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Keywords:

  • Generic drug;
  • brand-name drug;
  • generic dispensing rate;
  • difference-in-difference analysis;
  • logistic regression;
  • multiple interventions

Objectives. To evaluate the effectiveness of four alternative interventions (member mailings, advertising campaigns, free generic drug samples to physicians, and physician financial incentives) used by a major health insurer to encourage its members to switch to generic drugs.

Methods. Using claim-level data from Blue Cross Blue Shield of Michigan, we evaluated the success of four interventions implemented during 2000–2003 designed to increase the use of generic drugs among its members. Around 13 million claims involving seven important classes of drugs were used to assess the effectiveness of the interventions. For each intervention a control group was developed that most closely resembled the corresponding intervention group. Logistic regression models with interaction effects between the treatment group (intervention versus control) and the status of the intervention (active versus not active) were used to evaluate if the interventions had an effect on the generic dispensing rate (GDR). Because the mail order pharmacy was considered more aggressive at converting prescriptions to generics, separate generic purchasing models were fitted to retail and mail order claims. In secondary analyses separate models were also fitted to claims involving a new condition and claims refilled for preexisting conditions.

Results. The interventions did not appear to increase the market penetration of generic drugs for either retail or mail order claims, or for claims involving new or preexisting conditions. In addition, we found that the ratio of copayments for brand name to generic drugs had a large positive effect on the GDR.

Conclusions. The interventions did not appear to directly influence the GDR. Financial incentives expressed to consumers through benefit designs have a large influence on their switching to generic drugs and on the less-costly mail-order mode of purchase.