GHI is committed to providing our customers with the highest quality prescription drug benefits plan at the lowest costs. In fact, we were recognized this year by the National Business Coalition on Health’s eValu8 health plan assessment as a regional PPO benchmark for the efficiency of our pharmacy management and e-prescribing programs.

An effective pharmacy program presents many opportunities to generate savings without impacting benefits or the quality of the service the member receives. A prime example is the substitution of lower-cost generic drugs for costly, patented brand-name drugs. Generic drugs are required to contain the same active ingredient as the brand medication. The Food and Drug Administration makes sure that before the generic version reaches the pharmacy shelf it meets many of the same medical standards as the brand. Generic drugs, however, are available at substantial savings. Industry data indicates that every increase of 1% in generic drug utilization results in a 1.07% reduction of drug expenditures.

GHI continues to educate our members and providers regarding the wisdom of generic drug substitution, and the results are clear. The 2007 generic drug fill rate increased 5.2% over 2006—a product of provider and member education initiatives, plan design, and brand name medications losing patent.

There will be much opportunity in the months ahead for continued cost containment as certain commonly used drugs come off patent and others become available over the counter:

• In 2008 alone, brand name drugs producing $10 billion in annual sales will lose patent protection. The list includes some widely used drugs, including the osteoporosis medicine Fosamax, the headache medication Imitrex, and the anti-psychotic medicine Risperdal.
• In certain cases, brand-name drugs losing patent protection move right to non-prescription status. A recent example of this is the popular non-sedating anti-histamine Zyrtec, widely prescribed for hay fever and respiratory allergies, which in November 2007 was approved by the Food and Drug Administration (FDA) for sale as an over-the-counter medication. This change in status not only increases the patient’s access to the drug, it also shifts the cost from the group directly to the consumer. GHI members who had been prescribed Zyrtec were notified that the drug had become available for over-the-counter purchase.

For more information about savings from generic drug substitution and other ways that GHI’s pharmacy management program is working for your group, please contact your GHI Account Executive.