Medicaid’s Use of Generic Drugs

Everyone is looking for ways to save money in health care.  The state Medicaid programs are really scrambling, as the huge subsidies they are receiving from the federal government will soon expire and there will be a large number of additional eligible persons.  Most were already under cost pressure before the recession and the “reform” law.  Health Affairs carries an article on use of generic drugs which identifies an opportunity to create significant savings.   (Health Affairs Article)

The researchers looked at the interaction between Zocor, a statin, going generic and various state laws.  Some states have mandatory generic substitution and some permissive and some require patient consent to generic substitution and others don’t.  The authors compared the uptake of generics in states with these differing regulatory schemes.  They found that mandatory versus permissive substitution did not a significant effect, but the presence of a patient consent requirement reduced generic use by at least 25%, costing states tens of millions of dollars.  With some very large patent expirations looming next year, eliminating patient consent is estimated to save $100 million in 2011 alone.

Poor and poorly educated patients tend to be most suspicious and least likely to have a positive view of generics, probably feeling they are getting second-class health care.  It would seem, however, that when public tax dollars are being used to provide someone’s health care, in return for getting basically free care, that person should be required to accept whatever is needed to minimize the costs.  Medicaid benefits are actually much richer than the private coverage most people have.  Medicaid beneficiaries should be required to use generics whenever available and to accept any other reasonable cost control measures.  The federal and state deficit problems are going to make any other course unacceptable.