Superstar Drugs Debut as Generics
A dose by any other name works as well -- and costs less.
By Thomas M. Anderson, Associate Editor
From Kiplinger's Personal Finance magazine, January 2007
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Designer labels may excite fashionistas and sports-car fanatics, but many consumers are happy to stock their medicine cabinets with less-expensive generic alternatives to brand-name prescription drugs. Value-conscious shoppers will soon be able to pick from a bumper crop of generics. And they'll get a boost from insurers and employers who offer financial incentives to hop on the cut-rate bandwagon.
Assuming your doctor okays your switch to a generic alternative, you may save up to 80% off the cost of a brand-name drug. For example, a year's supply of the antidepressant Prozac costs $1,863. But the same amount of its generic equivalent, fluoxetine, costs just $433, according to a recent price survey by research firm Wolters Kluwer Health. "You get all the premium quality of a brand-name drug -- you just pay less," says Dr. Bill Thomas, a Sherburne, N.Y., physician who specializes in elder care.
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If drug coverage is included in your health insurance, you probably have a smaller co-payment for generics. Some employer plans even skip the co-pay altogether for generics, as a way of encouraging their members to switch to less-expensive alternatives. If you don't have prescription-drug coverage, buying generics will help you hold the line on out-of-pocket expenses.
Coming soon
What if your prescription medication isn't available in generic form? Wait a bit. Brand-name drugs with U.S. sales of about $30 billion could lose patent protection over the next two years. Five blockbuster drugs -- Flonase, Pravachol, Toprol-XL, Zocor and Zoloft -- went generic in 2006, and eight more pharmaceutical superstars are expected to debut as generics by 2008. As a result, consumers, employers and insurers could save nearly $50 billion by 2010.
Joan Zeleski has already grabbed her share of savings by switching to generics. The 51-year-old nurse used to take Desyrel for insomnia and paid $45 for a three-month supply. By switching to the generic version, she saves $36 on the same amount.
For convenience and the employee discount, Zeleski buys prescriptions from her hospital's pharmacy. Most people don't have that option, but they can still save by shopping around.
Wal-Mart rolled out a headline-making generic-drug program in 27 states late in 2006. Under the program, you can buy a 30-day supply of more than 140 generic drugs for just $4 per drug. The world's largest retailer says it plans to bring the discount program to as many states as possible. Drugs on Wal-Mart's $4 list include 12 of the top 20 most commonly prescribed medications. And you don't need insurance coverage or a discount card to qualify for the savings.
Other retailers also offer competitive pricing. Target says it matches Wal-Mart's generic-drug prices in most locations. Midwestern discount retailer Meijer fills prescriptions for some antibiotics, such as penicillin, free.
Savings tips
Finding the best deal on generics sometimes takes a little detective work. A family paying for five common generic drugs could save more than $2,000 a year on top of the savings over brand-name medications just by looking for the best deals, according to a survey of generic-drug prices by Consumer Reports.
Check prices both in stores and online. Consumer Reports found that big discount stores, such as Wal-Mart and Target, and online pharmacies affiliated with drugstore chains, such as CVS.com, tend to charge the least. Costco warehouse stores and Costco's Web site had the lowest generic prices in the survey. And you don't have to pay Costco's $50 membership fee to fill your prescriptions. (For more on Costco and other warehouse stores, see Great Things from Big Boxes.)