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Realized Savings from Generic Drugs
in Upstate New York
More Than $130 Million Saved in 2006 Compared With 2005
Finger Lakes Region
Estimated generic savings: $29 million
Generic fill rate: Oct. 2005: 55.6%
Oct. 2006: 63.0%
Western New York Region
Estimated generic savings: $37 million
Generic fill rate: Oct. 2005: 60.0%
Oct. 2006: 65.6%
Central New York Region
Estimated generic savings: $29 million
Generic fill rate: Oct. 2005: 48.4%
Oct. 2006: 55.3%
Utica/Rome/North Country Region
Estimated generic savings: $24 million
Generic fill rate: Oct. 2005: 47.7%
Oct. 2006: 54.7%
Southern Tier Region
Estimated generic savings: $15 million
Generic fill rate: Oct. 2005: 48.2%
Oct. 2006: 55.7%
Estimate of realized savings in the 39 upstate New York counties based on a projection
of what total prescription drug costs would have been if 2006 generic fill rates had
remained at 2005 levels.
Based on October 2005 - October 2006 drug utilization data from FLRx that provides pharmacy
benefit management services for more than 1.3 million people across upstate New York.
A December 2005 fact sheet that analyzed the use of generic drugs across upstate New York found
that that if every upstate county were to increase its “generic fill rate” to match the highest
performing county, the total annual savings would exceed $880 million.
Since that analysis was issued, there have been measurable increases in generic fill rates across all
upstate New York regions, resulting in realized savings totaling more than $130 million.
The average generic fill rate for the total upstate population improved from 53.8 percent in October
2005 to 60.1 percent in October 2006, an increase of 6.3 percentage points. There remain clear
variations in the generic fill rates of the five upstate New York regions, as well as of the individual
counties within each region. While 14 counties had generic fill rates below 50 percent as of October
2005, the county-level generic fill rates in October 2006 ranged from 50.8 percent in Fulton County
to 66.5 percent in Erie County.
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The graph to the right shows a rapid increase in the
generic fill rate for the entire upstate New York population. These month-by month estimates were made by
weighting FLRx data by age group and county and
extrapolating the data to the total population by age
group and county. FLRx data is based on the pharmacy
benefit management services provided for more than
1.3 million people across upstate New York. The total
population figures used in the calculations are the latest
available from the U.S. Census Bureau (released August 4,
2006)
The generic fill rate is the percentage of all prescription
drug “fills” that are generic drugs. One prescription fill is
conventionally defined as a 30-day supply of drugs for the
treatment of a chronic condition, such as high blood
pressure, or a single course of therapy for drugs used to
treat acute conditions, such as bacterial infection.
Prescribing Variations by Region
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Generic Fill Rates within Drug Therapies for Common Conditions
The December 2005 fact sheet on potential generic drug
savings highlighted savings opportunities available within drug therapies for three common conditions: heartburn/acid reflux, high cholesterol, and depression. These
three categories are typically responsible for between
20-25 percent of a health plan’s total drug expenditure.
Heartburn, Ulcers and Stomach Acid Reflux
Generic Fill Rates for Proton Pump Inhibitors (PPI)
As shown in the accompanying charts, the generic fill
rates in these three categories have increased significantly in all five regions of upstate New York. The increase in
the use of generic statins for high cholesterol was especially high due to the patent expiration of Zocor® and
Pravachol® in mid-2006, and the mid-year patent expiration of Zoloft® contributed to the increase in the use of
generic SSRIs for the treatment of depression.
How These Drugs Work
What are Proton Pump Inhibitors (PPIs)? PPIs are used
to treat heartburn, ulcers, and stomach acid reflux,
also known as gastroesophageal reflux disease, or
GERD. PPIs work by blocking an enzyme that makes
the stomach produce more acid. This relieves heartburn, which is caused by stomach acid washing back
up into the esophagus. All PPIs relieve heartburn and
help heal the damage caused by GERD in the majority of people who take them. They are quite similar in
effectiveness and safety, but PPIs differ greatly in cost.
What are HMGs – Statin drugs? Statins work by blocking an enzyme needed to make cholesterol. The body
needs cholesterol to maintain good health. But high
blood levels of certain cholesterol components (LDL
or “bad" cholesterol), as well as low levels of other
components (HDL or “good" cholesterol), are associated with a sharply increased risk of artery blockage,
coronary heart disease, heart attack, and strokes.
High Cholesterol
Generic Fill Rates for HMGs – Statin Drugs
Depression
Generic Fill Rates for SSRIs
What are SSRIs? Antidepressants work primarily
by affecting chemicals in the brain called neurotransmitters. The most important of these are serotonin,
norepinephrine, and dopamine. There are several
different types of antidepressants. The main group of
second-generation antidepressants is called the
“selective serotonin reuptake inhibitors," or SSRIs for
short. As implied, they appear to affect mainly
serotonin levels in the brain. This group includes
citalopram (Celexa®), escitalopram (Lexapro®), fluoxetine (Prozac®), paroxetine (Paxil®) and sertraline
(Zoloft®).
