Managed Care

Recently introduced generics helped PBM control its costs

The top five generic drugs released over the past three years reduced pharmacy spending for Caremark by 4.8 percent in 2004, compared with what it would have spent on the branded drugs. This reduction is largely based on the timing of the release of generic products to the market. As more highly prescribed drugs lose patent protection, they will be supplemented by generics.

A sampling of California Medicaid managed care beneficiaries by National Medical Health Card Systems found that increased generic and over-the-counter utilization helped to maintain a flat cost per member per month.

Caremark expects more reductions in spending when generic versions of Zocor, Pravachol, and Lipitor become available. Overall, cholesterol medications accounted for approximately 10 percent of spending in 2004. Generic equivalents for Zocor and Pravachol are expected in mid-2006, with a generic version of Lipitor expected in mid-2007.

In 2003, the generic products introduced were of lesser-utilized branded drugs. The PBM only saw a 3.1 percent cost reduction. The reduction reported for 2004 was expected because a generic version of Wellbutrin became available, says Dale Thomas, a spokesperson for Caremark.

Top generics and the reduction in spending, 2002–2004

Source: 2005 Trends Rx Report, Caremark

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