Do HMOs or insurance providers have the right to require the use of generic drugs as substitutes for name-brand drugs in order to save money

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Do HMOs or insurance providers have the right to require the use of generic drugs as substitutes for name-brand drugs in order to save money?

Viewpoint: Yes, HMOs and insurance providers have the right to require the substitution of generic drugs for name-brand drugs, as generic drugs have been scientifically proven as safe and effective.

Viewpoint: No, HMOs and insurance providers do not have the right to require the substitution of generic drugs for name-brand drugs. Even if the active ingredients are the same, differences in the inactive ingredients might have a significant effect on some patients.

According to the Food and Drug Administration (FDA), and many pharmacists, low-cost generic drugs are as safe and effective as name-brand drugs. As part of its Center for Drug Evaluation and Research the FDA established the Office of Generic Drugs. The FDA guidelines for generic drugs require testing to prove that the generic drug is equivalent to the original name-brand product in terms of its therapeutic effects and its bioavailability. In other words, generic drugs must contain the same amounts of the active ingredients that are found in the name-brand product. Moreover, the manufacturer must demonstrate that the generic drug delivers the same amount of the active ingredient into the bloodstream as the name-brand drug.

The trend to generic drugs has markedly accelerated since the 1980s when generics comprised less than 20% of all prescription drugs. The Generic Pharmaceutical Association, a trade group that represents generic drug manufacturers, claims that 44% of all prescriptions filled in the United States today are generic drugs. The Hatch-Waxman Act of 1984 was an important factor in stimulating the growth of the generic drug industry. The act was sponsored by Senator Orrin Hatch (R-UT) and Representative Henry Waxman (D-CA).

The objective of the Hatch-Waxman Drug Price Competition and Patent Term Restoration Act was to allow generic drug manufacturers to market copies of name-brand drugs after their exclusive patents had expired. From 1984 through 1993, the Office of Generic Drugs received over 7,000 applications to manufacture and market generic drugs. About half of the applications were finalized and approved. A series of scandals shook the generic drug industry in 1989, prompting the FDA to reevaluate hundreds of generic drug applications and expand testing procedures.

Concerned with the competition from generic drugs, pharmaceutical companies have been fighting to extend the period of patent protection. Patents for "innovator" or "pioneer" drugs are issued for a 17-year period from the point at which a new drug application is made. Although manufacturers of generic drugs must satisfy FDA guidelines, generic or "copycat" drugs do not have to undergo the same costly array of animal and clinical trials of safety and efficacy that are required for new drug applications. The FDA allows manufacturers of generic drugs to apply for an abbreviated new drug application, in order to demonstrate the bioequivalence of the generic drug.

Faced with ever-increasing drug costs, many health maintenance organizations (HMOs) and insurance providers are attempting to force their clients to substitute generic drugs for higher priced name-brand drugs whenever possible. The savings involved in using generic drugs rather than their name-brand counterparts are substantial. Indeed, the Congressional Budget Office estimates that the use of generic drugs results in savings of 8-10 billion dollars a year. Nevertheless, these savings seem small in comparison to the $121.8 billion spent on prescription drugs in 2000.

Although patients are concerned about affordable drugs, many worry that generic drugs may be of lower quality than name-brand products. Critics of generic drugs argue that even if the active ingredients are the same, differences in the inactive ingredients, such as coatings, colorings, binders, and fillers might have a significant effect on some patients. In the case of a small percentage of drugs, designated narrow therapeutic index (NTI) drugs, very small changes in dosage level appear to have a substantive effect on efficacy. Some tests of narrow-therapeutic-range drugs, however, suggested that the failure rate for generic drugs was similar to that of name-brand drugs.

