Friday, August 26, 2011

Generic Drugs and Your Health Plan

When you go to Costco, do you buy Advil or do you buy the Kirkland version of Advil? At the grocery store do you buy the $7.00 tub of “Greek Yogurt” or the “Presidents Choice” version for $3.99? In our home, we buy the President Choice version because it is as good or better for a noticeably lower price. We like to have both quality and good value when we make a purchase decision.
The same should be true when you buy a prescription drug. But in many cases, it is not happening.

Our company requires all prescriptions to be filled with the generic equivalent drug unless the Doctor specifies “No Substitution”. We do this because in the majority of cases, there will be no difference in the efficacy of the generic drug relative to the name brand. The cost will be markedly different. By using the generic drug, we have saved our clients hundreds of thousands of dollars in the last year alone.

Imagine the impact over five years!

It is important that everyone who is covered by an employee benefit plan understands how the cost of the plan can be impacted by their spending. In the case of generic substitution, the cause and effect is demonstrable. Our objective is to keep our client plans sustainable for the long term.

Our generic fill rate is well above the Canadian average but it is still below the US rate which was 75% in 2010 (Source: IMS Health). Next time you get a prescription from your doctor, ask for the generic equivalent at the pharmacy. You will be amazed at the difference in price.

You will be helping to keep you and your benefit plan healthy for the long run.

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