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Generic Use Under Changing Co-Payments: Implications for Those With Multiple Chronic Conditions

Patients with multiple chronic conditions are less likely to use generic drugs, even when facing lower co-payments.

Published Online: May 10,2017
Christine Buttorff, PhD
Objectives: The impact of pharmacy benefit redesigns on increasing the use of generic drugs is not well studied in individuals using the most drugs: those with multiple chronic conditions. The objective of this study was to analyze whether generic substitution occurs in certain drug classes following a change in co-payments for working-aged adults with chronic conditions.
Study Design: This study uses pharmacy and medical claims data from Maryland’s high-risk pool from 2009 to 2011. An interrupted time series design exploits a natural experiment in plan drug benefit redesign that occurred in 2010. The pool lowered co-payments on generic drugs and raised them on preferred and nonpreferred brands. 
Methods: Generalized estimating equations were used to analyze the impact of the policy change on the percentage of generics utilized in the most common chronic disease medication classes. 
Results: Individuals’ generic use decreases as their number of chronic conditions increases. Antidepressant use increased 9% as a result of the policy, but this was not different for those with varying numbers of chronic conditions. The generic utilization rate remained unchanged for most other classes in the quarter immediately following the policy change. 
Conclusions: The policy change impacted the generic utilization rate of antidepressants only, and across all classes and time points, generic use was lower among those individuals with more chronic conditions. Understanding why generic use decreases with more chronic conditions will be important in designing health insurance policies to encourage the use of generics, as the number of individuals with multimorbidities continues to increase. 
Am J Pharm Benefits. 2017;9(2):-0

Generic medication use has grown substantially in the United States over the last 3 decades and now accounts for 83% of all prescriptions filled.1 Despite this overall increase, generic use is not this high across all plans, drug classes (with generic equivalents), or specific subpopulations.
As such, health plans continue to experiment with ways to increase the use of lower-cost generic drugs in the hopes of decreasing overall pharmacy expenditures. Newer value-based designs seek to incorporate the clinical effectiveness of drugs—not just their cost—when creating cost-sharing structures, such as lowering co-payments on highly effective drugs to treat chronic conditions.2,3 
The savings to health insurers and patients can be substantial from increased generic substitution. One study estimated that the savings on just 3 drugs could be $100 million for state Medicaid programs.4 Another estimated that the savings to Medicare’s Part D program could be as much as $1 billion for every 10% increase in the use of generics.5 Using employer data, Liberman and Roebuck found that a 1% increase in the use of generics could lower plan expenditures for pharmaceuticals by 2.5%.6
Despite the potential for savings, the use of generics varies across particular drug classes. The Office of the Inspector General of the Department of Health and Human Services used the Medicare Part D program to examine the generic substitution rate across several drug classes in Part D plans (number of generic fills divided by the total number of generic plus multisource brand fills).
Across the Part D drug plans studied, the use of generics varied widely, within class across plans. The generic utilization rate could vary across drug classes over time as new brand drugs come onto the market or older ones go off patent. However, when generics were available, they accounted for 75% to 98% of diuretic prescriptions and for only 33% to 77% of diabetes therapies.