Local News

N.C. Health Insurer To Temporarily Waive Generic Drug Co-Payments

Posted January 26, 2006 7:26 a.m. EST

— The state's largest health insurer, Blue Cross Blue Shield of North Carolina, is making it easy and free for its members to use generic drugs.

  • On The Web:

    Blue Cross Blue Shield of North Carolina

    Beginning Feb. 1, the company begins its co-payment waiver program, which the company says could save members about $36 million in generic drug costs.

    A nonprofit company, Blue Cross Blue Shield has enjoyed record profits in recent years. Meanwhile, premiums continue to rise. Lowering drug costs, which could be done in part by purchasing generic drugs, would not decrese premiums, but could help slow the rise.

    Ron Smith, senior director of corporate pharmacy, said the average cost, from Blue Cross Blue Shield's perspective, for a name brand prescription is $93, compared to $19 for generic prescriptions.

    "Prescription drugs account for about 20 percent of every premium dollar," Smith said. "So, if we can slow that increase, then again, we can potentially slow the first of premiums in the long-term."

    Generic drugs are equivalent to corresponding brand-name drugs in active ingredients, dosage, strength, safety and performance. But generic drugs, the company says, typically cost 30 percent to 70 percent less than comparable brand-name drugs.

    The co-payment waiver program began in 2004, when members saved about $17 million over a three-month period. During that time, Blue Cross Blue Shield found that about 22 percent of customers switched to generic drugs -- some of them permanently.

    Despite the $36 million it will cost Blue Cross Blue Shield to waive the co-payment over the next six months, experts say it would be well worth it if the switch were permanent.

    "If they're able to get people to switch from higher-cost medications, like brand-name prescription drugs to generic, it's going to end up saving more than that in the long run," said Duke University health management professor Dr. Kevin Schulman.

    Schulman said that if -- by paying less -- people are more compliant in taking medication, the move could improve general health, also driving down costs.

    "This has an opportunity to directly impact health care costs in the future, which would lower premium costs -- not just today, but down the road, if in fact, they figure out a magic bullet to help us stay on medications and help reduce our future health care costs," he said.

    A recent survey by the Kaiser Family Foundation discovered half of respondents took at least one prescription drug. About 35 percent of those Americans said they had some trouble paying for their medication.

    The survey also found that than 20 percent of healthy adults have skipped medical treatment, not filled a prescription or cut their medication because of cost.