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Generics… What do consumers think? What do consumers do?

Generics… What do consumers think? What do consumers do?. Emily Cox, PhD Express Scripts William Shrank, M.D., M.S.H.S. Harvard Medical School and Division of Pharmacoepidemiology and Pharmacoeconomics Brigham and Women’s Hospital. Generics Vastly Underutilized In Many Therapy Classes.

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Generics… What do consumers think? What do consumers do?

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  1. Generics… What do consumers think?What do consumers do? Emily Cox, PhD Express Scripts William Shrank, M.D., M.S.H.S. Harvard Medical School and Division of Pharmacoepidemiology and Pharmacoeconomics Brigham and Women’s Hospital

  2. Generics Vastly Underutilized In Many Therapy Classes

  3. Generics Vastly UnderutilizedIn Many Therapy Classes Source: ESI Internal Research

  4. $20 Billion in Potential Savings Source: ESI Internal Research

  5. $20 Billion in Potential Savings • $20B for 157M commercially insured • More than double across entire US

  6. Generic Pipeline is StrongMore than $65 billion within the next five years Other Other Annual Sales $ Billion Other Diovan/HCT Flomax Other Lexapro Cozaar/Hyzaar Other Other Effexor XR Adderall XR Seroquel Depakote Levaquin Valtrex Imitrex Zyprexa Singulair Topamax Fosamax Protonix Lipitor Lamictal Prevacid Plavix Actos Risperdal 6

  7. Increased Rate of Compliance with Generics Formulary status of the initial prescription Percent of Days Covered Source: Shrank WH et al., Arch Intern Med. 2006;166:332-337.

  8. Benefit design Tiered copayments Step Therapy Education and engagement Historic Levers to Get to Generics Effect of Consistently Framed Messaging Effect of Brand/Generic Copay Differentials Consistently framed messaging doubled and tripledeffect of formulary change alone Formulary change only retail / mail rxs 1.9 $11 to $15 retail rxs 2.9 $16 to $20 + framed messages mail rxs 5.2 $21 + 0% 10% 20% 30% 40% 50% 0 1 2 3 4 5 Fraction switching to lower-cost option Absolute increase in GFR relative to $0-$10 Source: Mager & Cox. AJMC 2007 Source: ESI Research

  9. How We Communicate About Prescriptions to Consumers • Effectiveness – does it work? • Safety – what are the negative effects? • Cost – how much will it cost? Do beliefs along these dimensions drive generic utilization?

  10. We asked what they thought.We measured what they did. Generic Fill Rate

  11. We Asked What They ThoughtWe Measured What They Did

  12. Are Generics Safer and More Effective?

  13. No Clear Advantage for Brands Generics and brands with relatively little difference Percentage who agree

  14. No Clear Advantage for Brands Generics clearly the winner on issues of cost Percentage who agree

  15. So Why Doesn’t Everyone Prefer Generics? Percentage who agree

  16. So Why Doesn’t Everyone Prefer Generics? Percentage who agree

  17. Negotiated Discount/Rebate for Drugs Negotiated Discount/Rebate Chargeback for Drugs (volume, market share, formulary placement) Drug Manufacturer WAC - based Drugs Payment Subject to Prompt Pay/ 1 Negotiated Discount/Rebate for Other Terms 2 Drugs (volume, market share) Wholesaler Drugs WAC - based Payment AWP - or WAC - based Negotiated Payment Pharmacy Drugs WAC - based Payment 3 Pharmacy Benefit Manager Drugs Provider (hospital, physician) Payment Share of Rebates ASP - , AWP - or WAC - based from Manufacturer Negotiated Payment Drugs Health Plan/Payer Cost Sharing/ Cost Sharing/ 4 Payment Payment Premium Beneficiary Flow of Funds Flow of Prescription Drugs Various Paths to a Prescription AMCP Guide to Pharmaceutical Payment Methods, www.AMCP.org

  18. Physicians Unaware of Pharmacy Coverage Shrank et al. AJMC, 2005

  19. Physicians Don’t Feel Accountable “Doctor, who should talk with your patients about lower cost Rx choices?” Shrank et al. AJMC, 2005

  20. “Do You Talk With Your Doctors About Drug Costs?” Most patients never talk to their doctors about drug costs Shrank et al, Journal General Internal Medicine. 2006

  21. Comfort Does Not Drive Behavior 21

  22. Comfort Does Not Drive Behavior 22

  23. Comfort Does Not Drive Behavior 23

  24. Divergence of Opinions Regarding “The Rules”

  25. Comfort with Substitution And Communicating With Providers Each model controls for patient for age, gender, self-described health, income, education, benefit design, and benefit generosity. Parameter estimates reflect the increase in the proportion of generics used for each standard deviation increase in response for each factor. Higher scores in each factor indicate more positive views regarding the factor domain. * p value < 0.05, ** p value < 0.001, *** p value < 0.001

  26. Patient Variation in Preferences

  27. What Did We Learn? • Attitudes toward generics • Generics are less costly – they ‘get it’ • Generics are no worse than or better than brands • On the whole – generics are better value • Gaps in communication around generics • Process stronger driver of generics • Comfort with generic substitution • Dialogue with “the experts”

  28. Intuition is not Enough One size does not fit all Research questions Do patients view brands a status symbol? Does different framing of generics (i.e., tried and true) impact use? Which framing is most impactful across segments? Rigorous testing will be our focus going forward

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