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Employer News | December 17, 2013
Employer News | December 17, 2013

Lower-cost Drug Options are Within Reach

Back in 2005, 53 percent of prescriptions in upstate New York were filled with a generic. That prompted Excellus BlueCross BlueShield to launch a campaign to encourage people to ask their doctor or pharmacist about lower-cost options. Generics are approved by the Food and Drug Administration as being as safe and effective as their brand-name counterparts, at a lower cost. Today, 80 percent of prescriptions here are filled with a generic, saving upstate New Yorkers more than $1 billion since Excellus BlueCross BlueShield's effort began.       

The next big opportunity to reduce drug spending is with a class of medications known as biologics. These are drugs made with living organisms rather than chemical compounds. Biologics are the highest-cost medications, and are used to treat cancer, rheumatoid arthritis, multiple sclerosis and other conditions.

Prices for biologics can range from $1,000 to more than $50,000 per treatment. Some can cost hundreds of thousands of dollars per year per patient. By 2014, 40 percent of all prescription drug spending is expected to be on these complex medications that are used by 2 percent of the population.

Many biologics have lower-cost counterparts known as biosimilars, so named because they are highly similar to an already approved biological product and have the same safety profile and clinical benefit. While biosimilars aren’t yet available in the U.S., patients in Europe and Asia have used them to lower treatment costs by as much as 40 percent. One study projects that the U.S. could save $250 billion over 10 years if just 11 biosimilars were to enter the market. With more than 13,000 upstate New Yorkers suffering from multiple sclerosis alone, interest here in biosimilars is high.   

The Affordable Care Act directs the FDA to speed approval of biosimilars to promote competition and reduce costs. While the federal government will determine whether particular biosimilars are interchangeable with the originals, each state will determine its own policy on substitutions. This has made the states the battleground for brand-name drug makers to defend their turf. This year alone, large pharmaceutical companies have lobbied 18 states for legislation that would limit biosimilars, with no success. California Governor Jerry Brown recently vetoed a bill that critics said would limit the use of lower-cost biosimilars at the expense of chronically ill patients.  

Brand-name drug makers have bypassed New York with their lobbying roadshow, but their arrival here is likely to be just a matter of time. That’s why it’s important for health care consumers and elected officials to be aware of biosimilars and their potential to dramatically reduce spending on this costly class of drugs.

Find out more about saving with generics.

Mona M. Chitre, PharmD, CGP, Vice President, Pharmacy Management, Excellus BlueCross BlueShield

 

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