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Factors Driving the Increase in Generic Fill Rates
From October 2005 to October 2006, the generic fill rates across the five regions of upstate New York
improved by 6.3 percentage points. This increase is due to a number of factors, including a growing
public acceptance of generic drugs.
The introduction of new generic alternatives has also increased the generic fill rates in some drug
categories. During the one-year period covered in this analysis, the generic versions of the following
drugs have become available.
Brand Drug
®
Zithromax
Flonase® Nasal Spray
Pravachol®
Proscar®
Zocor®
Mobic®
Effexor®
Plavix®
Zoloft®
Generic Name
Generic Available
Used to:
azithromycin
fluticasone nasal spray
pravastatin
finasteride
simvastatin
meloxicam
venlafaxine
clopidogrel
sertraline
November 2005
March 2006
April 2006
June 2006
July 2006
July 2006
August 2006
August 2006
August 2006
Treat common infections
Treat allergic rhinitis
Lower cholesterol
Treat prostrate enlargement
Lower cholesterol
Treat inflammation/pain
Treat depression
Prevent stroke
Treat depression
Future Opportunities for Savings
As public education efforts continue and new generic alternatives become available in 2007,
additional savings may be achieved across upstate New York. In 2007, generic versions of the
following drugs are expected to become available.
Brand Drug
Generic Drug: Anticipated Availability
Used to:
Zofran®
Aceon®
Tilade®
Ambien®
Clarinex®
Lamisil®
Exelon®
Coreg®
Cognex®
Geodon®
Lotrel®
Norvasc®
Tricor®
Toprol XL®
January 2007
March 2007
April 2007
May 2007
July 2007
July 2007
September 2007
September 2007
September 2007
September 2007
October 2007
October 2007
November 2007
November 2007
Treat or prevent nausea
Treat high blood pressure
Treat asthma
Treat insomnia
Treat allergy symptoms
Treat fungal infections
Treat Alzheimer’s
Treat congestive heart failure
Treat Alzheimer’s
Treat mental health disorders
Treat high blood pressure
Treat high blood pressure, angina
Lower triglycerides
Treat high blood pressure,
congestive heart failure
Mavik®
December 2007
Treat high blood pressure
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METHODS
In contrast to the December 2005 generic drug fact sheet that analyzed potential savings opportunities with generic drugs, this fact sheet estimates the actual savings realized by upstate New York
counties during a one-year period from October 2005 to October 2006.
The analyses for these fact sheets were done by FLRx, Univera Healthcare’s pharmacy management
division. FLRx provides pharmacy benefit management services for more than 1.3 million people
across upstate New York.
The potential savings fact sheet had applied linear regression methods to FLRx pharmacy utilization
data for 39 upstate New York counties to estimate what each county’s drug cost savings would be
if each county had a generic fill rate equal to the highest generic fill rate achieved by any of
the counties.
This fact sheet uses FLRx utilization data for the same 39 counties to estimate the realized savings
achieved by each county as a result of the actual generic fill rate increases that have taken place over
a one-year period. This analysis takes each county’s monthly FLRx data for nine age groups and
extrapolates it to each county’s total population. This provides the total number of pharmacy fills,
generic fill rate, and drug cost (patient’s cost plus any pharmacy benefit) for each county by month.
Total county populations are from the U.S. Census Bureau (Population Estimates Program, Release
Date: August 4, 2006).
Savings are estimated as the difference in generic fill rate (for each age/sex/county band) in each
2006 month compared with the same month of the previous year (e.g., January vs. January),
multiplied by the estimated number of total fills, multiplied by the difference between average
brand and average generic cost for the entire upstate FLRx population (for that month and age
group). These estimated incremental savings per month are summed to generate the 2006 generic
savings estimate.
The results presented are “point estimates,” each of which should be interpreted as having a
confidence interval that would include errors such as those resulting from differences between FLRx
members’ drug use and use by the remainder of the upstate population, and differences in
“pharmacy network discounts.” (One of the ways that a health insurance plan affects the cost of
medical care is by acting as a “shopper’s club” that negotiates lower prices than are available to
individuals without insurance coverage for prescription drugs. The upstate New York population
buys the same drugs at varying prices due to differences in the discount rates that are used
by pharmacies. This analysis did not attempt to adjust average FLRx prices to total population
average prices.)
The generic drug savings identified in this analysis are realized by a variety of different stakeholders, including patients (less out-of-pocket cost for drugs), companies and organizations (lower health
insurance premiums), and taxpayers (less for publicly supported pharmacy benefits, such as those for
Medicaid recipients and government employees).
Additional Information about Prescription Drug Savings
go.univerahealthcare.com/generics
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