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Two large Blue Cross and Blue Shield plans serving Medicare members--Highmark and Trigon--have increased their generic dispensing rates, which they say translates into substantial cost savings.

The strategy of Pittsburgh-based Highmark Blue Cross Blue Shield for its Medicare+Choice product includes offering generic drug samples to network physicians, measuring generic substitution rates among its network pharmacies, and trying to inform members of generic options through informational brochures and newsletters.

Partly as a result of these strategies, and partly due to market forces, Highmark officials tell AIS that its SecurityBlue M+C product has seen a 0.5% rise in its generic dispensing rate from 2000 to 2001. They explain that the increase from 45.6% in 2000 to 46.1% of last year's total represents a reduction of approximately $500,000 in drug costs for SecurityBlue over the period.

"We have a lot of different mechanisms in place at Highmark Blue Cross Blue Shield to encourage members to use generics when appropriate," explains Patrick Kerrish, R.Ph., MBA, Highmark's vice president of medical and pharmacy affairs.

Kerrish participated in an April 25 forum in Washington, DC, held by the BlueCross BlueShield Association to discuss Blues plans' programs designed to heighten awareness and increase the use of generic drugs by physicians, consumers, and pharmacies.

Trigon Posts Big Gains in Generics

Similar to Highmark, Trigon Blue Cross Blue Shield in Richmond, VA, claims success in promoting generics to its members and network physicians and pharmacies. Ron Lyon, Trigon's vice president of pharmacy, tells AIS that the company showed 4% to 5% improvement in total scripts dispensed as generics in the Medicare population, comparing first quarter 2002 with first quarter 2001. He attributes the shift to physician education, cost-conscious Medicare beneficiaries seeking lower out-of-pocket expenses, and pharmacies that find a better margin on generics than on brand-name drugs.

Lyon says more than 550 physicians have responded to a mailing from Trigon and requested generic drug samples. Trigon also is providing a quarterly summary of prescribing patterns to more than 5,700 network physicians representing more than half of total prescription drug costs. He says summaries began last year with 3,700 physicians, who changed prescribing patterns to such an extent that their cost trends ended up almost 5% lower than those for physicians not receiving input. "We're going beyond saying you're writing a brand name that has a generic on the market," he says. "Our program also focuses on brand names without generics yet on the market," and describes cost-saving substitutions of therapeutically equivalent pharmaceuticals for more expensive brand-name drugs.

By year's end, Trigon, which lacks a full-risk Medicare HMO but covers 115,000 beneficiaries under Medicare supplemental insurance products, plans to introduce an interactive online listing of prescription drugs. Lyon says this program will allow members to search by drug name or disease category, find out about cost-saving alternative drugs, and send the information to their physicians for consideration.

Highmark Uses Multifaceted Approach

Similar to Trigon, Highmark's programs encouraging access to generic drugs target both Medicare and commercial members. But Kerrish says the programs clearly impact Medicare enrollees to a greater extent than they affect commercial enrollees because of the higher utilization of pharmaceuticals among seniors. He notes that 91% of SecurityBlue's 180,000 members in 17 counties in western Pennsylvania got prescriptions filled in 2001, versus 77% of commercial members. It averaged out to 924 days of drug therapy per Medicare member, versus 310 days per commercial member.

Highmark's multifaceted approach includes sending out generic-drug information in newsletters to members and throughout its network of roughly 9,000 participating physicians, Kerrish says. He adds that the company is stepping up its efforts to help physicians understand cost differences between generics and brand-name drugs, and to increase availability of generics. Highmark also is targeting pharmacies, he says, offering them financial incentives to dispense generics, and the company is continually working on changes to benefit design and formularies that also drive generic utilization.

Kerrish says the most common three-tiered pharmaceutical copayments for SecurityBlue are $12 for generics, $20 for formulary tier 1 brands, and $30 for formulary tier 2 brands. That is up from last year's copays of $10, $15, and $30, respectively.

In addition to increased member cost-sharing, he says, Highmark has put an electronic prescribing tool, called NaviNet, in 200 of its physicians' offices. The device, which alerts the physician if a generic is available for a prescribed medication, was piloted last year in 25 doctor offices; wider distribution began in March. Highmark's goal is to get the device into approximately 2,000 physician offices by year's end. He says the tool could make a big difference in cost savings "if we can get [physicians] to use it."

In the generic sampling program, Highmark is working with Merck-Medco to provide physicians with samples of generic drugs in targeted categories including antidepressants, antihypertensives, and nonsteroidal anti-inflammatory drugs (NSAIDs), Kerrish explains. He says that since the program's inception in January 2001 for both commercial and Medicare members, 650 physicians have placed orders for generic drug samples in western Pennsylvania. This accounts for slightly more than 84,000 samples representing about 502,000 days of drug therapy.

While cost savings from generic samples have not been calculated, Kerrish says savings are a certainty given that the average cost for a generic drug is $14 to $15, versus $64 to $65 for a brand-name drug. "We're trying to increase awareness of generic drugs and provide physicians with the opportunity [to try generic as well as brand-name samples], he says, "and members can see whether a product works and potentially avoid copays."

As part of the generic sampling program, Kerrish notes Highmark sends out informational brochures for physicians to hand out to patients. He says Highmark also profiles individual physician prescribing practices. This includes comparing a physician's rates of generic substitution with those of his peers and then discussing options for optimizing generic drug use.

In addition, a few years ago Highmark began measuring generic drug substitution rates on a quarterly basis among the 1,000 pharmacies in its network in western Pennsylvania.

If a pharmacy meets a threshold level, then the MCO will pay a higher dispensing fee for all the generics that the pharmacy dispenses in the following quarter.

"We have seen the generic substitution rates increasing," Kerrish says, asserting that the program seems to be responsible, along with market forces such as pharmaceutical products coming off patent and changes in benefit design. He notes that Prilosec and certain ACE inhibitors are scheduled to come off patent soon, which could offer substantial savings in the cost of caring for managed Medicare members.