Unbiased Analysis of Today's Healthcare Issues

Docs get free dinners…for prescribing generics?

Written By: Jason Shafrin - Nov• 11•08

The pharmaceutical industry is well known for taking doctors (and medical students) out to nice dinners, giving them presents, and doing whatever they can to entice physicians to prescribe their drug.  Now, health insurers are following the pharmaceutical companies lead.

The AP reports that in order to convince physicians to prescribe generic drugs, a Rochester area health insurer invited doctors to “enjoy a free dinner at an elegant Rochester, N.Y., area restaurant specializing in steaks, chops and top-shelf wines, and pocket $100 on the way out the door.”  If the insurance company can convince physicians to prescribe generic drugs, insurance companies figure to save significant amounts of money.  

Other insurers are use more direct measures: cash.  “Independent Health, a Buffalo, N.Y.-based insurer, offered doctors who prescribe 70 percent or more generic prescriptions in a month a bonus of 50 cents per patient per month. A doctor seeing 500 patients per month who meets the 70 percent minimum can collect $3,000 a year.”

In the long run, this policy may save insurance companies money and drive down premiums.  In the short run, however, physicians may be overly aggressive in convincing patients to take-up generics.  If a patient is currently taking a name-brand drug, switching them to a generic could risk destabilizing their condition.  States such as Massachusetts, Michigan, and New Jersey are contemplating laws which would bar insurers from giving physician cash to prescribe generics.

This goes back to an old story: do we want more choice (name-brands and generics) or lower costs (generics only)?  There is always a tradeoff.

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