Medicare Part D to require disclosure of generic options

August 8, 2005

As part of Medicare Part D, prescription drug plans (PDPs) must ensure that pharmacies inform enrollees of the price differential between a brand-name drug and the lowest-priced generic version when a covered drug is involved. The program begins Jan. 1, 2006, and PDPs have been preparing for the transition for months.

As part of Medicare Part D, prescription drug plans (PDPs) must ensure that pharmacies inform enrollees of the price differential between a brand-name drug and the lowest-priced generic version when a covered drug is involved. The program begins Jan. 1, 2006, and PDPs have been preparing for the transition for months.

Generic price benefit According to Todd Brown, MHP, R.Ph., associate clinical specialist and vice chair, department of pharmacy practice, School of Pharmacy, Bouvé College of Health Sciences, Northeastern University, this notification will help patients realize the savings that are associated with a generic medication.

"They will be notified every time they get a brand-name prescription and a generic is available," said Brown. "That is a benefit for patients, and it is a benefit for pharmacies because it puts them in a position to talk to patients about generic drugs. It allows pharmacists to give a specific instance to customers, instead of making a broad statement like 'Generic drugs will save you money,' " he said.

Disclosure preparation Beckie Fenrick, Pharm.D., VP of clinical operations for Innoviant, a pharmacy benefit administrator, is one who is grappling with this issue. She explained that Innoviant is working to ensure that pharmacies will be able to pass along information related to the cost-saving potential of brand versus generics to patients.

"Innoviant will have programmed in the clinic-processing system a message that will go back to the pharmacy when a patient comes in with a brand-name prescription," said Fenrick. "It will identify the generic option as well as the potential cost savings," she explained, adding that Innoviant plans to work closely with pharmacists who will then present the information to customers. The company plans to launch a communication campaign about the pharmacist's role in Medicare Part D.

"Innoviant is excited about the opportunity to offer the lowest-cost alternatives to the marketplace, to the payers as well as to the patient," said Fenrick. "We are excited about the opportunity to pass along additional messages in this arena. We anticipate the positive collaborative relationship we have with the pharmacies to continue by providing them with this information facilitating their ability to communicate well with their patients."

Aetna, another PDP, is preparing for this requirement in two ways. Eric Elliott, president of Aetna Pharmacy Management, explained: "We have added language to our pharmacy agreements to contractually require the pharmacist to inform enrollees of any less-expensive generic versions of the drug prescribed and to communicate the differential, if one exists, between the brand and its lowest-cost generic alternative. In addition, we will be assisting the retail pharmacies by calculating an estimated differential between the brand drug and the therapeutically and bioequivalent generic substitution for the majority of brand drugs where a substitution exists so that they can share this savings information with consumers."

Aetna believes that the impact to the pharmacist will be minimal. "Our computer systems will automatically calculate the differential and return the savings information in a message to the store at the point of sale," Elliott explained. "When the pharmacist submits the claim for the brand-name drug to Aetna, he or she will receive a message showing the possible savings between the brand and generic. If the enrollee wanted to get the generic, the pharmacist would reverse the brand claim and resubmit for the generic."

For long-term care pharmacies housed in nursing homes, where there is no contact between the pharmacy and the patient, Aetna will use a different process. In that case, Aetna will provide the savings message in a printed format on the "Explanation of Benefits" form that goes to the member.