Insurance Companies & Drugs

Why Insurance Companies Are Saying No to Generic Drugs

And yes, it might be hurting your pocket

By Kate Seamons,  Newser Staff

   (Getty Images/PeopleImages)

(NEWSER) – It flies in the face of conventional wisdom: insurance companies that won't pay for a generic medicine, essentially forcing patients to opt for pricey brand-name drugs. And yet that's exactly what's happening, report ProPublica and the New York Times. It's "befuddling," says one 41-year-old who says he has to foot a $90 co-pay for Adderall XR because the generic isn't covered by his plan. How'd we get here? The report pins it on pharmaceutical companies trying to "squeeze the last profits from products that are facing cheaper generic competition," and asserts they're doing it by shaking hands on back-room deals that may be happening more and more often.

Though they've uncovered evidence this is happening with more than a dozen drugs, including Aggrenox (a stroke preventative) and Zetia (for cholesterol), the report dives into Adderall XR and its "continued success ... long after generic competitors arrived on the market." In a move designed to cling on to market share, maker Shire began sweetening the deal for pharmacy benefit managers and insurers. The list price didn't budge, but the insurers and "middlemen" like CVS Caremark were paid rebates. And the report explains why patients might not opt to just pay for the generic themselves: In the case of one Brooklyn mother, it costs an extra $600 a year to pay for her son's Adderall XR versus a generic, but paying for it through insurance is the only way to make it count toward her family's $3,000 health insurance deductible.