Summary Points:

• Spending on brand-name prescription medications, particularly brand-name biologic drugs, continues to increase.
• Considerable savings and improvements in medication adherence are possible from greater use of more affordable generic drugs and imminently available follow-on biologics.
• Strategies to promote greater prescribing of generic drugs and follow-on biologics include traditional information-supplying programs such as formulary decision support and academic detailing and more novel financial incentives.
• While private insurers, qualified health plans, and employers may legally offer physicians financial incentives to prescribe generic drugs and follow-on biologics, marginally greater risks and a developing evidence base militates against physician payment for therapeutic or noninterchangeable follow-on biologic substitution, and—at this time— for bioequivalent substitution of narrow therapeutic index (NTI) drugs or interchangeable follow-on biologic substitution.
• Implementation of the various physician-centered strategies to promote greater prescribing of generic drug and follow-on biologics must be accompanied by comparative cost-utility studies assessing patient health outcomes.