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51+: Mandatory Generic Substitution and Dispense as Written Provisions

Jul 02, 2009


Important Prescription Drug Benefit Information for Large Group: Mandatory Generic Substitution and Dispense as Written Provisions

There are two important updates regarding the Mandatory Generic Substitution (MGS) and Dispense as Written (DAW) benefits recently announced as part of Anthem Blue Cross' ongoing efforts to manage prescription drug benefit costs. This information impacts only those groups that are on plans with the new benefits. The new lower mail order benefit that offers a 90-day supply of generic maintenance medication for a single copay was implemented.

Mandatory Generic Substitution (MGS)

Anthem Blue Cross intended to implement the MGS benefit effective 5/1/09. To ensure a smooth transition for members, implementation was delayed to 7/1/09 for retail and 7/10/09 for mail order prescriptions.

Therefore, groups that renewed 5/1/09 or 6/1/09 have not been subject to the MGS provision. Their prescription benefits were administered as they had been previously. A member filling a brand drug prescription when a generic exists during this time period paid the brand copay only. 

For 5/1/09 and later, groups renewing with the MGS provision: Beginning 7/1/09, the MGS provision will be implemented. This means that if a member requests a formulary or non-formulary brand name drug when a generic substitution exists, they will pay the generic copay plus the difference in the allowable charge between the brand and generic drug (but not more than 50 percent of the Anthem Blue Cross negotiated rate).

While there was no additional cost for members during the two month period of May through June, brokers should be aware of the issue as questions may arise when the new benefit takes effect 7/1/09.

Dispense as Written (DAW)

The MGS benefit includes an important Dispense as Written (DAW) provision. 

With the implementation delay, an enhancement to the MGS program was introduced. Effective 7/1/09, DAW will override the "pay-the-difference" provision outlined above. When DAW is indicated on the prescription, a member will be charged the brand copay only and will not pay the cost difference between the generic and the brand name drugs.

Note that when a member has a prescription for a brand drug and there is a generic available - and DAW is not indicated on the script - the member will be charged the generic copay plus the difference between the generic and brand drug (but not more than 50 percent of the Anthem Blue Cross negotiated rate).

Communications Plan

In order to ensure employers and members are kept abreast of these changes, Anthem will be sending out communications to each audience. Employers and members who renewed on 5/1/09 or 6/1/09 and were impacted by the delay will receive a letter notifying them of the change. Samples of these letters are attached for your reference.

For more information, contact your Beere & Purves representative.
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