[Ip-health] American Insurers Paying for Generic Drug Marketing

[Benjamin Krohmal]

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[ Picked text/plain from multipart/alternative ]

09/17/2006 08:35:52 AM EDT
Chicago Tribune (KRT)

Sep. 17--When Ray Metz went to see his doctor for his high blood
pressure earlier this year, he was not surprised to get a free drug
sample. Only it wasn't a well-known brand.

Instead it was a generic drug by the name of Lisinopril, a copy of
the more expensive and better-known Zestril.

"The generic samples were given to me, and the price was right," said
the 45-year-old psychiatric nurse from Pittsburgh. "I don't see any
more reason to use an expensive brand with health-care costs the way
they are. The cheaper prices, the better."

Welcome to the new front in the multibillion-dollar war to get drugs
in the hands of consumers.

As a hospital nurse, Metz has seen dozens of perky drug sales
representatives file into the hospital where he works, armed with
pens, notepads and, most important, satchels of brand-name drug samples.

Now private insurers are taking a page out of the brand-name
pharmaceutical industry's marketing playbook.

They are showering consumers with free generic drug samples, waiving
co-payments and marketing directly to consumers in doctors' offices,
where brand-name drug salespeople are omnipresent.

They are there to encourage the use of cheaper, generic prescription
drugs.

The pharmaceutical industry spends billions on food, trips and other
perks for doctors and staff to encourage them to prescribe the latest
in brand-name pills. Their campaigns almost always include free brand
samples delivered to doctors so they can pass them on to consumers.

Because the makers of low-priced generic drugs employ virtually no
such sales army, doctors are more likely to write prescriptions for
the latest, most expensive brands, which critics blame for escalating
the nation's drug tab.

But now, health insurers are fighting back in a way that consumers
can appreciate.

In addition to eliminating co-pays, health plans are paying to
install ATM-like machines in medical offices that allow physicians to
dispense up to 30 days of free generic medication. The machines
automatically track what has been used and send an alert when they
need refilling. Before, doctors gave away brand-name drugs provided
by pharmaceutical sales reps who stop in regularly to replenish
supplies.

Patients like the chance to try the generic and see if it works for
them, said Dr. Andrew Sullivan, a family physician at PennCare
Yardley Medical Center in Pennsylvania.

Sullivan has had a generic drug dispenser in his office for nearly
five months.

Change in thinking

"They like to take generics for a test drive. They also don't have to
pay their $50 co-pay to see if they work," Sullivan said, adding that
he thinks the machines' presence helps balance a doctor's thinking.

"When you have seen so many drug reps and you're hit all of the time
with their pitches, it takes some time to change the way you think,"
Sullivan said. "You are hearing all of the [brand] drugs mentioned
all of the time. There is no way to advocate for the generics because
there are so many manufacturers making them, so it is nice to be able
to have the generic samples in the office and be able to have it on
the radar."

The aggressive campaign by health plans comes as a large number of
branded drugs are coming off patent protection and face unprecedented
vulnerability to generic competition.

This year alone, drugs representing an estimated $20 billion in brand-
name sales lose patent protection--including blockbusters such as the
cholesterol pill Zocor and the antidepressant Zoloft.

Both drugs, perennially among the Top 10 in generating consumer and
health-plan prescription costs, have become available in generic
form. Next month the cheaper copy of popular sleeping pill Ambien is
expected to be available in a generic.

Insurers are not only hoping to get patients to use the copy, they
are also trying to woo patients taking similar medications in the
same class of drugs. For example, plans would like to see someone
taking an antidepressant other than Zoloft try the new generic to see
if it works for them.

Even getting a small number to shift can reap big benefits to the
bottom lines of private insurers and employers.

"A 1 percentage point movement in generic dispensing can result in a
1 percent drop in drug spending," a spokesman for pharmacy benefit
company Express Scripts Inc. said.

Because these blockbuster brands and rivals in their classes are so
widely used, they cost consumers $3 to $5 a pill. That's often 30
percent to 50 percent more than generics, depending on the drug.

Among cholesterol drugs known as statins, sales last year were $16
billion in the U.S., and about one-third of those drug sales came
from two brands, Zocor and Pravachol.

In addition, consumers with drug coverage could save up to $300 a
year per prescription--the $20 or more a month co-pay difference
between brand and generic--by taking health plans up on their offers
of free generics and waived co-pays.

