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Potential Savings from Generic Drugs in
Upstate New York
$880 Million in Potential Savings for Upstate New York Counties
Finger Lakes Region
Estimated annual savings
$141 million
Western New York Region
Estimated annual savings
$74 million
Central New York Region
Estimated annual savings
$289 million
Utica/Rome/North Country Region
Estimated annual savings
$229 million
Southern Tier Region
Estimated annual savings
$149 million
Estimate of potential savings if the prescription drug generic fill rate in each county of a
region increased to equal the county with the highest generic fill rate across the 39 upstate
New York counties.
Based on January-June 2005 drug utilization data from FLRx that provides pharmacy
benefit management services for more than 1.3 million people in upstate New York.
Across the nation, the cost of prescription drugs has been widely cited as a major factor in the
rising cost of health insurance premiums. About 19 percent of the benefits expense for a typical
upstate New York health plan is spent on pharmacy benefits. Prescribing patterns, however,
can vary significantly from region to region.
As shown on this map, if every county in upstate New York were to increase its “generic fill rate” to
match that of the highest performing county, the total annual savings would exceed
$800 million.
The generic fill rate is the percentage of all prescription drug “fills” that are generic drugs. One
prescription fill is conventionally defined as a 30-day supply of drugs for treatment of a chronic
condition, such as high blood pressure, or a single course of therapy for drugs used for treatment of
acute conditions, such as a bacterial infection.
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While there are clear variations in the generic fill rates of the five upstate New York
regions analyzed in this report, there also are variations in the generic fill rates of
the individual counties within each region.
These variations at the county level result in a range of savings
opportunities within each region. These county-level savings
opportunities are outlined in the tables below.
*Estimate of potential savings if prescription drug generic fill rate increased in each age
group to the highest county rate for that age group of 39 Upstate New York counties.
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Prescribing Variations by Age Group
Medical need drives prescription drug use. The number and type of drugs prescribed varies greatly from person to
person. However, for any large population, the number and types of drugs needed are very strongly associated with
age. Each of the nine age groups used in this study has a different pattern of medical conditions being treated, as well
as different therapeutic categories of drugs selected to treat them. Medical needs are also associated with other
characteristics of populations (including behavioral factors such as diet, physical activity, and social support).
As shown in these charts, the “generic fill rate” can vary
significantly by age group. For example, the benchmark
generic fill rate for the age 0 – 4 group is 72.3 percent,
compared with the best practice generic fill rate of 57.1
percent for the for the 55 – 64 age group.
The potential savings within each age group reflects what
would happen if every upstate NY county in this study
increased its generic fill rate to equal the highest county
rate for that age group. The savings potential also reflects
the population of each age group, based on U.S. Census
Bureau data.
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Prescribing Variations by Region
Prescribing patterns within each age group also vary from region to region. The tables below show the range of
generic fill rates by age group for each of the five upstate New York regions. Within a particular age group, these ranges
can vary significantly.
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Savings Opportunities within Drug Therapies for Common Conditions
The following pages profile the generic opportunities and cost savings associated with several widely used drug
therapies that treat the following common conditions: heartburn/acid reflux, high cholesterol, and depression.
• For simplicity, we've profiled just one drug category
used to treat each of three common conditions. For
each of these conditions, there are multiple drug and
non-drug therapies that are useful in treatment. The
discussion of just one category per condition does not
suggest that this category is the preferred treatment for
all patients. An individual’s health care provider should
determine the best course of treatment.
• The three categories in this report are typically responsible for between 20-25% of a health plan’s total drug
expenditure.
• Prices among brand, generic and over-the-counter
(OTC) drugs can very significantly.
Condition
Treated
Drug
Category
Brand
Cost*
Rx Generic
Cost*
OTC generic
Cost
Savings opportunity
per Rx (30 day supply)
Heartburn/Acid Reflux
PPIs
$154
$48
$24
$130
Statin drugs
$155
$30
N/A
$125
SSRIs
$105
$ 5
N/A
$100
High Cholesterol
Depression
*represents the min/max for a usual 30-day supply for that category.
The costs cited for brand drugs are based on the average wholesale prices listed in the Medispan national database
as of 10/17/05. Generic drug and OTC prices are based on costs and reimbursement levels established for these drug
classes by commercial insurers. An individual member may pay only a small portion of the total cost through their
benefit copay or coinsurance (e.g., $5-$10 for a generic and $20-$50 for a brand).
The pages that follow provide a more detailed overview of generic/OTC drug opportunities in each of these three drug
categories. For this analysis:
• For cost comparison purposes, we only include some of the dosage strengths or dosage forms available.
• We depict the generic fill rate for this category by region. Example: 30% means that 30 out of 100 prescriptions
were for the generic options in that category. This provides a reference point to the type of savings possible.
• We designate which drug has been selected as a Consumer Reports Best Buy.
What is Consumer Reports Best Buy?
