Socioeconomic Factors

SOCIOECONOMIC FACTORS

Generic Prescribing

Prescribing by generic name offers the pharmacist flexibility in selecting the particular drug product to fill the order and offers the patient a potential savings when there is price competition. For example, the brand name of a popular sedative is Valium, manu-factured by Hoffmann-LaRoche. The generic (public nonpropri-etary) name of the same chemical substance adopted by United States Adopted Names (USAN) and approved by the FDA is diaz-epam. All diazepam drug products in the USA meet the pharma-ceutical standards expressed in the United States Pharmacopeia(USP). However, there are several manufacturers, and prices varygreatly. For drugs in common use, the difference in cost between the trade-named product and generic products varies from less than twofold to more than 100-fold.

In most states and in most hospitals, pharmacists have the option of supplying a generically equivalent drug product even if a proprietary name has been specified in the order. If the prescriber wants a particular brand of drug product dis-pensed, handwritten instructions to “dispense as written” or words of similar meaning are required. Some government-subsidized health care programs and many third-party insur-ance payers require that pharmacists dispense the cheapest generically equivalent product in the inventory (generic sub-stitution). However, the principles of drug product selection by private pharmacists do not permit substituting one thera-peutic agent for another (therapeutic substitution); that is, dispensing trichlormethiazide for hydrochlorothiazide would not be permitted without the prescriber’s permission even though these two diuretics may be considered pharmacody-namically equivalent. Pharmacists within managed care orga-nizations may follow different policies;.

It cannot be assumed that every generic drug product is as satisfactory as the trade-named product, although examples of unsatisfactory generics are rare. Bioavailability—the effective absorption of the drug product—varies between manufacturers and sometimes between different lots of a drug produced by the same manufacturer. In spite of the evidence, many practitioners avoid generic prescribing, thereby increasing medical costs. In the case of a very small number of drugs, which usually have a low therapeutic index, poor solubility, or a high ratio of inert ingredi-ents to active drug content, a specific manufacturer’s product may give more consistent results. In the case of life-threatening dis-eases, the advantages of generic substitution may be outweighed by the clinical urgency so that the prescription should be filled as written.

In an effort to codify bioequivalence information, the FDA publishes Approved Drug Products with Therapeutic Equivalence Evaluations, with monthly supplements, commonly called “theOrange Book.” The book contains listings of multi-source products in one of two categories: Products given a code begin-ning with the letter “A” are considered bioequivalent to a refer-ence standard formulation of the same drug and to all other versions of that product with a similar “A” coding. Products not considered bioequivalent are coded “B.” Of the approximately 8000 products listed, 90% are coded “A.” Additional code let-ters and numerals are appended to the initial “A” or “B” and indicate the approved route of administration and other variables.

Mandatory drug product selection on the basis of price is common practice in the USA because third-party payers (insur-ance companies, health maintenance organizations, etc) enforce money-saving regulations. If outside a managed care organiza-tion, the prescriber can sometimes override these controls by writing “dispense as written” on a prescription that calls for a brand-named product. However, in such cases, the patient may have to pay the difference between the dispensed product and the cheaper one.

Within most managed care organizations, formulary controls have been put in place that force the selection of less expensive medications whenever they are available. In a managed care envi-ronment, the prescriber often selects the drug group rather than a specific agent, and the pharmacist dispenses the formulary drug from that group. For example, if a prescriber in such an organiza-tion decides that a patient needs a thiazide diuretic, the pharma-cist automatically dispenses the single thiazide diuretic carried on the organization’s formulary. As noted below, the choice of drugs for the organization’s formulary may change from time to time, depending on negotiation of prices and rebates with different manufacturers.

Other Cost Factors

The private pharmacy bases its charges on the cost of the drug plus a fee for providing a professional service. Each time a prescription is dispensed, there is a fee. The prescriber con-trols the frequency of filling prescriptions by authorizing refills and specifying the quantity to be dispensed. However, for medications used for chronic illnesses, the quantity covered by insurance may be limited to the amount used in 1 month. Thus, the prescriber can save the patient money by prescribing standard sizes (so that drugs do not have to be repackaged) and, when chronic treatment is involved, by ordering the largest quantity consistent with safety, expense, and third-party plan. Optimal prescribing for cost savings often involves consultation between the prescriber and the pharmacist. Because of continuing increases in the whole-sale prices of drugs in the USA, prescription costs have risen dramatically over the past 3 decades; and from 1999 to 2009, the number of prescriptions purchased has increased 39% while the population grew 9% (see Box: The Cost of Prescriptions).