How Healthcare Insurers Save on Drugs

To control rising healthcare costs, many insurers have moved to limit pharmaceutical expenditures. And without further details, insurance usually does not cover uses of prescription drugs not approved by FDA. The percentage of Americans with health insurance has risen steadily over the past decade to 86 percent today, cost is still a big focus for healthcare insurers.

Off-label 
During covered hospital admissions, there are about 57 prescription drugs administered at the hospital that insurers will generally pay for. They are especially unwilling to provide coverage for off-label drugs unless those that have been documented as effective in one of three major medical compendia or in multiple published studies. The so called off-label use of prescription drugs is common in many branches of medicine, especially in the treatment of cancer. Nowadays, more prescriptions are written by outpatient services than inpatient facilities such as hospitals.

Generic drugs
Private insurers usually cover all drugs approved by the FDA. Many private insurers have created incentives for physicians and consumers to substitute generic drugs for branded drugs. They offered lower copayments for generic drugs than for branded drugs. 

Full coverage is most common in HMOs. They could rely on treatment with generic drugs by coordinating directly with physicians. Some HMOs require that their pharmacies automatically substitute generic drugs (U.S. Department of Commerce, 1994. Op. cit.; Moore, 1996. Op. cit. 62 3-69) for branded drugs unless the physician explicitly instructs otherwise. 

Copay

Still, very few health insurance plans cover 100 percent of prescription drug costs. Most plans impose some amounts of copayments to limit prescription drug use, generally in the range of $5 or less. 

Direct mail-order
Another way for insurers to reduce drug costs is through volume discounts and direct mail-order for drugs that patients need refilled on a regular basis. This has become a common practice among insurers. The U.S. Department of Commerce cites reports from economic research firms and industry analysts suggesting that the formation of large buying groups under managed care programs has moderated prescription drug prices. Medicaid, the nation’s major public health insurer, has created a list of 62 incentives just to keep drug costs low.

Depression, a Boat Onboard by Many

Each year about 7 out of a hundred U.S adults experience major depressive disorder, each hop on the depression boat on his own.

Depression tend to occur with other serious medical illnesses such as heart disease, stroke, cancer, HIV/AIDS, diabetes, and Parkinson's disease. Some illnesses may come on before depression, cause it, or be a consequence of it. But depression and other illnesses interact differently in different people. In any case, co-occurring illnesses need to be diagnosed and treated.

Women are 70 % more likely than men to experience depression during their lifetime. Depression, even the most severe cases, can be effectively treated. The earlier that treatment can begin, the more effective it is.

The worst thing is that people who have depression along with another medical illness tend to have more severe symptoms for both illnesses. They have more difficulty adapting to their medical condition, and more medical costs than those who do not have co-existing depression. These cases just show how important it is to treat depression. Treating the depression can also help improve the outcome of treating the co-occurring illness.

Source statistics: NIH

Talking About the Unintentional Effects

Let's take a peek at the FDA's warning on antidepressants.

Despite prescribe-ability of SSRIs and other antidepressants, studies have shown that their unintentional effects on some people, especially adolescents and young adults could be detrimental. 

In 2004, the Food and Drug Administration (FDA) did conduct a review of clinical trials of antidepressants that involved nearly 4,400 children and adolescents. 

It revealed that 4% of those taking antidepressants thought about or attempted suicide (compared to 2 percent of those receiving placebos). 

Given that all of these kids had diagnosed a mental illness, antidepressants did double up on suicidal thinking and behaviors.

This had prompted the FDA to adopt a "black box" warning label on all antidepressant medications. It is the most serious type of warning on prescription drug labeling.

That was their effort to alert the public about the potential increased risk of suicidal thinking or attempts in children and adolescents taking antidepressants. The FDA later suggested that young adults up through age 24 may be affected as well. 

They emphasizes that all patients taking antidepressants should be closely monitored, especially during the initial weeks of treatment. How will healthcare providers accommodate this? Will they have time for it? 

Side effects may worsen depression. 

They include suicidal thinking or behavior, or any unusual changes in behavior such as sleeplessness, agitation, or withdrawal from normal social situations. 

To be safe, it takes families and caregivers together to pay close attention and to monitor and report any changes on behalf of the person being cared for.

A review of children and adolescents with major depression and anxiety disorders conducted between 1988 and 2006 showed that they did benefit from taking meds. This may be due to the severe nature of their mental illness. 

If your child is showing a mental illness tendency, does it worth your time to find out and confirm more before you get an antidepressant? I find it to be an uphill battle to talk to doctors sometimes. But I won't give up.

The latest information from the FDA can be found on their website.

Business Reality Faced by Drug Developers

Studies show that branded drugs lose market share rapidly following patent expiration.