Critics of generics contend that even though the FDA requires proof of bioequivalence, the testing, which is usually done on a small number of healthy patients, may fail to reveal differences that can occur when the drug is taken by a wide variety of seriously ill patients. Thus, physicians and patients are particularly concerned when HMOs force patients to use the lowest-priced drug available. They argue that despite the importance of containing health care costs, accountants and administrators should not be making decisions about which drugs a patient should be taking. Many physicians object to having HMO administrators interfere with the doctor/patient relationship and overruling decisions made by the prescribing physician. Substituting a generic drug for the drug selected by the physician, therefore, seems to demonstrate more concern for profits than for patients. Patients may also feel that the generic drug must be different from a drug that enjoys a very distinctive, familiar, and even comforting brand name. For example, consumers may feel more secure with a brand name like Valium than a generic equivalent known as diazepam.

Arguments about drug safety and efficacy are not limited to the battle between manufacturers of generic drugs and companies marketing name-brand drugs. Questions arise about whether heavily promoted "innovator" drugs are actually more effective than older prescription drugs, or even over-the-counter medicines. For example, some researchers suggest that ibuprofen and other anti-inflammatory drugs are just as effective at relieving arthritis pain as Celebrex and Vioxx, the newest high-priced prescription arthritis drugs. Moreover, there is growing evidence that Celebrex and Vioxx do not produce fewer side effects than less costly anti-inflammatories. Celebrex (Pharmacia) and Vioxx (Merck) have provided enormous profits since they were approved by the FDA in 1998 and 1999, respectively. Sales of Celebrex were $3.1 billion in 2001; sales of Vioxx reached $2.6 billion.

Critics and medical insurers, however, insist that these very expensive drugs are not significantly better than less expensive alternatives. Indeed, critical reviews of the studies used to promote Celebrex and Vioxx found evidence of "serious irregularities" and "misleading results," especially those dealing with gastrointestinal complications and cardiovascular problems. Thus, critics charge that Celebrex and Vioxx became best sellers, not because they were really safer and more effective than over-the-counter drugs, but because of massive advertising campaigns, especially those that appealed directly to consumers.

Rather than assuming that the newest, most expensive drugs are always the best, patients and doctors might consider adopting a more skeptical attitude and turn to the most costly drugs only if they find that the lower-priced alternatives are unsatisfactory. Of course consumers cannot be certain that the ingredients in high-priced, name-brand products are always superior. For example, in May 2002 Schering-Plough Corporation, manufacturer of the best-selling allergy medications Claritin and Clarinex, was facing allegation that it had been using imported, inexpensive chemical ingredients not approved for use in the United States in its products. Although pharmaceutical companies often buy chemical ingredients made by foreign suppliers, they must obtain FDA approval if those ingredients are used in prescription drugs sold in the United States.


Viewpoint: Yes, HMOs and insurance providers have the right to require the substitution of generic drugs for name-brand drugs, as generic drugs have been scientifically proven as safe and effective.

You can buy them at your local pharmacy or supermarket for a fraction of the cost: substitutes for name-brand drugs called generic drugs that the Food and Drug Administration (FDA) affirms are as effective as their name-brand counterparts.

Forty-four percent of all prescriptions filled in this country today (as measured in total countable units, such as tablets and capsules) are generic drugs, explained Clay O'Dell of the Generic Pharmaceutical Association, a trade group that represents generic drug manufacturers. Eighteen years earlier that figure, a mere 18.6%, jumped to 36.6% in 1998 before it surged to today's high of 44%. The most acknowledged contributing factor to that dramatic rise in sale of generic drugs is the Hatch-Waxman Act of 1984 (also known as the Drug Price Competition and Patent Term Restoration Act of 1984). The act, sponsored by Utah conservative Orrin Hatch in the Senate and California liberal Henry Waxman in the House of Representatives, made it possible for the first time for generic drug makers to manufacture and market copies of name-brand drugs whose patents had expired.

