurance, patients pay a flat copay instead of a percentage-based copay.

Meanwhile, patients in at least one step-therapy program had a 2.7 percent higher average GFR than patients that were not in any step-therapy program.