Educating Your Employees About How Generic Medications Can Save Them Money

Posted August 01, 2022 by Steve Chrzanowski, Director, Group Retention & Sales Support

When you go to the grocery store you probably notice the generic brand peanut butter is cheaper than the “name brand.” While they contain the same ingredients, the name brand company has spent a lot of dollars marketing its product to give its brand visibility and an edge over its competitors. For many people, the 50 cents to $1 savings may not be enough to entice them to give up their favorite peanut butter, but for things like prescription drugs, the difference in cost between brand name and generics can be significant.

With prescription drug costs rising, companies are looking for ways to better control their health insurance costs. One way they are doing this is by encouraging employees to choose generic medications which cost up to 85 times less than many name brands. One of the key reasons generic drugs cost less is because companies don’t have to repeat research and clinical studies that were required of the brand-name medicines to demonstrate safety and effectiveness. Also, when multiple generic drugs are approved for the same single product, it creates competition that results in lower prices.

Generic drugs not only contain the same active ingredients as their brand counterparts but they also must be approved by the U.S. Food and Drug Administration (FDA) for their safety, purity and effectiveness before coming to market. Generic medications work in the same way and provide the same clinical benefits, side effects and risks as their brand-name equivalents.

According to the FDA, generic medications save the U.S. healthcare system $3 billion every week, and more than $150 billion annually. Those numbers alone should be an incentive to encourage your employees to choose generic medications over name brands; however, for people who have been on the same medications for many years, it can be a hard sell to get them to switch. Drugs relatively new to the market are protected by patents and may not be available in generic form until the patent expires (sometimes up to 20 years).

Below we help you strategize some key messaging to share with employees about the many benefits of generic drugs:

• Better compliance with doctor’s orders. For those with chronic conditions who must be on essential medications for a long period of time, costs can become a deterrent to consistent usage. Lower cost generic drugs are a better alternative than not filling prescriptions or skipping months due to medications being out of budget.
• Affordability. If you want to encourage employees to use generic medications, make sure the copays and costs of brand name vs generic drugs are spelled out in your benefits plan. When employees can see in black and white the price differences, they are more likely to select the less expensive option, creating savings for both employer and employee.
• Availability. With more than 12,000 generic drugs on the market, most popular brand name drugs have a high-quality generic equivalent. For example, the thyroid hormone replacement drug Synthroid, used for the treatment of hypothyroidism, can be swapped with Levothyroxine. Nexium, a brand name drug for gastroesophageal reflux, has a generic equivalent known as Esomeprazole. If you aren’t sure if a drug you are currently taking has a generic substitution, ask your pharmacist.
• Convenience. Companies should consider partnering with a mail order pharmacy to offer easy, low-cost access to generic drugs. Oftentimes they can be ordered in a 90-day supply making accessibility more convenient for patients.

If your employees have questions or concerns about switching to a generic medication, encourage them to talk to their physician or pharmacist.