For those who can't afford brand name drug it would be unfortunate if there is no substitute. Whether or not the brand name drug is the orginal formula and you will have to pay the higher price if you must have it.

Brand name drugs producers have to charge up due to the high costs to invent a new formula. That's why people have attacked companies for producing like-kind drugs and marketing them as brand names. But that's an argument for another post.

They have to charge the highest price they can because brand-name drug market shares will be slashed by 60 percent within 5 years following patent expiration. Within 6 years of patent expiration, brand-name drugs command only 20 percent of the market. In its study of the industry, OTA made various market analyses running on an assumption that within 10 years brand-name drugs will leave the market altogether. Brand-name drug manufacturers could not compete with the major generic manufacturers. 

Due to how fast they lose market share though, many major pharmaceutical firms that previously specialized in new drug development and marketing are now establishing divisions or subsidiaries that manufacture and market generic versions of their own branded products—or they are purchasing or affiliating with previously independent generics firms.

The trend toward generics manufacturing by major pharmaceutical firms may threaten the survival of some generics firms, especially the smaller ones, which in turn move them closer to monopoly status. Domination by major pharmaceutical manufacturers could increase their market power, permitting them to set higher prices for their generics. That would again make generics unaffordable, just like their brand name versions.

Thanks to current pricing standards, there is still pressure to keep prices down. Major pharmaceutical firms can't increase the price of their generic products very substantially.

Generics, new profit protection for drugs developers.

When giant firms set out to sell generic versions of their own branded products, they sure have a competitive edge over smaller independent generics makers.

Bigger is better in this case. Not only big pharmaceutical companies can easily save time and money in their production processes, the product is unquestionable when reproducing its own formulations.

You don't have to be convinced that innovative firms have their finances established. Production money is readily available than small independent firms to spend on developing and producing drugs, and then more drugs.

Major firms, or the original brand-name producers already have study data all communicated through, contracted bulk chemical sources, and manufacturing processes in place. They don't have to go to extremes to prove to the FDA that they can produce the drugs again.  They can quickly submit ANDAs and bring their generics version to the market. 

Talk about saving money and time, what they do to launch the generics is much less expensive and more quickly than what any small independent firms have to go through. What this means to the consumer like you is that, you in turn will save too, giving that the price of generics is under control.

But this is not all why big pharmas win over the generics market. The professionals too may be on their side. Pharmacists may be more likely to buy generic formulations from their original brand-name manufacturers. Their take is that, these generic versions will most likely be identical to the brand-name products.

Regardless how other firms claim to produce the brand name equivalents, drug development is a layered process. From reagents preparation to equipment capacity, and quality and assurance control, anything could go wrong down the line. Besides all the other factors, there is definitely a learning curb when another company comes in to try and reproduce someone else's pill.

You and MedWatch

MedWatch is a new web based reporting program designed by the FDA, the U.S. Food and Drug Administration. 

In this information era, it is the agency's crowdsourced effort to fulfill its mission, protecting and promoting health.

Adverse reactions or quality problems experienced with the use of any product may be reported to the FDA's MedWatch Adverse Event Reporting program.

Follow this link MedWatch form to report adverse events that you observe in drugs and medicines that you and your family use, whether it is a prescription or over-the-counter product.

You can take note and report serious drug side effects from the comfort of your home, not having to wait till the next appointment with a doctor to do so.

Other concerns such as product use errors, product quality problems, and therapeutic failures could also be reported there at the site.

What's more? The FDA is also gathering up adverse information about dietary supplements, infant formulas, cosmetics and foods/beverages sold on the market. 

The information you provide will directly help FDA's effort to monitor and regulate these products. It is by far the best way.

Selective Serotonin Reuptake Inhibitors (SSRIs)

This class of drugs is used to treat depression, anxiety, and other mood disorders. 

Marketed under various brand and generic drug names

Generic name	Found in Brand name(s)
Citalopram	Celexa
Escitalopram	Lexapro
Fluoxetine	Prozac, Sarafem, Symbyax
Fluvoxamine	Luvox, Luvox CR
Paroxetine	Paxil, Paxil CR, Pexeva
Sertraline	Zoloft
Vilazodone	Viibryd

Adverse reactions or quality problems experienced with the use of this product may be reported to the FDA's MedWatch Adverse Event Reporting program.

You can use the MedWatch form to report adverse events that you observe in drugs and medicines that you and your family use, whether it is a prescription or over-the-counter product.

You can take note and report serious drug side effects from the comfort of your home, not having to wait till next appointment with a doctor to do so.

Other concerns such as product use errors, product quality problems, and therapeutic failures could also be reported there at the site.

What's more, the FDA is also gathering up adverse information about dietary supplements, infant formulas, cosmetics and foods/beverages sold on the market. 

The information you provide would directly help FDA's effort to monitor and regulate these products.

More information from FDA