In Substantial Increase in Public Preference for Generic over Brand Name Drugs, Harris found that the proportion of people who would more often pick branded drugs fell by nearly one-half, from 32% in October 2006 to 19% in December 2008.
The 93% of Americans who bought prescription drugs in 2008 increased purchases at discount stores like Wal-Mart, Target and Sam’s Club (owned by Wal-Mart). In October 2006, 13% of Americans bought drugs at these kinds of discounters; by December 2008, that proportion rose to 17%. Shopping for Rx’s online rose to 15% from 11%, and in supermarkets from 10% to 12%.
What retail channels fell in prominence between 2006 and 2008? The local independent pharmacy, which fell from 12% in October ’06 to 8% in December ’08; and, chain drug stores, which fell from 39% in 2006 to 33% in December 2008.
And that’s because it’s about the downturn in the economy and financial incentives that consumers face for prescription drugs. A copay of zero dollars, to $4 for some generics at Wal-Mart or Target, to perhaps $10 for a generic is much more attractive to a health consumer than $25, or $35, or higher prices at the point-of-purchase.
Harris points out that this is good news for cost containment. That’s if you’re wearing a payer or plan sponsor hat, from Medicare to employers who provide health insurance.
But if you’re a branded pharmaceutical manufacturer in the R&D business of new-drug breakthroughs, it’s altogether a different implication.