Public Employee Press

Part 3 of a series on Prescription Drug Costs
Save big with generic drugs

Over the years, the DC 37 Health and Security Plan has encouraged members and retirees to use generic drugs to help cope with the skyrocketing cost of prescription medications.

By using generics and reducing purchases of higher-priced brand-name drugs, participants have saved themselves and the plan millions of dollars.

But many workers and retirees continue to opt for brand-name drugs instead of generics. That decision can result in hefty out-of-pocket expenses for individuals, because the plan requires enrollees to pay the difference between the cost of a brand-name drug and its generic equivalent.

The plan provides members and retirees with an economic incentive to use generic drugs. A 30-day supply of drugs purchased at a pharmacy has a $3 co-pay for generics, $8 for drugs on the plan’s preferred list and $15 for non-preferred drugs. By mail, a 90-day supply costs $6 for generics, $16 for preferred list medications and $30 for brand-name drugs not on the list.

Pharmaceutical companies can charge high prices for brand-name drugs because 20-year patents give them monopolies on new products. After that period, competitors may produce a generic version, which uses the chemical name of the medication. Generics cost from 30 to 50 percent of comparable brand-name drugs.

“Our members and retirees have generally become comfortable about using generic drugs,” said Rosaria R. Esperon, administrator of the DC 37 Health and Security Plan. “But many people are still reluctant. They shouldn’t be concerned, because a large body of evidence shows that generics are as effective and safe as their brand-name counterparts.”

Generics must meet the guidelines of the U.S. Food and Drug Administration. To grant approval, the FDA must determine that the generic is “therapeutically equivalent” to its brand-name counterpart. This means they contain the same active and inactive chemical ingredients and have the same medical effect.

“Soaring drug costs have led politicians to propose legislation to promote generic drugs, allow importation of drugs from Canada and create a Medicare prescription drug benefit,” said DC 37 Executive Director Lillian Roberts. “In the absence of a legislative solution, we can play our part at home by being savvy consumers and using generic drugs whenever possible.”

—Gregory N. Heires