There's absolutely nothing you can do about the high cost of prescription drugs, right?
Wrong! Encouraging consumers-including your employees--to switch from brand-name drugs to less-expensive generic drugs can yield dramatic cost savings. Generic drugs often enter the market at prices 25 percent less than brand-name drugs--but some drop to 60 percent less than the brand-name price within two years.
Drug companies spend billions of dollars on aggressive marketing and advertising for brand-name drugs. In fact, it is estimated that as much as 42 percent of the cost for a brand-name drug goes back into marketing and advertising the brand.
This fall, Blue Cross Blue Shield of Michigan, with support from the Detroit Regional Chamber and General Motors Corp., launched a program aimed at reducing prescription drug costs by increasing the use of generics.
The effort, considered the most extensive of its kind in Michigan--and possibly the country--includes a campaign to educate consumers, physicians and pharmacists on the quality and value of "generic drugs--the unadvertised brand."
A 1-percent increase in the sales of generic drugs, for example, could save Blue Cross Blue Shield of Michigan and its customers $17 million annually. If the formula is extended to include the entire population of Michigan, the potential savings could grow to $30 million or more.
Last year, for the third year in a row, Blue Cross spent more for members' prescription drug costs than for any other category of medical care spending--including in-hospital care, outpatient hospital care and physician fees.
"We believe that of the more than $1.7 billion Blues customers pay each year for brand-name prescription drugs, as much as $500 million to $600 million is pumped back into pharmaceutical manufacturers'...