When a patient uses a generic pharmaceutical, it saves everyone in the healthcare system money. As insurance and pharmaceutical companies begin to incur new taxes with Obama Care, there are no new taxes or regulations that will adversely affect pharmacy benefit managers, whose primary responsibility is to help employers and insurers reduce the amount people spend on medication.
President Obama’s Affordable Care Act, or Obama Care, has increased the benefits available to many Americans with health insurance, leading to the increased amount of purchases of pharmaceuticals. The rush is on to market and raise awareness of the available generics to save people money, and hopefully keep Americans healthy moving forward; therefore, saving the healthcare system money. In the frenzy to educate the newly insured public about the availability of cheaper prescriptions, some generic pharmaceutical companies will be looking for ways to provide incentives for drugstores and other retailers in order to sell their products.
There’s a wave of the industry’s most popular drugs, such as Lipitor and Plavix, whose patents have recently expired or will soon expire. As a result, there will be increased competition from generic pharmaceuticals, driving prices down for consumers. Since it is easier for consumers to acquire and afford these medications, ideally, they will stay healthier and costs will go down within the healthcare system. Together with these expiring patents and a provision within Obama Care that allows the FDA to approve generic drugs much faster, the market will soon be flooded with reasonably priced medications.
Closing the Gap
Under Medicare’s prescription drug program, Part D, there is a coverage gap once your drug costs reach a certain limit. Currently after reaching this limit, you are responsible for paying the entire cost of prescription drugs until (or if) you reach the level deemed “catastrophic.” Obama Care attempts to fix this “donut hole” by offering discounts on prescription drugs during the time you are in this gap.
In 2013, you would have paid 47% of brand-name drugs and 79% of generic drugs. In 2014, this changed to 47.5% of brand-name drugs and 72% of generic drugs. The percentages of generic drugs drops slightly from year to year, as the goal is for the gap to be closed by the year 2020 and then only usual drug co-pays will apply.
Pharmacists within ACO’s
ACO’s, or accountable care organizations, are a novel way to slow rising healthcare costs and improve quality of care. Recent data suggests that moving patients from uncoordinated care systems to integrated care systems, that provide coordinated provider care, could reduce healthcare costs by 35%.
An essential component in any ACO is the participation of the pharmacist. Long-term studies over the last 25 years have shown that pharmacists participating in team-based care models have made positive contributions to patient care and safe medication use.
Pharmacist-provided care can reduce drug expenditures, hospital re-admissions, lengths of stay, and emergency department visits. Among other important clinical and efficiency measures, pharmacists in ACO’s analyze and, as a result, often increase the amount of generic medications prescribed. With their firsthand knowledge of generic pharmaceuticals—in both cost savings to the patient and medical name-brand drugs—they play a crucial role in team patient care.
While Obama Care is certainly still ironing out its wrinkles, the system’s overall goal is to provide quality healthcare to all Americans. Generic pharmaceuticals are just one piece of a healthier American puzzle.
Joseph Trentin is Co-Principal and founder of MedPharm, the leading provider in high quality generic pharmaceuticals and health care products. Founder of the Central American Conference, Joseph is also Pro baseball player for the Chicago White Sox and LA Angels.