Insurers Insist Doctors Prescribe Generic Drugs

By Brian Vargo

Published on July 22, 2005

As prices increase for heavily advertised medications insurance companies insist that doctors prescribe generic brands, the biochemical equivalent to name-brand medications, to patients at least 50% of the time to lower healthcare costs.

If physicians do not meet the goals for generic drug sales, health insurance companies will often demand a reason and may refuse to provide these doctors thousands of dollars in incentive payments. In addition, an insurer may take into account the amount of generic drugs a physician prescribes when deciding whether or not they will pay for patients to use that doctor's services.

Some physicians are frustrated by the restrictions for prescribing name brand drugs, and believe insurance companies are becoming too involved.

However, insurance companies claim that their role is beneficial to individual patients and the nation as a whole. Doctors are forced to become more familiar with generic drugs designed to serve the same purpose as their name brand counterparts, while saving patients money. On a larger scale, the United States will save an estimated $10 billion in healthcare costs annually.

Comment on this article →