Benefits Plans - Prescription Drug Plan: Drug Plan Updates and New Drug Releases -
Generic Incentive Program Update

Page last updated: Wednesday, 26-May-2010 20:51:22 EDT

Effective May 1, 2004

Under the Generic Incentive Program established as part of the University’s Prescription Drug Plan beginning in January 2003, your pharmacist dispenses generic drugs whenever available and legally permitted, and you pay the generic co-pay, unless your physician indicated, “dispense as written” (DAW) on the prescription. In that case, the prescription is filled with the brand-name drug specified by your physician and you pay the applicable co-pay. However, if your physician has not indicated “dispense as written” and you still choose a brand-name drug when a generic is acceptable, you must pay the cost difference between the brand-name and generic medication, plus the generic co-pay.

Beginning May 1, 2004, if “DAW” is not written on your prescription and you choose a brand-name medication when a generic is available and acceptable to your physician, you will pay the difference in cost between the brand-name and generic medication plus the brand-name co-insurance or co-pay.

For example, a prescription for a 30-day supply of Paxil, a non-preferred, Tier 3 drug, costs $100 and your physician has not indicated DAW. Paroxetine, the generic equivalent, costs $50. If you choose Paxil, you pay $50, which is the difference in cost between the two drugs, plus $24 for your brand-name co-pay, for a total of $74. If you had chosen generic Paroxetine, your co-pay would have been $7, and you would have saved $67.

Prior to May 1 some members who selected certain brand-name drugs when their physician had not indicated “dispense as written” on their prescriptions were only charged the generic co-pay and did not pay the price difference. This error has been corrected in the system and effective May 1, 2004 you will be charged as described above.

It is always up to you and your physician whether to choose brand-name medications or generics. Members who choose generic medications incur the lowest co-insurance and co-pays.

The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.