Articles on Pharmacy Benefit Management

Generic Rx Programs Proliferate in Wake of Wal-Mart's Initiative

Reprinted from the Nov. 3, 2006, issue of DRUG BENEFIT NEWS, biweekly news, data and business strategies for health plans, PBMs and pharmaceutical companies.

Following retail behemoth Wal-Mart Stores, Inc.'s $4 generic prescription drug program, several large grocery store chains announced plans last month to slash prices on generic drugs, while a large PBM also unveiled a greatly reduced generic drug discount program for small businesses.

Among recent developments, Wegmans Food Markets, Inc. launched a generic prescription drug program on Oct. 26 that will allow customers to purchase a 90-day supply for $11.99 from a list of nearly 200 maintenance drugs, including those in multiple strengths. The program is available in all 71 Wegmans stores located in New York, Pennsylvania, New Jersey, Virginia and Maryland.

Under the program, for example, the price of levothyroxine 50-mcg, a thyroid hormone used to treat hypothyroidism, will drop from $30.99 to $11.99 for a 90-day supply.

Meijer, Inc., on Oct. 23 launched a program that provides free generic antibiotics in all 176 Meijer pharmacies throughout the Midwest. The program includes at least one antibiotic from each of the major antibiotic classifications, with a focus on prescriptions most often filled for children, the company said in a prepared statement. The program includes 70% of the generic pediatric antibiotic prescriptions filled by Meijer, the company said. Products include amoxicillin, cephalexin, and erythromycin. The program is simple to use, and requires no cards, memberships or special forms to fill out, Meijer said.

PBMs, Plans Lower Generic Prices

Medco Health Solutions, Inc. on Oct. 12 unveiled its Generics First program, which the PBM says is "one of the nation's lowest cost generic prescription drug programs for small to mid-size businesses." The program is designed for businesses with up to about 500 employees.

Generics First, which is offered through insurers that partner with Medco, is up to 50% lower in cost than traditional plans, Medco said in a prepared statement. Members receive up to a 90-day supply of generic drugs for a $10 copayment, and Generics First covers nearly 2,000 generic drugs, the firm said.

Meanwhile, Wal-Mart continues to roll out its $4 generics program ahead of schedule based on customer demand. The company on Oct. 26 said that it would offer the program in 12 additional states: Alabama, Georgia, Iowa, Kansas, Maryland, Michigan, Mississippi, Missouri, New Hampshire, Ohio, South Dakota and Virginia. That move follows Wal-Mart's decision Oct. 19 to expand the program to 14 states.

The program, which began Sept. 21 in Tampa, Fla., was originally slated to launch in as many states as possible outside of Florida in January 2007.

Some health plans also are providing generics to members at virtually no cost. Blue Cross and Blue Shield of Minnesota in July launched a "Free Generics" program that requires no copayments for members in self-insured plans. Most self-insured organizations implementing the Free Generics program will reach a break-even point when their generic utilization rate rise between 5% and 10% — for example from 55% to 60%, the company says. "At that point, the money spent on absorbing the full cost of their covered population's generic drugs will be fully offset by the money not spent on brand-name drugs," the Blues plan says.

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