*Estimate is statistically different from previous year at p<.05.

‡The average copayments for generic, preferred, and nonpreferred drugs are calculated by combining the weighted average copayments for those types of drugs among firms with a single copayment amount or a multi-tier cost sharing structure. Because in some cases drugs covered as fourth-tier drugs may be covered by health plans through other portions of their coverage (e.g., as part of major medical coverage), the average copayment for four-tier drugs is calculated using information from only those plans that have a four-tier copayment amount.

^Four-tier drug copay information was not obtained prior to 2004.

Generic drugs: A drug product that is no longer covered by patent protection and thus may be produced and/or distributed by multiple drug companies. Average copayments for generic drugs are $7.42 in 2000, $8.05 in 2001, $8.74 in 2002, $9.07 in 2003, $10.46 in 2004, and $10.33 in 2005.

Preferred drugs: Drugs included on a formulary or preferred drug list; for example, a brand name drug without a generic substitute.

Nonpreferred drugs: Generally, a drug product that is covered by a patent and is thus manufactured and sold exclusively by one firm. Cross-licensing occasionally occurs, allowing an additional firm to market the drug. After the patent expires, multiple firms can produce the drug product, but the brand name or trademark remains with the original manufacturer’s product.

Four-tier drugs: New-types of cost sharing arrangements that typically build additional layers of higher copayments or coinsurance for specifically identified types of drugs, such as lifestyle drugs or biologics.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2005. From Exhibit 9.2, at http://www.kff.org/insurance/7315/sections/ehbs05-9-2.cfm.