Managed care companies, traditional indemnity insurers, and pharmacy benefit managers are working to control drug costs by
promoting the use of generics through consumer campaigns. They're using strategies-borrowed from pharma companies' branded
advertising, public relations, and sales initiatives-that target audiences now facing higher premiums and multi-tiered co-pays.
From a broader perspective, information from those cam-paigns may fuel patient and payer groups' arguments against DTC advertising.
Blue Cross Blue Shield of Michigan sponsored a pharmacy competition to educate and promote the use of "generics - the unadvertised
brand." The winner, to be announced this month, will be featured in a spring advertising campaign.
A study by the National Institute for Health Care Management found that, in 2001, the 40 most heavily advertised brands accounted
for almost half of the increase in consumer spending on pharmaceuticals. Significant news coverage in the consumer and trade
press implies a direct relationship between those two factors. Critics point to the tripling of pharma companies' marketing
spend since 1997 and link that to higher prices.
"The huge expenditures that you see in brand marketing are possible because the drugs sell at huge costs to the consumer.
It's a vicious cycle," says Clay O'Dell, spokesperson for the Generic Pharmaceutical Association.
Merck-Medco has already broken that "cycle" through Generics First, the company's sampling program. Participating physicians
receive bimonthly mailings containing educational material and generic drug sample forms and meet with pharmacists who discuss
the benefits of generics. In the first six months, those doctors increased their generics prescribing rate by 22 percent and
generated $3.5 million in savings for health plan sponsors and patients.
"State Medicaid programs that put their foot down by excluding branded drugs open themselves up to charges that they are too
harsh," says O'Dell. "But when a private insurer gives information about generics and offers samples, it's good public relations.
It's leading the horse to water, and hopefully, making him drink."
Blue Cross Blue Shield of Michigan is also rolling out several consumer initiatives. Its latest is a pilot program that waives
the co-pay when the health plan member switches from certain brand-name drugs to their generic equivalents. The insurer projects
total savings of $1.5 million for patients in the pilot.
Other payers are likely to mount similar campaigns to control their own drug costs. How they affect brand sales remains to
be seen. But with FDA expected to deliver new guidelines for DTC within the year, pharma marketers should be prepared for
their impact on message development and delivery.