With these increases in generic prescriptions in mind, the Congressional Budget Office recently estimated that consumers save 8-10 billion dollars a year at retail pharmacies by using generic drugs. That saving is seen by many as quite substantial in light of the staggering $121.8 billion spent on prescription drugs in the United States in 2000, a startling increase in spending from the previous year of 17.3%. Increases such as this have been associated with the 11% increase in insurance premiums reported in this country in 2001. Many health maintenance organizations (HMOs) and insurance providers have been, as a result, requiring that generic drugs be substituted whenever possible to save money. Answers to the questions, " Are generic drugs as effective as name-brand drugs?" " Why is it possible to offer consumers generic drugs at costs lower than the costs of name-brand drugs?" and " Who benefits from the savings when a generic drug is substituted for a name-brand drug?" spotlight reasons why HMOs and insurance providers have the right to substitute generic drugs for name-brand drugs in order to save money.

Are Generic Drugs the Same as Name-brand Drugs?

Generic drugs are as safe and effective as name-brand drugs, according to Vincent Earl Pearson, Pharm. D., Clinical Coordinator for Drug Information for the Department of Pharmacy at Johns Hopkins Hospital. Dr. Pearson explained that the FDA regulates all generic drugs using strict guidelines, requiring the same testing as name-brand drugs to ensure that the generic is interchangeable with its name-brand counterpart or that the two drugs are therapeutically equivalent.

Since generic drugs usually sell for less than name-brand drugs, some consumers deduce (as they do when they evaluate generic food and household products) that they are paying less for a lower standard of quality and, therefore, that generic drugs must be inferior to name-brand drugs. That is simply not the case, according to Doug Sporn, Director of FDA's Office of Generic Drugs, who argued that generic drugs are not inferior to name-brand drugs. Even though they are less expensive (sometimes half the price of their name-brand equivalent) than name-brand drugs, generic drugs contain exactly the same active ingredients as name-brand drugs, and they are just as safe and effective. Ronni Sandroff, editor of Consumer Reports on Health concurred with Sporn when he stated that consumers often "get the same for less" when they opt for generic drugs.

The FDA, the agency that ensures that drugs are safe and effective for their intended uses, dictates that generic drugs must contain the same, identical amount of active ingredients as their name-brand counterparts, and in the identical dosage. Furthermore, the generic drug must deliver the same amount of those active ingredients into a patient's bloodstream within the same time frame as the name-brand drug. And, finally, the generic drug must also fall into "acceptable parameters" established by the FDA for bioavailability, which is the extent and rate at which the body absorbs the drug.

So, besides price, generic drugs are essentially the same as name-brand drugs with the only real discrepancy being the inactive ingredients, such as coatings, fillers, binders, colorings, and flavoring. These inactive ingredients, which have been associated with differences in the size, color, and shape of generic and name-brand pills and capsules, are, in general, harmless substances that have little or no effect on the consumer's body. However, in some sensitive consumers, inactive ingredients may cause unusual and sometimes severe adverse reactions. For example, preservatives, such as sodium metabisulfite, have been associated with asthmatic allergic reactions in a number of consumers. As another example, consumers who are allergic to wheat may experience a reaction to drugs that use wheat fiber as a bulking agent (to facilitate quick passage through the gastrointestinal tract), while some other consumers might be allergic to tartrazine, a coloring agent used in certain medications. Two points regarding reaction to inactive ingredients in drugs are worth mentioning. First, in most situations where consumers encounter problems with allergic or adverse reactions, the reactions are treated before they are able to affect the health of the consumer. Second, allergic reactions to inactive ingredients in drugs are just as likely to occur with name-brand drugs as they do with generic drugs.

Besides being associated with allergic or adverse reactions, inactive ingredients in drugs have also been associated with the extent and rate at which the body absorbs active ingredients (i.e., the drug's bioavailability). Some researchers and physicians express concern that a decrease in absorption in certain drugs can make the drugs ineffective or that an increase in absorption can render them dangerous, but most agree that for most people taking most drugs, the slight difference in absorption of active ingredients is insignificant.

