Use of $4 generic drug programs could save society billions of dollars, U.S. study shows

Published in the March 14 issue of Archives of Internal Medicine, the study is the first to evaluate the potential national savings from a broad use of discounted generic medication programs that are available at many retail stores' pharmacies.

The study examined a large group of people who used generic medications or their brand-name counterparts -- drugs like lovastatin or prescription-strength ibuprofen -- that also were available for $4 per 30-day supply through a discounted generic drug program. The study found that among the patients taking these medications, less than 6 percent used the $4 generic medication programs in 2007, even though on average prescription drug coverage plans ask patients to pay about $10 per 30-day supply for generic drugs and about $25 per 30-day supply for brand-name medications.

Had all eligible patients used the discount programs in 2007, the societal savings would have been $5.8 billion.

"Although just half of the potential users of the $4 programs would have saved more than $22 a year in out-of-pocket expenses, the societal savings are great. This suggests the majority of savings comes from a small proportion of individuals," said the study's lead author, Yuting Zhang, Ph.D., assistant professor of health policy and management, GSPH.

The researchers examined a nationally representative sample of nearly 31,000 people in the 2007 Medical Expenditure Panel Survey (MEPS) and identified patients who could have saved money had they filled their medications through a discount generic drug program. The researchers calculated potential savings as the difference between the actual prescription payments recorded in MEPS and the $4 the patients would have paid through a discount program.

"We are not promoting any specific pharmacy or any retail store's discount generic medication program," Dr. Zhang said. "However, if policy makers and clinicians direct patients to low-cost generic programs, patients and taxpayers could save tremendously."

The study was funded by the RAND University of Pittsburgh Health Institute and the National Institutes of Health-funded Clinical and Translational Science Institute: Translating Research into Practice Program. Co-authors include Lei Zhou, M.S., of GSPH, and Walid F. Gellad, M.D., of the University of Pittsburgh School of Medicine, the VA Pittsburgh Healthcare System and the RAND Corp.