A 2016 study by Health Affairs has found that the prescribing of “me too” brand name drugs instead of the equivalent generic therapeutics is costing Medicare beneficiaries 10.5 times more in copays ($42 vs. $4). These “me too” drugs are brand name drugs that come to market when there already is a generic therapeutic substitute on the market. As the patent for Prilosec was about to expire, Nexium came to market as a similar therapy, but has a slightly different chemical make-up. Manufacturers provide rebates to insurance companies to classify these drugs as “preferred” drugs on plan’s formularies. Preferred brand drugs usually have higher copays than generics do.
The two drugs studied, Nexium and Crestor, have generic therapeutic equivalents (omeprazole and atorvastatin, respectively) that are scientifically proven to be equally as effective as a treatment, thus classifying them as “me too” drugs. In 2013, prescribing omeprazole over Nexium would have saved $870 million dollars. The savings are even higher for prescribing atorvastatin over Crestor, with an estimated $1.208 billion in savings. Nexium and Crestor are significantly more expensive than their generic counterparts, despite each having one million less claims than the generic option.
The increasing burden of prescription drug costs on the Medicare program and its beneficiaries has many physician groups advocating for the prescribing of generic drugs over branded drugs when both drugs are similarly effective. Overall, the consensus is, “Don’t use expensive medications when an equally effective and lower-cost medication is available.”