Generic Drugs Growing More Popular in Medicare Drug Program

CMS says nearly 60% of drugs being dispensed are generic

Feb. 8, 2007 – Nearly 60 percent of the drugs being sold in the Medicare Prescription Drug Plans and the Medicare Advantage plans are generic drugs, according to new data released by the Centers for Medicare & Medicaid Services.

	Related Stories
	Medicare Drug Program Enrollment Hits 39 Million, Still Open for Advantage Plans Only 6% reported switching plans during the open enrollment period January 31, 2007 – There are now 39 million Americans enrolled in the Medicare prescription drug program, which is an increase of 1.4 million since June of 2006, according to an announcement yesterday by Mike Leavitt, Secretary of Health & Human Services. Most, but not all, are senior citizens. Read more... Finding Coverage for Donut Hole is More Restricted, Expensive for 2007 But CMS says drug program is costing less than expected this year November 29, 2006 – The biggest problem with the Medicare drug program has been the lack of coverage – with no lack of premium – for senior citizens when they fall into the "donut hole." This is when beneficiaries are responsible for 100% of prescription drug costs between $2,250 and $5,100, and still must pay monthly premiums. KaiserNet.org reports that to find plans that offer coverage in the "donut hole" at a reasonable cost will be even harder in 2007. Read more... Read the latest news > Medicare > Medicare Drug Program > Today's Senior Headlines

It indicates, according to CMS, that more Americans are cutting their prescription drug costs by switching to generic medications.

The exact percentage, 59.6%, reflects activity through the third quarter of 2006.

Generic medications are as effective as their brand-name counterparts and offer significant savings. Although heavily promoted by many senior citizen advocates and government leaders, senior citizens have been slow to make the change. 

CMS promotes the use of generic drugs as a way for enrollees in the Medicare drug benefit to avoid or slow down reaching the coverage gap known as the "donut hole." By purchasing the lower cost generics, seniors can buy many more weeks or months of their prescriptions before hitting the cap that sends them in to the "donut hole," where there is not drug coverage but premiums continue.

The most recent CMS data shows that generic drug use among those enrolled in the Medicare drug benefit is 13 percent higher than the private third-party. CMS says this demonstrates that the Part D program is "delivering savings well above the national average to beneficiaries and the government alike."

According to the National Association of Chain Drug Stores (NACDS), generic dispensing has increased among private third-party payers growing by 9% over the past year—from 48.4 percent in 2005 to 52.6 percent in 2006. 

The new Medicare data mark the third consecutive quarter of growth in generic utilization among those in the Medicare prescription drug benefit, indicating that beneficiary choice and broad formularies are yielding even greater savings as the program has progressed. 

 “Generics are as effective as more expensive brand-name drugs in treating chronic conditions and other health-care problems," according to CMS Acting Administrator Leslie V. Norwalk.

"That is why a growing number in Medicare and elsewhere are asking their doctors about this alternative.  With tools such as the Medicare Plan Finder and the ‘Medicare and You’ handbook, CMS is helping people better understand how they can save even more with generics, and to find the plans that cover the medications they need.”

Norwalk adds, “The increased use of generics is great news for both consumers who are lowering their costs and the Part D program itself.  These savings can be used to provide better value and expanded coverage to beneficiaries.”

Due to lower-than-expected costs, the Medicare Part D program is already realizing significant savings relative to what the Congressional Budget Office (CBO) predicted when the program started over a year ago, she said.  

“We will continue to promote generics where they are available as an important strategy to keep the new drug benefit affordable over the long term,” Norwalk emphasized.

Health advocates recommend talking to a doctor about generic medications and less-expensive brand-name alternatives.  Information about additional cost savings through the use of mail-order pharmacies, generics, and less-expensive brand-name drugs is also available on the Prescription Drug Plan Finder section of www.medicare.gov.

CMS administers both the Medicare and Medicaid programs.  It is working to ensure effective, up-to-date health-care coverage and is promoting quality of care for beneficiaries. To learn more about CMS, visit www.cms.hhs.gov.