Health plan finds success with its generic coupon

Almost all who tried generics stayed with them

While President Bush wants to speed the availability of generic drugs, one health plan wants to ensure that its members use generics that are already on the market.

Last December, Blue Cross Blue Shield of Michigan (BCBSM) in Detroit mailed coupons to about 7,000 member homes. These coupons waived the copayment when members tried a generic version of a brand-name drug for the first time. The drugs promoted by the program included the top 25 medications for which generic alternatives were available, based on BCBSM data from 2000.

About 10% of the participants used the coupons during the January-to-June pilot program. About another 10% tried generics without the coupon. The health plan lost about $6,700 in waived copayment fees from members using the coupons, but gained an estimated $190,000 in reduced drug costs from the switch to generics.

In addition, nearly all of the participants converting to generics during the pilot remained with the generic version after the first try.

"This confirms our belief that, when given a chance, members can trust generic drugs to produce similar results as their brand-name counterparts at a fraction of the cost," says Glen Perry, MBA, BCBSM’s director of pharmacy services administration.

Modeled after drug company programs

BCBSM modeled the pilot after programs that brand-name drug manufacturers have used to promote their products, Perry says.

"A group of Blues professionals from various disciplines — pharmacy, marketing, communications, and provider relations — came together about a year ago to brainstorm ways to promote awareness of the value of generics," he says. "Several innovative ideas came out of this team, such as a competition among the state’s pharmacies to increase generic dispensing rates, a print advertising campaign featuring the winners of the competition, and the consumer coupon pilot."

BCBSM recognizes that physicians are best qualified to choose the appropriate medication for their patients.

"Many patient-specific variables must be considered when drug therapy is prescribed," he says. "If the generic drug is appropriate for a particular member, we wanted to provide that member with an incentive to switch to the generic drug."

BCBSM mostly relied on direct mail literature and other educational campaigns to influence its members’ decisions when they entered the pharmacy.

"We think the novelty of the idea and the timing contributed greatly to the success [of the pilot]," Perry says. "Our surveys show that consumers increasingly want their health plans to provide information on how they can save money with generic drugs. The polls also show awareness of the safety of generic drugs is growing. People are getting the message that the generics are FDA-approved and tried and true."

BCBSM also has been promoting its efforts to raise awareness of generics to physicians, employers, and pharmacists.

"At the same time we were telling members that generic drugs were safe and effective as well as lower cost, we were sending similar messages to pharmacists and physicians," Perry says. As a result, many employers promoted generics to their workers, and some groups adopted new co-pay structures that encouraged the use of generic drugs over the brand names.

BCBSM is preparing for a second phase of the pilot program in 2003. While the initial pilot included only the health plan’s fully insured members, BCBSM is approaching its self-insured groups for phase two. The number of BCBSM members that will receive coupons is dependent on a number of factors, including how many of the plan’s groups sign on to the program, Perry says. Still, the target audience is expected to triple in phase two to about 20,000 members.

"If generic Prilosec [omeprazole] comes to market in the next couple of months, which we are hopeful that it will, the number of members who receive coupons could increase dramatically," he adds. "BCBSM members filled nearly 300,000 prescriptions for Prilosec in the first six months of 2002."

Phase two will have a change in where the prescriptions can be filled, as well. In the first phase, only prescriptions filled at retail pharmacies in Michigan qualified for the co-pay waiver. In phase two, BCBSM will also work with its mail order pharmacy vendor to include prescriptions filled through that channel. In addition, BCBSM is exploring ways to offer co-pay waivers to its members who fill their prescriptions at retail pharmacies in other parts of the country.

"We have a significant population living outside of Michigan and see an opportunity with those members as well," Perry says.

In phase two, he anticipates adding four or five medications (including omeprazole) that did not have a generic available last year, but which are expected to be available in a less expensive generic form soon. "Although we’re only looking at a handful of drugs, they are blockbusters’ that are used for common illnesses like diabetes and high blood pressure, and represent significant savings for our customers."

Overall, BCBSM estimates that it saves its customers nearly $17 million for every one-percentage-point increase in generic drug use. Through the combined efforts exerted by the generic drug program, BCBSM says it has saved its customers an additional $16.2 million during the most recent nine-month period since its campaign began. In addition, BCBSM estimates that its members have saved $1.4 million during this campaign.

"This kind of program is one way health plan members can participate in keeping the cost of health care coverage affordable," Perry says.