The influence of managed care on generic prescribing rates: an analysis of HMO physicians

Retail expenditures on prescription drugs continue to grow annually by double digits, while the share of prescriptions dispensed as generics remains relatively constant. Efforts to curtail rising drug expenditures have been exhibited by Managed Care Organizations (MCOs), yet drug expenditures continue to rise. Using the National Ambulatory Medical Care Survey (NAMCS) for 1997–2000, this study examines how managed care, specifically Health Maintenance Organizations (HMOs), influence the physician's decision to prescribe the generic version of a multi-source drug. The findings show that HMO physicians are not significantly more likely to prescribe generic drugs than non-HMO physicians. Among HMO physicians, different cost reduction tools effect generic prescribing behaviour in different ways, with, the size of the effect depending on the patient and physician relationship with the HMO.