Brand Name Over Generic

Brand Vs. Generic

PBM owned mail order pharmacies dispense more brand name drugs than generic. In fact, on average, they dispense 10-11 percent less generic prescriptions than your local pharmacy. Rebates and other forms of revenue from brand name drug manufacturers may factor into this lower generic dispensing rate.

PBMs also tend to “blur” the definition of brand drugs. They may use terms such as, multi-source brands or branded generics to give themselves wiggle room to charge higher prices.

Industry analyst, Linda Cahn has argued in Managed Care magazine “…when it is in PBMs interests to classify more drugs as generics, they magically recharacterize the drugs as generics. For example, PBMs wanting to make their generic substitution rate appear greater reclassify drugs that they invoiced as brands as  generics when calculating the number of generic drugs dispensed. Similarly, if a contract calls for a PBM to pay a specified rebate ‘per brand drug claim,’ it can reclassify drugs that were invoiced as brands as generics for the purpose of calculating rebates…”