1 small step has big impact on firm's health costs

You probably already encourage employees to use generic drugs whenever possible, but to get the best results, you’ll probably want to give this tactic a try.

The tactic: give employees strong incentives for using lower-cost drugs.

For example: Some companies offer low- or no-cost co-payments to employees who use generic drugs to treat common health problems — such as diabetes or high cholesterol.

In most cases, a company’s prescription benefits manager (PBM) will contract with a local pharmacy (or several pharmacies). If employees purchase generic meds at an authorized pharmacy, then they won’t have a co-pay.

The payoff: Studies show that there’s approximately a 60% participation rate for generic utilization when PBMs offer this perk.