Health Insurers Push Physicians To Prescribe Generic Drugs

Ruzanna Harutyunyan's picture
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The AP/Houston Chronicle on Wednesday examined how health insurers "are allowed to push doctors toward cheaper prescriptions, frequently by offering the physician a form of bonus, a cut from the savings that insurance companies get when doctors prescribe generic drugs." The practice represents "the flip side of a concern about corporate influence in the doctor's office that's been criticized -- often stridently -- when the pharmaceutical industry entices doctors to prescribe brand-name drugs."

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Last year, the American Medical Association classified incentives as kickbacks and warned that physicians who accept rewards for prescribing generic drugs could face criminal and civil liability under federal statutes. Some states are considering legislation that would increase scrutiny of insurers' incentives. A bill pending in Massachusetts would regulate incentive plans between insurers and providers, while a Michigan proposal would ban financial incentives but allow insurers to compensate physicians for time spent evaluating whether a switch to generics would be best for a patient. New York state Sen. Jeffrey Klein (D) introduced legislation that would prevent insurers from offering incentives, and a grandfather clause would require HMOs to continue providing brand-name drugs to patients who benefit from them.

According to the AP/Chronicle, "Insurers say they encourage generics because it keeps consumer costs down when health care expenses are spiking." In addition, insurers say that prescribing generics could help people maintain their drug regimens because some patients do not consistently take costly brand-name drugs to save money. Robert Zirkelbach, a spokesperson for America's Health Insurance Plans, said, "Health plans are not mandating to physicians what to prescribe to patients," adding, "They are providing incentives to encourage greater use of generic drugs" (Bauman, AP/Houston Chronicle, 10/29).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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