Why Is It Possible to Offer Consumers Generic Drugs at Costs Lower Than the Costs of Name-brand Drugs?

The reason consumers are able to purchase generic drugs at costs lower than the costs of name-brand drugs is because the procedure required for FDA approval of generic drugs does not require the costly, lengthy clinical trials to prove safety and effectiveness that FDA approval for name-brand drugs requires.

FDA Approval of Name-brand Drugs.

Since name-brand drugs, also referred to as "innovator" drugs, are the first to appear on the market horizon, their manufacturers must obtain FDA approval via a new drug application (NDA). The NDA contains data and information from time-consuming and expensive animal and clinical trials that demonstrate to the FDA that the manufacturer can produce a drug that is safe and effective for the disease or condition for which the manufacturer proposes to market it. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), the lobby group for name-brand drug companies, the intricacy and time that extensive animal and clinical testing command are the prime reasons research costs often aggregate into hundreds of millions of dollars. Once the NDA is initiated, the manufacturer is issued a patent that lasts 17 years. During that time, no other drug manufacturer is allowed to create and market a generic equivalent of that drug. It is important to point out that since a sizable portion of the 17 years is sometimes spent in the FDA approval process, the name-brand manufacturer has less than 17 years to market the new drug. One case in point is Claritin (one of the first non-drowsy allergy products), whose parent company, Schering-Plough, spent over 10 years in the FDA approval process, leaving the pharmaceutical giant only seven years to market and sell the drug.

FDA Approval of Generic Drugs.

The manufacturers of generic drugs, also known as "copy cat" drugs, are not required to replicate the extensive testing and clinical trials that were required of pioneer or name-brand drug manufacturers, since the generic drug is a copy of the name-brand drug and since the research will have been recently completed by the name-brand manufacturer. Instead, once the name-brand drug's patent expires, the generic drug manufacturer begins the procedure for FDA approval via an abbreviated new drug application (ANDA). The approval process usually takes about two years, in contrast to the approval process for name-brand drugs, which as mentioned earlier, can take up to 10 years. The ANDA contains data and information that show that the generic drug manufacturer can produce what is essentially a copy of the name-brand drug along with information that shows that the copy is bioequivalent to the name-brand drug, meaning that the generic drug must deliver the same amount of active ingredients into the patient's bloodstream in the same amount of time as the name-brand drug.

Who Benefits When Generic Drugs Are Substituted for Name-brand Drugs?

Generic drugs continue to represent one of the greatest values in U.S. health care, and as such are benefiting a number of different individuals and organizations.

Financial Benefits.

The first and most obvious beneficiary of the money saved by substituting generic drugs for name-brand drugs is the patient who has been prescribed a given drug. If the patient is paying for a generic drug out-of-pocket, chances are that the cost would be one-third to two-thirds the cost of the name-brand drug. For the patient who is covered by health care insurance (e.g., HMOs, PPOs), the benefit would likely be lower premiums and lower co-payments. And finally, the benefit for the patient who insists on purchasing the name-brand drug would be a reduced price because of competition from the generic drug.

HMOs and insurance providers would benefit by making more profit on lower premiums. Even though the cost of reimbursement would be lower, the benefits would mount because the lower premiums would attract more patients, resulting in more incoming premiums.

Pharmacies and pharmacy benefit manager (PBM) programs would benefit from a higher margin of sales because the lower prices of generics would spur more sales.

Finally, society as a whole would benefit because substitution of generic drugs for name-brand drugs would threaten the profit margin of the name-brand pharmaceutical companies, motivating them to develop more new and novel drugs that they could patent and market for monopolistic prices.

Health Benefits.

The substitution of generic drugs for name-brand drugs would help to alleviate some of the health care problems initiated by the high cost of prescription drugs. Generic drugs would make affordable to millions of Americans many of the medications their physicians have been prescribing. As a result, there would be less unnecessary suffering, and in some cases, less deaths. Generic drugs would also minimize practices being used to extend prescriptions, such as "self-prescribing," where patients take medicines less frequently than prescribed, or "half-dosages," where patients take half the prescribed dose. Needless to say, these practices are dangerous because they exacerbate existing health problems or create new ones.

