WellManaged – Generics

What Are Generic Medications?
The U.S. Food and Drug Administration (FDA) verifies that all generic medications are clinically equivalent to their brand name counterparts before they are distributed. Generic drugs go through the same rigorous FDA approval process as branded medications, and provide safe and effective lower-cost alternatives to the branded products.

Current Drug Spends in the US
Compared to other high-income countries, such as the United Kingdom, Australia, the Netherlands, and Canada, the United States spends the most per capita on prescription drugs. While drug utilization in these regions is similar, the cost of medications in the U.S. remains significantly higher. This is counterintuitive given that generic drug utilization is considerably higher in the U.S. than all other high-income countries (with the exception of the United Kingdom).

Research indicates that this discrepancy emerged because approximately 20 percent of generic drugs manufactured in the U.S. experienced a rapid price increase between 2010 and 2015. Although these prices should decrease again due to market competition and pending lawsuits against generic manufacturing companies, generic drugs are currently significantly more expensive in the United States than other parts of the world.

Brand medications are projected to rise 9 percent or more in average wholesale price (AWP) in 2018 compared to no more than a 4 percent projected increase for generic AWP. The average cost of a generic medication in the U.S. is roughly $30.00 and the average cost of a brand name medication is $335.00. Implementing programs to drive clinically appropriate utilization of generic medications can yield substantial financial benefits for clients and provide significant out-of-pocket savings to patients.

WellManaged – Generics
The WellManaged – Generics program addresses the rising costs of medications, while still providing safe and highly effective treatments for patients. The recent pricing increases of generic drugs offers a unique
opportunity to decrease costs in this often-overlooked area. Program participants must go through a twoor three-step process that requires them to try lower cost drugs before obtaining more expensive generic or brand name medications. All of our formulary options are selected using evidence-based guidelines to ensure they are safe and clinically effective for a patient’s condition. In most instances, the Step One drugs mirror national and international guideline recommendations.

By encouraging patients to try a lower cost generic drug before using higher cost generics or brand name medications, the WellManaged – Generics program lowers drug spend without compromising quality of care. Additionally, by offering safe and effective lower cost generic alternatives, patients are able to afford their medications, which may further improve medication adherence and prevent increases in overall healthcare expenditures due to non-adherence.

2018 Quarter One WellInformed Table Contents