The Consumer Reports Best Buy Drug list is a public education project administered by Consumers Union. It is not
affiliated with Excellus BlueCross BlueShield. Consumers Union and Consumer Reports selected the Best Buy Drugs using
the following general criteria. The drug (and dose) had to:
• Be in the top tier of effectiveness among the available agents in their categories
• Have a safety record similar to or better than other drugs in that category
• Have an average price for a 30-day supply that is substantially lower than the most costly drugs meeting the first
two criteria
A more detailed explanation of the project and specific drug class criteria is available at www.CRBestBuyDrugs.org.
Consumer Reports Best Buy Drugs should not be viewed as a substitute for a consultation with a medical or health
professional. This report and the information on www.CRBestBuyDrugs.org are provided to enhance communication
with your doctor, rather than to replace it.
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Savings Opportunity with Treating Heartburn, Ulcers & Stomach Acid Reflux
Focus on Proton Pump Inhibitors (PPIs)
Estimated Heartburn Rx (PPI) Generic Fill Rate by Region
Finger Lakes
Generic Fill
Rate = 27.9%
Central NY
Generic Fill
Rate = 18.2%
Western NY
Generic Fill
Rate = 35.7%
Utica/North
Country
Generic Fill
Rate = 14.4%
Southern Tier
Generic Fill
Rate = 16.5%
Estimated Percent of Upstate New York Age
Groups Using a Proton Pump Inhibitor
What are Proton Pump Inhibitors (PPIs)? PPIs are used to
treat heartburn, ulcers, and stomach acid reflux, also
known as gastroesophageal reflux disease, or GERD. PPIs
work by blocking an enzyme that makes the stomach
produce more acid. This relieves heartburn, which is
caused by stomach acid washing back up into the
esophagus. All PPIs relieve heartburn and help heal the
damage caused by GERD in the majority of people who
take them. They are quite similar in effectiveness and
safety, but PPIs differ greatly in cost.
Age Groups
Drug and Strength
Type
Avg.
1
Cost
1 Average cost/month: a 30-day supply (one dose/day) using the current (10/17/05) Medispan
average wholesale price for brands and approx. discounted reimbursement rate for generic
and OTC.
Nexium (esomeprazole) 20mg
Brand
$153
Aciphex (rabeprazole) 20mg
Brand
$151
2 OTC Prilosec is considered as a generic omeprazole option and covered as a generic drug
under most FLRx drug benefit programs.
Protonix (pantoprazole) 40mg
Brand
$123
Prevacid (lansoprazole) 30mg
Brand
$154
Prilosec (omeprazole) 20mg
Brand
$138
Omeprazole 20mg
Generic
$ 40
Omeprazole 20mg (Prilosec OTC)
Over the
Counter2
$ 24
3 Taking effectiveness, safety, and cost into account, [the Consumer Reports] analysis concludes
that over-the-counter omeprazole (Prilosec OTC) 20mg daily is the Consumer Reports Best Buy
Drug. This is a proven medicine, now available without a prescription. It is as effective for
most people as the more expensive prescription alternatives. All the PPIs relieve heartburn
and help heal the damage caused by GERD in the majority of people who take them and they
are quite similar in effectiveness and safety. Indeed, this very same medicine was not only the
most commonly prescribed PPI before its patent lapsed in late 2002, it was the most widely
prescribed drug in the country. Extracted from: Consumer Reports Best Buy Drugs™
A more detailed explanation of the project and specific drug class criteria is available at
www.CRBestBuyDrugs.org
Consumer Reports Best Buy3
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Savings Opportunity with Treating High Cholesterol
Focus on HMGs – Statin Drugs
Estimated High Cholesterol Rx (HMG) Generic Fill Rate by Region
Finger Lakes
Generic Fill
Rate = 8.2%
Central NY
Generic Fill
Rate = 2.9%
Western NY
Generic Fill
Rate = 13.0%
Utica/North
Country
Generic Fill
Rate = 3.0%
Southern Tier
Generic Fill
Rate = 3.2%
Percent of Upstate New York Age Groups
Using a Statin
What are HMGs – Statin drugs? Statins work by blocking
an enzyme needed to make cholesterol. The body needs
cholesterol to maintain good health. But high blood
levels of certain cholesterol components (LDL or “bad"
cholesterol), as well as low levels of other components
(HDL or “good" cholesterol), are associated with a sharply
increased risk of artery blockage, coronary heart disease,
heart attack, and strokes.
Age Groups
Drug and Strength
Type
Avg.
1
Cost
Lipitor (atorvastatin) 20mg
Brand
$118
Zocor (simvastatin) 20mg3
Brand
$155
Pravachol (pravastatin) 20mg3
Brand
$105
Crestor (rosuvastatin) 10mg
Lovastatin 40mg
Brand
$ 93
Generic
$ 30
1 Average cost/month: a 30-day supply (one dose/day) using the current (10/17/05) Medispan
average wholesale price for brands and approx. discounted reimbursement rate for generic
and OTC
2 Taking effectiveness, safety, and cost into account, [Consumer Reports] has chosen generic
lovastatin as the Consumer Reports Best Buy Drug for this group. This medicine is substantially less expensive than other statins at the recommended doses of 10mg and 20mg. While
the average LDL reduction with generic lovastatin is somewhat lower than other statins may
yield, generic lovastatin will do just as good a job for the majority of people requiring an LDL
reduction of less than 40%. And it has a long safety track record. Extracted from: Consumer