Future Issues

Several new issues have arisen in the debate on generic versus name-brand drugs. Pharmaceutical companies have found loopholes in the Hatch-Waxman Act that have allowed them to inappropriately extend their patents. The Greater Access to Affordable Pharmaceuticals Act (GAAP Act) has been designed to combat this. Sponsors of the act, Senators John McCain and Charles Schumer, recently predicted that the act could save consumers up to $71 billion in 10 years.

Another issue involves the narrow therapeutic index (NTI) drugs, which make up less than 5% of all prescription drugs. NTI drugs have been described as drugs in which even very small changes in dosage level can produce serious side effects or decreased efficacy. In spite of the FDA's specific statement in 1998 that generic NTIs are equivalent to name-brand NTIs, and that there are no safety or effectiveness concerns about switching from one to the other, many physicians and pharmacists are unwilling to switch patients from a name-brand to generic NTI or visa versa. The drugs known to have an NTI include Premarin (hormone replacement therapy), Dilatin and Tegretol (anticonvulsants), Theophylline (asthma and lung diseases), Coumadin (blood thinner), Lithium carbonate (antidepressant), and Cyclosporine (antirejection drug for organ transplant patients).


Viewpoint: No, HMOs and insurance providers do not have the right to require the substitution of generic drugs for name-brand drugs. Even if the active ingredients are the same, differences in the inactive ingredients might have a significant effect on some patients.

Measuring Value: The Controversy over Generic Drugs

There aren't very many people in the United States today who are unaffected by the rising cost of health insurance. Managed care companies often play a big role in the equation, claiming that they help to keep costs down by eliminating unnecessary services and grouping together physicians who agree to provide treatment at set prices. In exchange, the physicians or providers, as they are sometimes called, are placed on the insurance company's referral list. A prescription card is often a separate part of the plan and can be offered by the primary insurance provider or an adjunct provider.

With pressure from all sides, insurance companies have been forced to examine their premiums and try to keep costs down. The managed care departments of large companies often negotiate contracts with various insurance companies in an effort to obtain the best possible group rates. This, of course, is in the best interest of the employer, since many of them pay a portion of their employees' insurance premiums as a company benefit. So, it appears that everyone has something to gain by cutting costs. But what is the price to the patient? How does this emphasis on cost cutting affect the quality of health care?

Many HMOs and insurance companies claim that patients still receive what they need, but at a lower cost. However, as we all know, there are good insurance companies and there are bad insurance companies. There are good HMOs and bad HMOs. And the truth is that these companies are businesses; they operate for profit. As such, they apply corporate values to the management of health care and that doesn't always mean that they have the patient's best interest at heart. After all, there's a reason why the word "managed" comes before the word "care."

Many insurance companies are driven by the "bottom line." The leaders of these corporations must answer to their shareholders and many times are driven by their own need to maintain personal wealth. To complicate matters, they also face pressure from various consumer groups who demand lower cost insurance, especially with regard to prescription drugs. So, ultimately a dollar amount is placed on health.

But here's the problem: how do you place a value on human life? What do you think your health is worth? Shouldn't your doctor be the one to choose what drug is best for you, not your insurance provider? What happens if you need to take a drug that is classified as a narrow therapeutic index drug (a drug that requires careful dosing)? Are all generic drugs truly the same as name-brand drugs? These are just a few of the questions people are asking as the controversy over generic drugs continues.

