GPPI Researchers Find Low Copay for Generic Medications Saves Money for Medicare
Jack Hoadley, health policy analyst and research professor at the Health Policy Institute (HPI), and co-authors, including Laura Summer, a senior research scholar at HPI, examined how benefit and formulary designs can affect the decision to use generic cholesterol medication among Medicare beneficiaries.
– A low copay (especially a zero copay) for generic statins, or medications used to treat high cholesterol, is the strongest influence on their use and can save money for Medicare, according to researchers in GPPI’s Health Policy Institute.
The study, published in this month’s Health Affairs, found that because less-expensive generic statins can readily be substituted for brand-name drugs, the result is major cost savings.
“This example with generic cholesterol medications should help both health plans and the Medicare program identify ways to increase the use of generics in this and other categories, especially drugs used to treat hypertension, gastrointestinal conditions, and osteoporosis,” says Hoadley.
The authors found:
A low copay for generic statins is the strongest influence on their use; a zero copay has a particularly large effect. The average copay for a generic statin was .15 in 2008; the average copay for the three most common brand-name drugs was between .57 and .90. Charging a copay for a generic drug, as opposed to no copay, decreased the probability of its use by 13 percent. For every 10 percent increase in the use of generic statins, Medicare could save an estimated billion annually.