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Blue Cross extends 'no-pay co-pay' plan

Members who order generics for the remainder of this year won't be charged for them, the company will announce today.

To steer more of its members to cheaper generic drugs, Independence Blue Cross is extending its "no-pay co-pay" program for the rest of 2007.

The program, initially scheduled for just the first quarter of this year, allows 1.2 million of the health insurer's 3.4 million subscribers to get generic drugs for free.

Other insurance companies have used lower co-payments or waived co-pays temporarily to induce members to try generics, but Blue Cross' effort is unusually extensive.

The company will announce the extension today.

"It's been highly successful, so why not keep going?" said Paul Urick, who is vice president of pharmacy services for Blue Cross. The number of prescriptions filled with generics rose 5 percent in January and February, the company said.

Blue Cross spends $1.5 billion a year - 22 percent of total expenses - on prescription drugs. Generics often cost $70 to $80 less than their name-brand equivalents, Urick said. At the end of 2006, about 54 percent of prescriptions for Blue Cross subscribers were filled with generics.

Urick said waiving co-pays was a way of encouraging people to talk about alternative medications with their doctors, remove financial barriers for patients who need medications for chronic conditions, and counteract ubiquitous advertising for brand-name drugs. Not all drugs are available in generic versions, but there are often similar generic alternatives.

Saving money was not the insurance company's primary objective, Urick said, and it has no specific goal for use of generics.

"Generic drugs are much less expensive, and, if they meet the clinical needs, then everybody wins," he added.

Next year, Blue Cross will begin integrating the zero-dollar co-pays into some of its plans, he said.

Insurers routinely give subscribers financial incentives to use generics. On average, they charged subscribers $11 to fill prescriptions for generic drugs in 2006, according to the Kaiser Family Foundation. Insurers required co-payments of $24 for brand-name drugs on their preferred lists and $38 for "nonpreferred" medications.

Urick said Blue Cross members typically paid $5 to $10 for generic and $20 for brand-name drugs, although co-payments could rise to $40.

At Cigna HealthCare, where about 60 percent of prescriptions are filled with generics, officials have tried a different tack. About two years ago, the company started offering flat fees of $5 to $10 for generics, coupled with "coinsurance" for brand-name drugs, said Thom Stambaugh, chief of pharmacy for Cigna pharmacy management. A subscriber pays 20 percent to 50 percent of a branded drug's price instead of a flat co-pay.

The idea was to make consumers more aware of the price difference. Brand-name drugs cost about five times as much as generics, he said. And, while the prices of specific generics tend to go down over time, the prices of brand-name drugs have been rising 5 percent to 7 percent a year.

The coinsurance approach has increased Cigna subscribers' use of generics 2 percent to 5 percent, he said.

The company also mails information about generic alternatives to subscribers who have chosen brand-name drugs, and sometimes sends coupons that make their first bottle of a new generic drug free.

Aetna Inc. has waived co-pays for short periods of time for generic drugs in specific categories, such as heartburn or antidepressant medications, spokesman Jon Sandberg said. It also has helped make free samples of generics available to patients in some doctors' practices. Fifty-nine percent of its subscribers' prescriptions are filled with generics.

Blue Cross' extended program applies to prescriptions filled at a pharmacy or by mail. It does not apply to people who get their insurance through federal programs. Those not eligible include members of Medicare Part D drug plans, Personal Choice HSA-qualified plans, and Keystone Health Plan East HMO members who belong to the Federal Employee Health Benefits Program.