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

Generics… What do consumers

think?What do consumers do?

Emily Cox, PhDExpress Scripts

William Shrank, M.D., M.S.H.S.Harvard Medical School and

Division of Pharmacoepidemiology and Pharmacoeconomics

Brigham and Women’s Hospital

2008 Express Scripts, Inc. All Rights Reserved.

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Generics Vastly Underutilized

In Many Therapy Classes


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Generics Vastly Underutilized

In Many Therapy Classes

Source: ESI Internal Research


4

$20 Billion in Potential Savings

Therapy CategoryTherapy Category2007 GFR 2007 GFR

ActualActual

2007 GFR 2007 GFR

PotentialPotential

Potential Potential Savings Savings ($000s)($000s)

Contraceptives 63.3% 90.0% $405,622

Antidiabetics 55.1% 60.0% $593,507

Beta Blockers 76.8% 89.0% $495,529

Antihypertensives 58.9% 83.0% $2,340,994

Antihyperlipidemics 37.9% 80.0% $4,584,257

Antihistamines 55.3% 95.0% $491,420

Systemic/Topical Nasal Products

46.4% 90.0% $474,027

GI medications 38.6% 95.0% $5,659,682

Antidepressants 66.8% 88.0% $2,680,876

Antipsychotics 26.7% 30.0% $123,636

Hypnotics 47.9% 70.0% $559,912

Narcotic Analgesics 95.5% 97.0% $259,043

Anticonvulsant 51.6% 73.0% $1,421,268Source: ESI Internal Research


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$20 Billion in Potential Savings

Therapy CategoryTherapy Category2007 GFR 2007 GFR

ActualActual

2007 GFR 2007 GFR

PotentialPotential

Potential Potential Savings Savings ($000s)($000s)

Contraceptives 63.3% 90.0% $405,622

Antidiabetics 55.1% 60.0% $593,507

Beta Blockers 76.8% 89.0% $495,529

Antihypertensives 58.9% 83.0% $2,340,994

Antihyperlipidemics 37.9% 80.0% $4,584,257

Antihistamines 55.3% 95.0% $491,420

Systemic/Topical Nasal Products

46.4% 90.0% $474

GI medications 38.6% 95.0% $5,659,682

Antidepressants 66.8% 88.0% $2,680,876

Antipsychotics 26.7% 30.0% $123,636

Hypnotics 47.9% 70.0% $559,912

Narcotic Analgesics 95.5% 97.0% $259,043

Anticonvulsant 51.6% 73.0% $1,421,268

• $20B for 157M commercially insured

• More than double across entire US

• $20B for 157M commercially insured

• More than double across entire US


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An

nu

al S

ale

s $

Bill

ion

Imitrex

LamictalRisperd

al

Fosamax

Effexor XR

Other

ValtrexTopamax

Prevacid

Other

Cozaar/Hyzaar

Lipitor

Other

LevaquinZyprexa

Actos

Protonix

Other

Generic Pipeline is StrongMore than $65 billion within the next five

years

Adderall XR Seroquel

Lexapro

Plavix

Singulair

Other

Depakote

FlomaxDiovan/HCT

$13.1 Billion

$10.3 Billion

$13.7 Billion

$9.1 Billion

$19.6 Billion

Other


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Increased Rate of Compliance with Generics

Source: Shrank WH et al., Arch Intern Med. 2006;166:332-337.

Percent of Days Covered

Formulary status of the initial prescription


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Historic Levers to Get to Generics

• Benefit design– Tiered copayments – Step Therapy

• Education and engagement

Formulary change only

0% 10% 20% 30% 40% 50%

retail / mail rxsretail /

mail rxs

retail rxsretail rxs

mail rxsmail rxs

Effect of Consistently Framed Messaging

Consistently framed messaging

doubled and tripled effect of

formulary change alone

Fraction switching to lower-cost option

+ framed messages

$11 to $15

0 1 2 3 4 5

1.91.9

2.92.9

5.25.2

Effect of Brand/Generic Copay Differentials

Absolute increase in GFR relative to $0-$10

$16 to $20

$21 +

Source: Mager & Cox. AJMC 2007 Source: ESI Research


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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?


We asked what they thought.

We measured what they did.

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We Asked What They ThoughtWe Measured What They Did


Are Generics Safer and More Effective?


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No Clear Advantage for Brands

Percentage who agree

Generics and brands with relatively little difference

Generics and brands with relatively little difference


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No Clear Advantage for Brands

Generics clearly the winner on

issues of cost

Generics clearly the winner on

issues of cost



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So Why Doesn’t Everyone Prefer Generics?



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So Why Doesn’t Everyone Prefer Generics?



Various Paths to a Prescription

AWP- or WAC-based Negotiated Payment

Share of Rebates from Manufacturer

Payment

Negotiated Discount/Rebate for Drugs (volume, market

share, formulary placement)

WAC-based Payment Subject to Prompt Pay/ Other Terms

Drugs

Drugs

WAC-based Payment

Drugs

Cost Sharing/ Payment

Premium

Drug Manufacturer

Wholesaler

Beneficiary

Pharmacy

Pharmacy Benefit Manager

Flow of Funds

Flow of Prescription Drugs

Provider (hospital, physician)

Chargeback

Drugs WAC-based Payment

ASP-, AWP- or WAC-based Negotiated Payment

Negotiated Discount/Rebate for Drugs

Drugs

Cost Sharing/ Payment

Negotiated Discount/Rebate for Drugs (volume, market share)

Health Plan/Payer

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3

4

AMCP Guide to Pharmaceutical Payment Methods, www.AMCP.org


Physicians Unaware of Pharmacy Coverage

Shrank et al. AJMC, 2005


Physicians Don’t Feel Accountable

Shrank et al. AJMC, 2005

“Doctor, who should talk with your patients about lower cost Rx choices?”

“Doctor, who should talk with your patients about lower cost Rx choices?”


“Do You Talk With Your Doctors About Drug Costs?”

Shrank et al, Journal General Internal Medicine. 2006

Most patients never talk to their doctors about drug costs

Most patients never talk to their doctors about drug costs


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Comfort Does Not Drive Behavior

61%

67%

0% 25% 50% 75%

My physician asks me

My pharmacist asks me

I ask my physician about generics

I ask my pharmacist about generics

I'm comfortable asking my pharmacistto substitute with a generic

I'm comfortable asking my physician tosubstitute with a generic


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33%

34%

61%

67%

0% 25% 50% 75%








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19%

24%

33%

34%

61%

67%

0% 25% 50% 75%








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Divergence of Opinions Regarding “The Rules”

42%

42%

44%

59%

31%

37%

37%

31%

0% 20% 40% 60%

Healthcare companies shouldcreate rules

Private insurers should create rules: try generics first

Gvmt should require Medicarepatients to try generics first

Pharmacist can guide switching

Agree Disagree


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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


Patient Variation in Preferences


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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”


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

Documents

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