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Generic drugs can save you $$$.

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' marketing campaigns," says Atheer Kaddis, the Blues director of Pharmacy Services.

'The unadvertised brand'

Generic medications, generally not advertised in the marketplace, must meet the same U.S. Food and Drug Administration standards for safety and performance as brand-name prescription drugs.

To be considered a therapeutic equivalent by the FDA, a generic drug must have:

* Identical active ingredients as the brand-name drug.

* The same or similar speed of absorption of its active ingredients into the bloodstream.

* The same specifications for strength, quality, purity and potency as brand name drugs.

Another advantage of generics is they are considered "tried and true." By the time brand name manufacturing patents expire, allowing generic versions to be marketed, the formulas have been widely used in the marketplace.
3 new generics

Three prescription drugs that will have generic
equivalents between now and December 2002:

Name brand Generic Date of availability

Prilosec Omeprazole October 2001

Mevacor Lovastatin December 2001
(high cholesterol)

Claritin Loratidine December 2002

For more information on how to get involved with this campaign, contact Roy Lamphier, senior director of insurance programs at the Detroit Regional Chamber, at (313) 596-0381 or e-mail:
COPYRIGHT 2001 Detroit Regional Chamber
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:dramatic costs savings by switching to generic drugs
Geographic Code:1U3MI
Date:Dec 1, 2001
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