The year 2011 marks the 5-year anniversary of two landmark developments in the pharmacy marketplace: the implementation of Medicare Part D and inauguration of Walmarts' $4 generic prescription drug program. Both are generally perceived as enhancing access to medications for millions of Americans; Walmart claims that its program has saved patients more than $3 billion.⁺¹ Also, both developments may be intertwined, as some Part D enrollees who experience the coverage gap may seek self-pay refuge with $4 generics.

In addition, it is likely that the economic recession is leading an increasing number of patients to search out deeply discounted drugs, further entrenching these programs⁺² in the U.S. pharmacy arena. In 2007, more than one-third of uninsured, working-age Americans reported unmet prescription drug needs, up from 26% in 2003.⁺³ Walmart estimated that 30% of its $4 generic patients in 2007 were uninsured.⁺⁴ By 2009, the ranks of the uninsured grew to more than 50 million patients.⁺⁵ Indeed, abandonment of prescriptions (ordered but unclaimed at pharmacies) in 2009 rose dramatically and stood at 8.6% for brand-name prescriptions—an increase of 68% since 2006.⁺⁶

Walmart, whose stores serve more than 100 million shoppers (although not necessarily pharmacy patients) each week,⁺⁷ is poised to shake up the pharmacy landscape again with its 2011 entry into the Part D drug plan market. Launched in partnership with veteran Part D sponsor Humana, this plan features a nationwide monthly premium of less than one-half the national average and $2 copays for “preferred” generics obtained only at network (defined as Walmart, Sams' Club, and Neighborhood Market) pharmacies.⁺⁸ Generic drugs purchased at nonnetwork pharmacies will have $10 copays, while zero copays will be available for mail service generics. However, the Humana–Walmart plan requires a $310 annual deductible and steep coinsurance (20–50%) on all brand-name drugs, which varies based on pharmacy provider.⁺⁹ It would be premature to predict whether this plan will be a long-term player or a temporary blip in a Part D market where 10 national prescription drug plans have traditionally captured 70% of standalone drug plan enrollees.^+10,+11

A closer examination of $4 generic programs is warranted to better distinguish perceived or real value, including the breadth of drug offerings (+Table 1) compared with overall and Part D generic drug use in the United States. This low-cost option has positive attributes and points of caution for patients, caregivers, and health care professionals.

Filling a valid prescription, whether for $4 or $400, at a legitimate community pharmacy (bricks and mortar, as well as online pharmacies that meet the National Association of Boards of Pharmacy Verified Internet Pharmacy Practice Sites standard) remains a safer strategy than surfing the Internet. Patients may be tempted by a rogue pharmacys' e-mail offers for deeply discounted branded prescription medications that (1) may represent a counterfeit product and (2) can too often be secured by completing an online questionnaire with no licensed prescriber or pharmacist involved. Perhaps in recognition of medical conditions that are frequently targeted by such solicitations, Walmarts' discounted drug list includes the erectile dysfunction drug vardenafil, sold at $9 per tablet (with a limit of 10 per patient per month).⁺¹

Some Medicare Part D enrollees who suddenly find themselves responsible for 100% of their prescription drug costs in the coverage gap may turn to $4 generic programs to maintain their regimens, if clinically possible. The Centers for Medicare & Medicaid Services (CMS) found that in each year since Part D began, about one-quarter of enrollees who do not qualify for “extra help” via the low-income subsidy (LIS) entered the so-called “doughnut hole.”⁺¹⁴ (LIS enrollees receive covered brand and generic medications at copays ranging from $1.10 to $6.30, including during the gap.) The authors' examination of the most commonly prescribed Medicare Part D generic drugs in 2008 and Walmarts' $4 generic list revealed the following:

This analysis was based on two of a dozen different Part D top 100 drug lists for 2008 (CMS data released in 2010)—rankings by total fills and rankings by total costs—for enrollees who did not qualify for LIS.⁺¹⁵ This particular population represents about two-thirds of Part D enrollees⁺¹⁴ and is the subgroup most likely to be fully exposed to drug costs in the coverage gap. Thus, non-LIS enrollees would be the most likely candidates for $4 generics programs. (A Walmart list from 2008 was not publicly available for a same-year comparison; therefore, the comparison was made with the October 2010 list.)

Starting in 2011, the Affordable Care Act gradually reduces cost sharing for non-LIS Part D enrollees in the coverage gap, with brand-name medications discounted by 50% and generics discounted as well. However, the gap will not be fully closed until 2020, so affected enrollees might continue to seek relief through discounted generics programs.

Patients with chronic conditions associated with stigma may prefer to pay cash. Where clinically justified, $4 generics may be a valuable option. As psychiatry resident Vidhya Selvaraj, MD, observed, “The medications we prescribe are often quite expensive and frequently indicated for long-term use. In addition, many health plans have limited coverage for mental health and substance use disorders, which increases out-of-pocket costs for our patients.” She noted that Walmarts' $4 generic list has 15 psychotropic medications, including antidepressants, antipsychotics, mood stabilizers, and anxiolytics. “Although some drugs on the list belong to an older generation of psychotropic drugs, their efficacy and safety data are frequently comparable with those for newer [higher-priced] drugs. In addition to gaining experience with medication cost containment, I was able to gain more knowledge and experience with the older generation of psychiatric drugs,” Selvaraj added.⁺¹⁶

Regardless of benefits to $4 generic programs, neither patients nor health care professionals can afford to discount precautions to optimize safe medication use.

For many medication users, both young and old, $4 generic prescription programs have become a staple of their shop-around pharmacy experience. Better information (such as through electronic medical record decision support) at the point of prescribing about patient cost sharing could lead to more affordable alternatives⁺¹⁷—with fewer pharmacy counter “surprises” and abandoned prescriptions. Until then, however, conserving dollars while bypassing the full complement of professional and educational resources to promote safe medication use could unwittingly reduce a medications' full value many times over or even result in preventable patient harm.