Blue Cross revives free generic drug program

Insurer wants to boost use of cheaper alternatives among members

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CORRECTION

A story on the front of Monday's Triangle & Co. section about Blue Cross and Blue Shield's free generic drug program incorrectly reported that Wal-Mart, Target and other drugstore chains offer cheap co-payments on generics. The chains are discounting generic drugs but cannot give a discount on co-payments.

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The state's largest health insurer is reviving a program to provide free generic prescription drugs to about 1 million members.

Blue Cross and Blue Shield plans to announce today that it will waive co-payments for generic drugs from Jan. 1 to June 30. The program is designed to encourage some members to switch to cheaper medicines. For patients taking drugs to treat chronic conditions, it's also a way to increase medication use during an economic downturn.

"We don't want folks to have to choose between paying for prescriptions and paying their bills," said Ron Smith, vice president of employer health and corporate pharmacy. "This is another way Blue Cross is able to save our members money and ultimately improve their health."

A similar, but bigger program in 2006 saved members about $50 million, Blue Cross estimates. This time, the Chapel Hill-based insurer projects savings of $10 million, mostly because of more limits on the offer.

Blue Cross foots the bill, but the expense is offset by a decrease in the amount the insurer pays overall for drugs. The average brand-name drug now costs $130 for a month's supply, compared to $19 for the average generic, Smith said.

In recent months, the company has seen members' prescriptions flatten overall, which is concerning, Smith said. "Obviously, the prevalence of diseases isn't flat."

He said it's too soon to tell whether drug use will fall next year if the recession worsens.

The free co-pay program is part of a wider effort to boost generic use and reduce surging drug costs.

Federal regulations allow for generic versions of medicines after brand-name drugs lose patent protection. That hurts the pharmaceutical companies behind the original drugs, but it offers cheaper alternatives for consumers.

Blue Cross promotes generics to prescribing physicians. Wal-Mart, Target and other drugstore chains now offer cheap generic co-pays. Regulators have said a priority is increasing the number of generics available.

In this state, the amount spent on prescription drugs increased nearly 50 percent faster than total health costs from 1991 to 2004, the latest data available, according to the N.C. Institute of Medicine, a nonprofit organization that analyzes health issues in the state.

Programs such as this one from Blue Cross "tend to be effective at encouraging people to purchase the generic version of the drug, saving the consumer and the insurer money for an equally effective treatment," said Mark Holmes, vice president of the institute.

There are limits to Blue Cross' program. It's not available to groups for which the insurer only administers coverage, including state and federal workers. And members with annual drug deductibles must meet that requirement first. Blue Cross has about 3.7 million members.

One consumer advocate points out that there are larger problems that need to be addressed, such as the rising number of uninsured people and soaring insurance premiums.

"More free generics are nice but really don't go far enough," said Adam Searing, project director for the N.C. Justice Center's Health Access Coalition. "They aren't going to be enough at all to address the overall problem of skyrocketing health costs."