Therapy Patterns Result in PBMs Dispensing Fewer Generics

BenefitNews.com, July 29, 2004

Some in the community pharmacy industry have accused pharmacy benefit managers of cheating employers out of potential cost-savings because they dispense generic drugs less frequently than retail pharmacies do. But a new analysis suggests the discrepancy has little to do with PBMs' interest in getting rebates from pharmaceutical manufacturers for selling brand- name medications.

The overall generic-dispensing rate for PBM mail-order pharmacies is nearly 39%, while that of retail pharmacies is closer to 49%, researchers at Harvard Business School found.

But the incongruity is almost entirely explained by differences in therapies pursued in the retail versus the mail-order market. Consumers are more likely to use mail-order to purchase ongoing medications for chronic conditions such as high cholesterol, but they turn to their neighborhood pharmacy to treat acute conditions such as food poisoning.

"Many therapeutic categories for chronic conditions are relatively new and, as a result, do not face generic competition. At the same time, many acute conditions are treated with older drugs that solely because of their age have more generic competitors and, in turn, higher generic-dispensing rates," Marta Wosinska and Robert Huckman write in the study, published on the Health Affairs Web site.

Copyright © 2004, Thomson Media.
© 2004 Prescription Solutions.

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