June 22, 2008

Understanding Health Insurance Rx Drug Benefits

It is becoming increasingly popular to have Health Insurance providers allow members to select the type of Prescription Drugs he/she would like to fill at the pharmacist. Different co-payments or deductibles may apply to these selections, so it is important that you understand the difference between a name brand, generic or formulary Rx Drug. Here are some common questions and answers that may help you.

Q. What is a brand name drug?
A. A brand name drug is approved by the Food and Drug Administration (FDA), and is supplied by one company (the pharmaceutical manufacturer). The drug is protected by a patent and is marketed under the manufacturer's brand name.

Q. What is a Generic drug?
A. When a drug patent expires other companies may produce a generic version of the brand name drug. A generic medication, also approved by the FDA, is basically a copy of the brand name drug and is marketed under its chemical name. A generic drug may have a different color or shape than its brand name counterpart, but it must have the same active ingredients, strength, and dosage form (i.e., pill, liquid, or injection), and provide the same effectiveness and safety as its brand name counterpart.

What are examples of each?
A. Valium is a brand name drug whose generic counterpart is Diazepam. On the other hand, Amoxicillin is a generic drug of the brand drug Trimox.

Q. Do all brand name drugs have generic equivalents?
A. No. Approximately half of all drugs on the market have generic versions.

Q. Are generics as safe as brand name drugs?
A. Yes. The FDA requires that all drugs be safe and effective and that their benefits outweigh their risks. Since generics use the same active ingredients and are shown to work the same way in the body, they have the same risks and benefits as their brand name counterparts.

Q. What is a formulary?
A. A formulary is a list of both generic and brand name drugs that are preferred by your health plan. Often, many drugs on the market produce the same results equally well. Health plans will choose formulary drugs that are just as safe and effective as the alternatives but cost less. A team of pharmacists and physicians meet to review the formulary and make changes as necessary.

Q. How does the formulary work?
A. The formulary for your health plan provides a list of medications that a team of health care specialists have approved. Your doctor will write a prescription based on your medical needs, but the formulary provides him with recommendations from the pharmacist and physician team.
An effective formulary system provides a medication safety feature. When drugs and administration methods are systematically included (or deleted) in a controlled drug formulary, there are a number of benefits. For instance, each new drug added undergoes a peer review process that uncovers any safety concerns with the drug. Also, when drugs are systematically added to the formulary, there is adequate time to educate the staff before the drug is used. An organized formulary also ensures that the number and variety of drugs is kept to an effective minimum. There are approximately 13,000 prescription drugs on the market today and several drugs can often be used to treat the same condition. A formulary, based on safety and cost considerations, helps to limit the drugs recommended by your plan's health care professionals.

Q. Is there a price difference between formulary and non-formulary drugs?
A. You will usually pay more for a non-formulary drug when a formulary version is available.

QuoteBroker.com is an online insurance brokerage firm that offers a free health insurance quoting system. Within minutes you can quote and compare all health insurance plans offered in your state. When comparing plans and features, note the Rx benefit with each plan. You will instantly see the cost savings of using a formulary or generic drug benefit.