Doctors may be encouraged to prescribe lower-cost generics, but a new study found that Americans spent an extra $73 billion between 2010 and 2012 on pricier brand-name drugs because physicians failed to sufficiently recommend these copycat treatments to their patients. And consumers paid nearly one-third of those additional costs through out-of-pocket payments.
Notably, the study found that the excess spending occurred when a generic version was not available for a specific brand-name drug, but a doctor could have prescribed a lower-cost, copycat for a similar brand-name medicine. For example, instead of prescribing a lower-cost generic for a brand-name cholesterol pill, a doctor might have prescribed a similar brand-name cholesterol medicine.
“We’re spending so much money, but could save so much if prescribing was more efficient,” said Dr. Michael Johansen, a professor of medicine at Ohio State University and one of the coauthors of the study, which appeared today in JAMA Internal Medicine. “Clinicians bear some of the brunt. The mirror is staring back at us pretty clearly.”
Looked at another way, the additional spending on what the researchers called “overuse” of brand-name medicines accounted for 9.6 percent of all spending on prescribed medicines between 2010 and 2012. The study reviewed health data for more than 107,000 individuals from the Medical Expenditure Panel Survey, a federal database, during those years.
The researchers also found that most of the extra spending was for widely prescribed medicines, including drugs used to treat high cholesterol; schizophrenia and bipolar disorder; depression; acid reflux; and high blood pressure. Spending on such medicines totaled $213 billion, and of this, $147 billion was for brand-name medicines, after accounting for rebates that drug makers offer payers and insurers.
The results appear amid growing concern over the cost of prescription medicines. Prices for many brand-name drugs have been rising — in some cases, by very large percentages — and generics are increasingly seen as a way to blunt this trend. In fact, about 88 percent of all prescriptions written in the United States are for generics, according to the IMS Institute for Health Informatics.
But while many states require generics to be substituted for brand-name drugs — unless a physician notes otherwise — the study authors point out that some doctors believe mandatory substitution undermines their autonomy. The American Academy of Family Physicians, for instance, opposes mandatory substitution.
Meanwhile, brand-name drug makers have tried to fight back. An examination of more than 2,400 Massachusetts physicians in the Medicare prescribing database in 2011 found an association between payments made to doctors, particularly for continuing education, and prescribing brand-name cholesterol-lowering drugs. This analysis was published in the same issue of JAMA Internal Medicine.
However, a research letter published in the same journal found that from 2009 to 2015, the percentage of doctors who believe that generics may be less effective than brand-name drugs has decreased by half, to roughly 1 in 10 physicians. Just the same, they found that some doctors remain skeptical about generics, especially those who rely on pharmaceutical sales reps as sources of information about generic drug availability.
Of course, as with any study, there are caveats.
Not all medicines within the same so-called class of drugs may be equal, Dr. Joseph Ross, an associate professor of medicine at Yale University, wrote in an accompanying editorial. For example, different depression pills may be equally effective, he explained, but may cause substantially different side effects. In such cases, he explained, substitution “may not be appropriate.”
This is a good point, but when appropriate, generic substitution is likely to lower costs. After all, patients are more likely to fill a prescription for a lower-cost generic than a higher-priced prescription for what amounts to a “me-too” medicine.