Some of the nation's biggest insurers, such as Aetna Inc. and
Wellpoint Inc., which does business in Chicago as Unicare, are
offering such deals to encourage switching.

Health plans such as Blue Cross and Blue Shield of Illinois are
trying to achieve the same thing by stepping up direct-mail marketing
of generics to consumers to combat direct-to-consumer ad spending on
television and magazine ads by brand-name drugmakers.

"This year is so important because of the number of blockbuster drugs
that have become available as generics," said Dr. Stanley Borg, chief
medical officer for Blue Cross and Blue Shield of Illinois.

"This really is a landmark year in the numbers and the utilization
that the generics have become available," he said.

Generics are medically identical to the brand-name drug they are
copying. But insurers also encourage switching from other brands in
the same class, despite protests from brand drugmakers who claim
clinical differences and variances from patient to patient.

The makers of cholesterol brands Crestor and Lipitor, for example,
tout benefits over the generic form of Zocor, citing their own
studies and patient experiences.

The brand-name drug industry provides free samples valued at more
than $15 billion annually in the U.S. and spends an additional $7
billion each year on marketing to doctors in their offices,
statistics from market research firm IMS Health show.

The makers of generics, trying to keep costs low, spend little on
marketing.

"Generic drugs have no real estate in the physician's office," said
Rob Seidman, Wellpoint's chief pharmacy officer. Doctors use samples
to provide their patients with the ability to walk out the door with
an instant treatment. With in-office kiosks of generics, doctors
suddenly have the choice of offering a brand name or generic.

Program expanded

Aetna is expanding a program that began last year of putting generic
drug dispensing machines in doctors' offices that allow physicians to
provide 30-day supplies of generics to their patients. Depending on
the physician's specialty, a machine could have about two dozen
different products that treat 10 or more conditions.

Typically the generics stocked are for widely prescribed conditions
such as arthritis, high cholesterol, diabetes or high blood pressure.

MedVantx Inc., a San Diego-based company that supplies nearly 20
health plans, including Aetna, says more than 1,800 doctors in seven
states are providing generic drug samples with its machines.

Illinois is not one of them, but Aetna and MedVantx are not ruling
out an expansion here.

MedVantx's chief executive officer, Rob Feeney, said the concept "is
just getting going . . . to create a level playing field for generics
at the point of care vis-a-vis the branded pharma model."

But health plans have their work cut out for them. The pharmaceutical
industry's army of sales representatives for brand-name drugs has
mushroomed to more than 100,000 in the U.S.--one for every seven
practicing physicians. That's nearly triple the number compared with
just a decade ago, according to market research firm Verispan.

On another front, Aetna and Wellpoint this month are rolling out
generic programs in an attempt to sway their health-plan members to
choose the generic form of Zocor (Zocor lost brand patent protection
in June) instead of other popular brands. Aetna will soon implement a
program that waives co-payments for health-plan members for six
months for patients who choose generic Zocor, known under the name
Simvastatin, over brands like Lipitor, Crestor and Vytorin.

Any Aetna health-plan member who had been paying a co-pay, typically
around $10, will not have to pay it for six months. The savings
difference between brand co-payments and no co-payment would be $20
to $50 a month, depending on the Aetna member's plan.

Wellpoint, too, is targeting consumers with free generics and waived
co-payments for certain highly prescribed drugs for which there is an
equivalent generic. Wellpoint said cholesterol drugs are this year's
priority but other drugs also qualify in the program.

Wellpoint waives a health-plan subscriber's co-payment for the first
prescription filled at the retail pharmacy and the first mail-order
pharmacy prescription for the same drug. Because mail-order
prescriptions are typically in 90-day supplies, Wellpoint subscribers
may be able to "obtain a four-month supply of select generic drugs at
zero dollars co-pay," a Wellpoint spokesman said.

Neither Wellpoint nor Aetna would disclose how much they are spending
on generic sampling and the waived co-payments, but both say it is a
"fraction" of what the brand industry spends on marketing. That could
hinder their efforts .

"Our piece is a fraction of what the brand-name industry spends but
is a focused spend," Eric Elliott, Aetna's head of medical related
products, said. "This is not a silver bullet and not the program that
is going to change the world. But we are trying to change the
prescribers' habits."




Benjamin Krohmal
Research Associate
Consumer Project on Technology
Tel: +1-202-332-2670 ex. 14
Fax: +1-202-332-2673
ben.krohmal@cptech.org