With healthcare expenses and drug costs mounting, it would make sense to find ways to save money wherever possible. However, a new study has found that the healthcare system actually wastes billions of dollars a year when doctors prescribe brand-name drugs instead of similar generic drugs.
The study comes from Michael E. Johansen, M.D., of Ohio State University at Columbus and Caroline Richardson, M.D. of University of Michigan at Ann Arbor. They published their research May 9th in the journal JAMA Internal Medicine.
The researchers used data from the Medical Expenditure Panel Survey, including prescription medicine use by 107,132 study participants between 2010 and 2012. By examining the overall and out-of-pocket expenses for these prescriptions, the researchers estimated the potential savings if doctors had substituted a similar drug. The drug classes in the study included some that had a brand name drug without a chemically-equivalent generic version but that had either a generic or over-the-counter (OTC) drug in the same class. Although these generic or OTC drugs were not identical to the specific brand-name drug, they worked in a similar manner to treat the same medical condition.
Of the study participants, it turns out that just over 62 percent used a prescription medication during the study period, and about 31.5 percent of the participants used a prescription drug that the researchers examined in the study. Just over 16.5 percent of the people in the study used a brand-name drug in a class the researchers looked at, 24 percent used a generic drug, and just over 9 percent of people studied used both a brand-name and generic drug.
The researchers looked at what drugs the participants used in certain classes, their cost, and the cost of a generic or over-the-counter equivalent. They found that spending for brand-name drugs when there was a generic or OTC available was about 9.6 percent of the total medication expenditure and about 14.1 percent of the out-of-pocket costs for the patient. Overall between 2010 to 2012, prescription drug spending was $760 billion with about $175 billion in out-of-pocket costs. This means that almost $73 billion was wasted overall in that time period, with patients wasting almost $25 billion of their own money.
Even when they have health insurance, many patients struggle to pay their medical bills. The study suggests that these patients could have saved money had their doctor thought to prescribe a generic medication in the same drug class as their brand-name preference.
The researchers found that some drug classes had more overspending than others. These included statins to lower cholesterol, proton pump inhibitors to reduce acid reflux, newer antipsychotic drugs, selective serotonin reuptake inhibitors (SSRI) for depression, and angiotensin receptor blockers for high blood pressure and heart disease. Many of these drugs are prescribed increasingly as the population ages, and this includes elderly patients who are on a fixed income and cannot afford any extra costs.
Some brand-name drugs are relatively new to the market, with patents that protect other drug manufacturers from producing a generic equivalent. When these patents expire, other drug manufacturers can produce a chemically-identical drug without the brand name or the high cost. However, even when there is not a chemically-identical generic drug available as a substitution for a brand-name drug, doctors may have the option of prescribing another medication in the same class. For example, although a popular brand-name statin may not have a generic equivalent, a different statin may have a generic version. Although these two drugs may not have the same chemical makeup, they work in the same way to lower cholesterol.
The use of these therapeutic equivalent drugs is controversial. On the one hand, with the same action, two drugs may help the patient in the same way. On the other hand, there may be other differences between the drugs, making one easier on the stomach or less likely to interfere with other drugs, for example. Some physician organizations oppose mandating therapeutic substitution because it interferes with doctors prescribing the drug they feel is best for a particular patient.
When some patients cannot afford to pay their prescription, they simply go without, potentially jeopardizing their health. This also adds additional costs to the healthcare system as these patients end up with poorer health from skipping their medication, exasperating their medical condition and potentially having to check into the hospital. If therapeutic substitutions could save both the patients and healthcare money, it may be beneficial for doctors to prescribe alternative drugs whenever possible.