Generic Rx Drug Plans Gain Popularity

Martin Shkreli – Poster Child For High Costs Drugs

By Bill Rusteberg

Five years ago a small South Texas rural county, facing budget busting prescription drug costs for their employees, decided to take action. High cost prescription drugs were bankrupting their health plan.

County Commissioners eliminated coverage for all brand name and specialty drugs and established a Generic Only Drug Plan. In partnership with local pharmacists and the medical provider community, members were prescribed generic drugs when appropriate. This community effort pulled all the stakeholders together as a team to provide the most cost effective health care available to county employees.

“Nine out of 10 prescriptions filled in the U.S. are for generic drugs. On average, the cost of generics is 80% to 85% less than brand-name. Yet, due to their higher price, brand-name drugs account for nearly 75% of the total cost of prescriptions.” SOURCE: Generic vs. Brand-Name Drugs: Is There a Difference? | University Hospitals (

When appropriate physician prescribed brand name and specialty drugs are sourced through pharmacy manufacturer assistance programs or through available foundational monies.

A plan duplicating this strategy can expect to drop prescription drug by 80% and more. A capitated generic drug plan rate of <$7 pepm is reflective of the savings to be realized.

What are generic drugs?

A generic drug is a medication created to be the same as an already marketed brand-name drug in dosage form, safety, strength, route of administration, quality, performance characteristics, and intended use. These similarities help to demonstrate bioequivalence, which means that a generic medicine works in the same way and provides the same clinical benefit as the brand-name medicine. In other words, you can take a generic medicine as an equal substitute for its brand-name counterpart.

Is a generic of my brand-name medicine available? (SOURCE: Generic Drugs: Questions & Answers | FDA)

In addition to asking your local pharmacist for assistance, there are three ways to find out if there is a generic of your brand-name medicine available:

  • Use Drugs@FDA, a catalog of FDA-approved drug products, including their drug labeling.
    • First, search by brand name.
    • Second, select the brand name product and note which products are listed under the section labeled “Therapeutic Equivalents for …”
    • Products that include an ANDA (not NDA) number next to the name are generic products.
  • Use the online version of the Orange Book.
    • First, search by proprietary or brand name. Note the active ingredient name.
    • Second, search again by the active ingredient name.
    • Scroll right to find the dosage form (for example: tablet) and strength.
    • Next, scroll right to the TE Code column. If the TE column contains a code beginning with “A,” FDA has approved generic equivalents.
    • Finally, look at the column “Appl No.” If the letter “A” appears before the number, that product is an FDA-approved generic for the brand-name drug.  
    • For very recent approvals, consult First Generic Drug Approvals.