Impact of 2 Copay Waivers in a Generic Incentive Program

May/June 2010, Vol 3, No 3 - Industry Trends
Anthony F. Liu, MSCS
Tom Jecklin
Geoffery Lee
James Hogan
Download PDF

Generic copay incentive programs, which incentivize users of brand-name medications to choose lower-cost generic medications, have gained popularity among pharmacy plan sponsors. Strategies such as these result in a reduction of overall pharmacy costs and a change in plan member behavior.

The goals of this study were to evaluate the impact of a generic copay incentive program on State Farm plan members and to compare the effect on the generic dispensing rate (GDR) for 1 versus 2 generic copay waivers provided by mail.

As an incentive to improve GDR and reduce members' costs, State Farm offered 2 generic copay waivers to their members who use brand-name medications in 52 therapeutic classes. An ongoing process identified brand-name users to receive communications by mail, advising them of the benefits of choosing generic medications.

Targeted brand-name users were given a 6-month period in which to change to a recommended generic medication and receive up to 2 generic copay waivers. These waivers for targeted members were proactively installed in the CVS Caremark benefit system to avoid the need for physical coupons, and to make it easier for members to take advantage of the offer.

Targeted brand-name users who converted to a generic medication early in the 6-month period received 2 generic copay waivers. Those who delayed their generic conversion until the end of the 6-month period received 1 generic copay waiver.

The study focused on generic adopters who continued therapy after using the generic copay waiver(s). Continued therapy was defined as a generic adopter having filled at least 1 prescription after the last generic copay waiver was used. Targeted brand-name users continued to receive communications by mail if they did not choose generic medications.

The waiver observation period selected for this study was 18 months after the generic copay incentive program began, plus 4 months of trailing claims, for a total of 22 months. Two measures of GDR were evaluated during the study:

  • Postconversion GDR, which examined the prescription filled immediately after the last generic copay waiver was used, and measured the percentage of prescriptions that were generic
  • Sustained GDR, which examined the last prescription filled within the specified observation period, and measured the percentage of prescriptions that were generic.

Members who received 1 generic copay waiver comprised 45% of all generic adopters; members who received 2 generic copay waivers comprised the remaining 55%. There were 5140 generic adopters during the specified observation period.

Overall, sustained GDR for members who received 2 copay waivers was 88.2% compared with 71.7% for members who received 1 copay waiver, a significant 16.5% difference (P = .05).

Table 1
Impact of 2 Waivers in a Generic Copay Program: Top-4 Therapeutic Classes
Difference in Sustained GDR: 1 versus 2 Generic

Among the leading 4 therapeutic classes (measured according to the number of generic adopters), sustained GDR for members who received 2 copay waivers was higher than for those who received 1 waiver (Table 1),with a 12.3% difference for statins, 18.6% for antihypertensives, and 31.3% for beta-blockers (Figure).

Table 2
Impact of 2 Waivers in a Generic Copay Program: Top-10 Branded Drugs


Among the top-10 targeted brand-name drugs (measured according to the number of generic adopters), the impact of 2 generic copay waivers was consistently greater than the impact of 1 single waiver: sustained GDR for 7 of them was significantly higher with the 2 copay waivers than with the 1 copay waiver (Table 2).

During the study period, generic conversions attributed to the generic copay incentive program led to approximately $1.6 million in net plan sponsor savings and approximately $1.7 million in plan member savings.

Among the top-4 therapeutic classes, and for most of the top-10 targeted brand-name medications, generic adopters who received 2 copay waivers by mail were more likely to continue taking generic medications than those who received 1 copay waiver by mail.

A longer observation period would have been ideal to determine if the program had a sustained impact on member behavior.

It is possible that if the program was made available to members at a retail pharmacy, a greater participation rate would have been seen among members. However, State Farm chose not to incentivize the use of a more costly delivery channel.

Further research is needed to identify the reasons why members who initially converted to a generic medication may have converted back to a brand-name medication after the copay waivers were used.

Related Items
US Healthcare Trends and Contradictions in 2019
F. Randy Vogenberg, PhD
February 2019 Vol 12, No 1 published on February 6, 2019 in Industry Trends
A Shift in Party Majority, a Shift in Priority? What the Pharmaceutical Industry Can Expect
Gary Branning, MBA, Randy Ross, BA, Kathryn Hayes, BA
February 2019 Vol 12, No 1 published on February 6, 2019 in Industry Trends
FDA Commissioner Outlines New Plan to Increase Biosimilars by Balancing Innovation and Competition
Eileen Koutnik-Fotopoulos
November 2018 Vol 11, No 8 published on November 30, 2018 in Industry Trends
New Rivals: Integrating Health Benefits to Provide Comprehensive Patient Care
Gary Branning, MBA, Martha Vater
April 2018 Vol 11, No 2 published on April 13, 2018 in Industry Trends
Healthcare Trends for 2018
F. Randy Vogenberg, PhD, John Santilli, MBA
February 2018 Vol 11, No 1 published on February 16, 2018 in Industry Trends
Last modified: November 9, 2011
  •  Association for Value-Based Cancer Care
  • Oncology Practice Management
  • Value-Based Cancer Care
  • Value-Based Care in Rheumatology
  • Rheumatology Practice Management
  • Urology Practice Management
  • Lynx CME