Close Is Not Enough

Those who favor the use of generic drugs claim that they are the same as their name-brand counterpart. They argue that generic drugs cost less because they don't require the same level of marketing and development expenses. Even the Unites States Food and Drug Administration (FDA) has told us that generic drugs are just as good as name-brand drugs. Why then do some people question the substitution of generic drugs for name-brand drugs? Issues of bioequivalency are at the heart of the debate. In an article on generic drugs from the Crohn's & Colitis Foundation of America (CCFA), it is explained that a generic drug may contain the same active ingredients as the original drug, but it may not be the same. So, the FDA requires that manufacturers submit proof of bioequivalency. This means that if two drugs are to be considered bioequivalent, they are supposed to produce the same therapeutic effect and have the same level of safety. However, not everyone is convinced that every generic drug on the market is truly bioequivalent. In fact, all you have to do is analyze the way generic drugs are produced and tested to have some doubts regarding their bioequivalency.

In an article for the American Council on Science and Health, Jean Eric, a physician, explained that unlike name-brand drugs, generic drugs are rarely tested for safety and efficacy on patients. Instead, Eric explains, the innovator drug and its generic counterpart are administered in a highly structured setting to a small number of healthy patients—almost always fasting, young male adults—and blood concentrations of the drug are measured over time after just one dose. Eric goes on to say that if the blood levels for each product are similar (usually within 20% of each other), the FDA will declare the generic product equivalent to the innovator product. There is an obvious problem, however. Under real life circumstances, the drugs will be taken in multiple doses and by patients who fall into a variety of demographic and medical categories. Factors such as age, sex, diet, and physical activity can all affect drug absorption. In addition, generic drugs can contain fillers that are not present in the name-brand drug. These fillers can sometimes affect the drug's absorption into the bloodstream and can cause unexpected side effects. And the HMOs and insurance companies are aware that side effects from generic drugs can occur. Some of them even have policies in place to allow patients to appeal the requirement of having to take a generic drug when one is available. Unfortunately, most companies require that the appeal be made after the adverse reaction has occurred, which may seem logical from a cost-savings point of view, but it's the patient who suffers the consequences. Naturally, patients who can afford name-brand drugs might decide to simply pay the out-of-pocket expenses rather than go through all the red tape, but what about those patients who can't afford it? Does this make them any less deserving of quality health care?

A significant study conducted by Dr. Susan Horn, a senior scientist at the Institute for Clinical Outcomes Research at the University of Utah School of Medicine, was published in the American Journal of Managed Care and raised serious questions regarding generic drug equivalency. The study analyzed over 12,000 patients in six different HMOs. It was found that formulary limitation, which is the practice of forcing physicians to prescribe cheaper generic drugs instead of more expensive name-brand drugs, resulted in many more emergency-room visits and hospitalizations among those patients who received the generic substitutes. The irony was that it cost the HMOs more money in the long run.

The Integrity of the Doctor/Patient Relationship

The integrity of the doctor/patient relationship should be maintained. The HMO should not be able to override decisions made by the examining physician who knows his or her patient and assumes the legal liability for the patient's health. In fact, unreasonable restrictions placed on physicians by some HMOs and insurance companies have caused some physicians to opt out of certain insurance plans, leaving patients stranded or faced with difficult financial choices.

From an ethical point of view, the real decision-making power should be balanced between the patient's wishes and the physician's advice. Many patients are learning the importance of being "informed" and often make decisions in tandem with their physicians. In fact, studies have shown that when a patient feels empowered, healing is facilitated. Insurance companies and HMOs should promote this process with flexible plans. This increasing trend by HMOs and insurance companies to limit a physician's decision-making ability with regard to his or her patient's treatment is a scary one and ultimately ill-advised, especially when you consider that certain drugs require careful dosing and must be monitored closely. These drugs are usually referred to as "narrow therapeutic index" drugs. Blood thinners and anticonvulsants fall into this category. For patients who need to take these types of drugs, a generic drug may not be the best choice. In fact, in an article for the Center for Proper Medication Use, David V. Mihalic cautions that it is not advisable to switch between name-brand and generic drugs in this category. He points out that generic drugs are rated with a two-letter code and that although AA-rated generic drugs have essentially the same absorption rate as name-brand drugs, most generic drugs are rated AB. For a drug to be rated AB, it means that any bioequivalency problems relating to absorption have been resolved to the satisfaction of the FDA. However, B-rated generics do not have the same bioequivalency as their name-brand counterparts. Especially interesting is the fact that there is usually only one co-payment listed on a patient's prescription card with regard to generic purchases; there aren't several co-payments to reflect the two-letter coding system associated with generic drugs. Some might say it's easier to just have one co-payment for all generic purchases and that so much money is saved on the use of generic drugs that there is no need to have different co-payments. However, a more skeptical person might suggest that only one co-payment is used so that the differences between various generic drugs are obscured.

