How does encouraging the use of generic prescription drugs help save money on premiums?
When more members of a health plan use generic drugs instead of expensive brand-name drugs, it helps decrease the overall spending for pharmaceutical costs, which translates into decreased premiums for the employer or employees when renewal time comes around. It also saves out-of-pocket money for the employee since co-pays are usually significantly less with generic prescription drugs; sometimes the co-pay is even waived with generic drugs. How much can an employer or its employees save in premiums using generic prescription drugs instead of brand-name drugs? It varies, depending on the plan. Research shows that for every 1 percent increase in generic fill rate there is a decrease of 1 percent in overall pharmaceutical costs. According to nationwide study, there is a $20 billion missed savings potential because of underutilization of generics within the commercially insured market. The savings opportunity from increased use of generic drugs increases every year. In the next five years,