Reports Best Buy Drugs™
3 Generic options for Zocor and Pravachol are expected to become available in mid-2006.
A more detailed explanation of the project and specific drug class criteria is available at
www.CRBestBuyDrugs.org
Consumer Reports Best Buy2
(for LDL reductions <40%)
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Savings Opportunity with Treating Depression
Focus on the SSRI class of drugs
Estimated Depression Rx (SSRIs) Generic Fill Rate by Region
Finger Lakes
Generic Fill
Rate = 51.9%
Central NY
Generic Fill
Rate = 42.5%
Western NY
Generic Fill
Rate = 51.9%
Utica/North
Country
Generic Fill
Rate = 41.6%
Southern Tier
Generic Fill
Rate = 41.8%
Estimated Percent of Upstate New York Age
Groups Using an Antidepressant
What are SSRIs? Antidepressants work primarily by affecting chemicals in the brain called neurotransmitters. The
most important of these are serotonin, norepinephrine,
and dopamine. There are several different types of
antidepressants. The main group of second-generation
antidepressants is called the “selective serotonin
reuptake inhibitors," or SSRIs for short. As implied, they
appear to affect mainly serotonin levels in the brain. This
group includes citalopram (Celexa), escitalopram
(Lexapro), fluoxetine (Prozac), paroxetine (Paxil) and sertraline (Zoloft).
Age Groups
Drug and Strength
Type
Avg.
1
Cost
1 Average cost/month: a 30-day supply (one dose/day) using the current (10/17/05) Medispan
average wholesale price for brands and approx. discounted reimbursement rate for generic
and OTC.
Prosac (fluoxetine) Weekly
Brand
$105
Generic
$ 5
2 Taking the evidence on effectiveness, safety, side effects, and cost into account, Consumer
Reports has chosen 2 of the SSRIs as Consumer Reports Best Buy Drugs as options to consider
in the treatment of depression: generic fluoxetine and generic citalopram. These medicines
are substantially less expensive than other antidepressants, and they are as effective and safe
as any of them for initial treatment. They are also affordable options if a person needs to try
another antidepressant because the first one your doctor prescribed did not help or caused
unacceptable side effects. Extracted from Consumer Reports Best Buy Drugs™
Fluoxetine 20mg
Lexapro (escitalopram) 20mg
Citalopram 20mg
Brand
$ 81
Generic
$ 7
Paxil CR 25mg
Brand
$ 94
Zoloft 50mg
Brand
$ 91
A more detailed explanation of the project and specific drug class criteria is available at
www.CRBestBuyDrugs.org
Consumer Reports Best Buy2
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METHODS
By comparing geographically defined populations (residents of an upstate county), much of the
variation in types and amount of medical needs is eliminated (or “averages out”). Because upstate
New York counties differ somewhat in the age distribution of their residents, this report bases its
analysis on drug use by individual age groups to make the county populations more comparable.
For a variety of reasons, medical care providers in different counties make different choices.
After averaging out drug use by comparing geographically defined populations of similar age,
different choices among therapeutic alternatives (notably, generic vs. brand drug) explain a very
significant fraction of the remaining variation in gross drug cost per person. Gross cost is the sum of
out-of-pocket cost and any prescription drug benefit applied through insurance.
This report applies linear regression methods to FLRx utilization data to estimate the relationships
between the gross cost per person and the generic fill rate for the 39 counties for each of the nine
age groups. The regression models are then applied to actual drug cost for each county in order to
estimate what drug cost would be if the county had a generic fill rate equal to the highest generic
fill rate achieved by any of the counties.
Estimates from our samples are then extrapolated to the total county populations as estimated by
the U.S. Census Bureau (Source: Population Estimates Program, Population Division, and U.S. Census
Bureau. Release Date: August 11, 2005.)
Finally, an adjustment is made to address the issue of “pharmacy network discounts.” One of the
ways that health insurance plans affect the cost of medical care is by acting as “shopper’s clubs” that
are able to negotiate lower prices than are available to individuals without insurance for goods and
services such as prescription drugs. The upstate New York population buys the same drugs at
varying prices due to differences in discount rates are used by the pharmacies. The cost estimates in
this report are adjusted to reflect a reasonable estimate of the discount upstate New Yorkers would
receive compared with the estimated cash price customers without insurance would pay at retail
pharmacies. (The estimated average is consistent with the findings of a national study for the U.S.
Congress’ Government Accountability Office: Federal employees’ health benefits: Effects of using
pharmacy benefit managers on health plans, enrollees, and pharmacies. GAO-03-196).
It should be noted that the upstate New York analysis presented in this report is based on currently
available drugs and observed utilization by upstate patients. With new generic alternatives
expected to become available in the second half of 2006 for several major brand drugs, there will be
opportunities for additional drug cost savings in the near future.
Additional Information on Potential Prescription Drug Savings
https://www.excellusbcbs.com/guests/prescription_drugs/index.shtml#
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