The Politics of It All

Maybe a little skepticism is a good thing. After all, the patient often gets lost in a political tug of war that makes the truth sometimes hard to find. One needs only to read the March 22, 2000, letter addressed to the Department of Health and Human Services from Sidney M. Wolfe, M.D., director of the Public Citizen's Health Research Group, to see how pressure from powerful sources can possibly affect FDA drug approval. In his letter, Dr. Wolfe asked that the FDA be held to the Code of Ethics for Government and under no circumstances should the agency be allowed to succumb to outside pressures. When FDA medical officers Robert Misbin and Leo Lutwak opposed the approval of Rezulin, Dr. Wolfe states that an internal affairs committee harassed them and ultimately their concerns about the drug's safety went unheeded. The result was disastrous. Although the drug was approved in January 1997, it was withdrawn from the market in March 2000, because it was linked to liver toxi-city and the FDA had to admit that their medical officers had been right all along. So why did Rezulin, which later had a generic counterpart, get FDA approval, even when the FDA's own medical officers expressed serious reservations? The answer is simple: politics. The FDA does a lot of good work, but the agency isn't infallible.

Add to the equation the pressure for new drugs and instant cures and it isn't hard to see why some drugs may be approved, even if they shouldn't be. If a name-brand drug can be approved in the face of strong opposition from FDA scientists and physicians, so can a generic drug. In fact, the chances might even be greater, because a generic is not a "new" drug; it is often viewed merely as a lower-priced copy of the original. Of course, generic drugs aren't approved by the FDA automatically, but the process for getting them approved is often less stringent than obtaining approval for name-brand drugs. That is why only the attending physician—not the HMO or the insurance company—should have the right to decide which drug a patient should receive and whether a generic substitute is acceptable. After all, it is the physician who is responsible for the well-being and health of the patient, not an administrator at an insurance company.

Furthermore, patients, along with their employers, pay for medical benefits. A government employee in the state of Texas, for example, might pay as much as $280 a month to cover a spouse and three children. This doesn't include the equal contribution that is made by the employer. For over $400 a month (which doesn't include all the $20 co-payments here and there for prescriptions and doctor's visits), doesn't the patient have a right to obtain good medical care? It isn't as though patients expect charity from the HMOs and the insurance companies. People pay premiums and in exchange they expect quality health care. For most people, that means they should be able to choose their physician and get the best treatment for their specific condition.


When it comes to "rights," a patient's well-being should be more important than the financial interests of an HMO or insurance company. However, many HMOs and insurance companies continue to regard the "bottom line" as their number one priority. This shortsightedness blinds them to the long-term results of their decision-making, especially when it comes to forcing generic drugs on patients. Health care is not based on short-term solutions. Cutting costs in the area of patient care will only lead to more spending tomorrow.


Further Reading

Beers, Donald O. Generic and Innovator Drugs: A Guide to FDA Approval Requirements. New York: Aspen Publishers, 1999.

Cook, Anna. How Increased Competition from Generic Drugs Has Affected Prices & Returns in the Pharmaceutical Industry. Collingdale, PA: DIANE Publishing Co., 1998.

Eric, Jean. "Are Generic Drugs Appropriate Substitutes for Name-brand Drug?—No." American Council on Science and Health [cited July 16, 2002]. <>.

