Generics may dampen pharmacy sales for drug stores, but they sure help patients

WHAT IT MEANS AND WHY IT'S IMPORTANT CVS Caremark made a major push to showcase the tools it uses to curb costs as it revealed a study indicating that more lax generic regulations could save states millions of dollars, not to mention that its annual insights report revealed an increase in generic dispensing rates.

(THE NEWS: CVS Caremark study: Less restrictive generic laws could curb state Medicaid costs. For the full story, click here)

The study looked at the generic substitution of simvastatin for cholesterol brand drug Zocor over six quarters beginning June 23, 2006, when Zocor's patent expired. It examined how quickly Medicaid recipients moved to the generic equivalent medications under three different state statutes -- mandatory versus permissive substitution, with and without prior authorization, and with and without requiring patient approval for substitution. Based on the findings, CVS Caremark estimated that changing generic substitution laws in favor of less-restrictive regulations could save states struggling to pay for increasing healthcare costs through their Medicaid programs more than $100 million over the next several years. That's a significant savings at a time when budgets are strained.

This announcement came as the company unveiled the findings of its annual insights report, which revealed an increase in generic dispensing rates in 2009, as plan member contributions declined.

The reason all of these initiatives are important is because patient nonadherence to essential chronic medications is a barrier to improving public health and a source of rising medical costs. Past studies showed one-quarter of people receiving prescriptions never fill their first prescription, and patients with such chronic diseases as diabetes and coronary artery disease adhere to their ongoing medication regimen about half of the time, according to CVS Caremark data. Nonadherence to essential medications is a frequent cause of preventable hospitalizations and patient illness, with costs to the U.S. healthcare system estimated at about $300 billion annually.