Consumers' Average Prescription Drug Copay Drops as Generic Drug Use Grows

ST. LOUIS--(BUSINESS WIRE)--Apr 16, 2008 - Last year marked the first time in at least five years that consumers paid less, on average, in their prescription drug copay, according to the 2007 Drug Trend Report released by pharmacy benefit manager Express Scripts. The average copay dropped 25 cents to $13.20 even as the average total cost of a prescription rose from $55.01 to $55.93.

Express Scripts attributed the average copay decrease to greater use of generic drugs, saying in the report that consumers saved an average of $15 per prescription each time they moved from a brand to a generic. The company serves more than 50 million Americans and thousands of employer, managed care, union and government pharmacy benefit plan sponsors.

"We process more than one million prescriptions every day and 67.3% are now for a generic drug versus 42% in 2002. When more generics are used, benefit plan sponsors can control plan costs without shifting these costs to consumers," said Emily Cox, Express Scripts' senior director of research and lead author of the 2007 Drug Trend Report.

In fact, consumers paid a smaller share of the total cost last year as their share decreased from 24.5% to 23.6%. However, plan sponsors still gained because greater use of generics resulted in the smallest recorded year-to-year increase in the total cost of an average prescription - at 1.6% versus 2.2% in 2006, 2.8% in 2005, and 4.8% in 2004 and 2003. Total cost encompasses billed ingredient cost, dispensing fee, sales tax and other costs.

Between 2002 and 2007, generics became a more attractive buy for consumers as the average copays for preferred and non-preferred brand drugs increased more rapidly than the generic copay, which only increased by 86 cents from $6.71 to $7.57. On the other hand, the preferred brand copay increased $4.52 from $14.66 to $19.18 and the non-preferred copay increased $11.28 from $17.16 to $28.44.

"Many consumers currently paying more for a brand drug can easily switch to a less expensive generic drug with a lower copayment without negatively impacting health outcomes. The generic potential in many drug classes ranges from 70% to as high as 95% based on widely accepted clinical guidelines," explained Cox.

"Although the gap between generic and brand copays is wider, not every consumer is taking advantage of the opportunity to save money on generic drugs. Financial incentives are not enough, which is why Express Scripts is applying an advanced understanding of human behavior to enable better health and value at the consumer level," said Cox.

The 2007 Express Scripts Drug Trend Report also examined copayment trends involving high cost specialty drugs, which cost an average $1,550.28 per prescription in 2007. The consumer share remained constant at 2.6% in 2006 and 2007. Because the average cost of a specialty prescription increased 7.8% year over year, the average copayment increased $3.01 from $38.33 to $41.07.

Data in the Express Scripts 2007 Drug Trend Report comes from a rigorous, statistically significant analysis of Express Scripts claims data. In addition to the information on consumer copays, the report includes data on spending trends for non-specialty and specialty drugs, utilization by age and gender, reviews of nine non-specialty and seven specialty therapy classes and trend forecasts through 2011 for non-specialty and specialty drugs.

Express Scripts, Inc. (Nasdaq: ESRX) is one of the largest pharmacy benefit management (PBM) companies in North America, providing PBM services to 55 million patients through facilities in 13 states and Canada. Express Scripts serves thousands of client groups, including managed-care organizations, insurance carriers, third-party administrators, employers and union-sponsored benefit plans. Express Scripts is headquartered in St. Louis, Missouri. A legacy of independence ensures that the company's interests are aligned with those of its plan sponsors and their members. Express Scripts drives to lowest net cost by enabling better health and value ... one consumer at time. More information can be found at http://www.express-scripts.com.

Contact

Express Scripts, Inc.
Media Contact:
Rita Holmes Bobo, 314-996-0952
rholmesbobo@express-scripts.com

Posted: April 2008


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