Jackson, Andre J., ed. Generics and Bioequivalence. Boca Raton, FL: CRC Press, 1994.

"Letter to the Department of Health and Human Services Urging That They Implement and Enforce the Code of Ethics for Government (HRG Publication #1516)." The Health Research Group. The Public Citizen Web site [cited July 16, 2002]. <>.

Lieberman, M. Laurence. The Essential Guide to Generic Drugs. New York: HarperCollins, 1986.

"Medications: Generic Drugs." The Crohn's and Colitis Foundation of America Web site [cited July 16, 2002]. <>.

Mihalic, David V. "Generic Versus Name-brand Prescription Drugs." The Center for Proper Medication Use Web site [cited July 16, 2002]. <>.

Mohler M. and S. Nolan. "What Every Physician Should Know About Generic Drugs: Are Generic Drugs Second-class Medicine or Prudent Prescribing?" Family Practice Management 9, no. 3 (2002).

Sandruff R. "Can You Trust Generics?" Consumer Reports on Health 13, no. 7 (2001): 2.

Sporn Doug. "FDA Ensures Equivalence of Generic Drugs." Food and Drug Administration website [cited June 15, 2002]. <>



Shortened version of an NDA that may be submitted to the FDA for approval of a new formulation of an existing drug or a generic equivalent of an existing drug.


The extent and rate at which the body absorbs a drug.


Term used to describe a drug that acts in the body in the same manner and to the same degree as the drug to which it is being compared. For example, a generic drug must be bioequivalent to the original brand-name drug of which it is a copy.


An "innovator drug" that is the first of its kind to appear on the market. Its manufacturer, usually a research-based pharmaceutical company, must demonstrate to the FDA that it can produce a drug that is safe and effective for the disease or condition for which it is intended.


A "copycat" version of a brand-name drug that the FDA has declared to have the identical amounts of active ingredients as its brand-name counterpart.


Also known as the Drug Price Competition and Patent Term Restoration Act of 1984, this act made it possible for the first time for generic drug makers to manufacture and market copies of name-brand drugs whose patents had expired.


Patents issued for a 17-year period from the point at which a new drug application is made.


A class of drugs in which very small changes in dosage level appear to have a substantive effect on efficacy.


Document submitted by a research-based pharmaceutical company to the FDA as a request for approval to market a given drug. The NDA is submitted after the company has significant proof of the safety and efficacy of the drug.


Although pharmaceutical companies and the FDA can be aware of potential health risks associated with the use of prescription drugs, that in no way means they will acknowledge these risks until it is too late. The FDA approved the short-term use of Pondimin (fenfluramine) and Redux (dexfenfluramine) for treating obesity, despite being aware that the drugs could cause primary pulmonary hypertension (PPH), a potentially fatal heart disease. To make matters worse, some people allege that the manufacturers even went so far as to downplay the drugs' link to PPH, ignoring the potential health risks. No approval to use the drugs together had ever been given by the FDA. Nor was approval given for these drugs to be used in conjunction with Phentermine, the most commonly prescribed appetite suppressant. Because of the effectiveness these combinations, or "cocktails," provided in weight management, Fen-phen (Pondimin and Phenter-mine) and Dexfen-phen (Redux and Phentermine) became extremely popular and widely prescribed. By the summer of 1997, the Mayo Clinic began reporting numerous cases of heart valve troubles and PPH directly associated with the use of Pondimin, Redux, and their cocktails. Ironically, obese patients hoping to lose weight and avoid the risk of heart disease now found themselves with a serious threat to their health. As thousands of heart disease cases poured in, the FDA pulled Pondimin and Redux from the market in September of 1997. Class action lawsuits continue to this day, and many patients remain under close medical supervision for their life-threatening heart damage.

Lee A. Paradise

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Do HMOs or insurance providers have the right to require the use of generic drugs as substitutes for name-brand drugs in order to save money

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