Maximising Generic Utilisation: The Power of Pharmacy Benefit Management

Abstract

Over a seven-year period (2006-2012), a US$77bn market in brand-name drugs will open to generic competition in the United States, dramatically expanding the opportunities to lower the costs of pharmaceutical care. To capitalise on this emerging market, benefit plans will need highly effective strategies for increasing the use of generics in day-to-day clinical practice — including financial incentives for plan members, expanded use of mail-order pharmacy, and vigorous efforts to communicate cost-savings opportunities to members and their physicians. Online cost comparison tools are an especially powerful vehicle for informing members about their options and motivating them to switch to lower-cost alternatives. At an industry level, maximising the generic market opportunity will require a more favourable regulatory framework and a realignment of incentives for new drug development.