Archive for September, 2010

Generic Drugs – Safe & Save

In the last post, we saw how Store or private band products helps to save tons of money instead of buying national brand products. I got lot of enquires about Generic brand drugs and want to address that topic too.

What are Generic Brand Drugs?

According to FDA(Food and Drug Administration), Generic drugs are copies of brand-name drugs and are the same as those brand name drugs in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use.  Generic drugs are required to have the same active ingredient, strength, dosage form, and route of administration as the brand name (or reference) product.  Generic drugs do not need to contain the same inactive ingredients as the brand product.

Are they safe?

As per FDA, today 7 in 10 prescription filled are generic drugs. Health care professionals and consumers can be assured that FDA approved generic drug products have met the same rigid standards as the innovator drug. All generic drugs approved by FDA have the same high quality, strength, purity and stability as brand-name drugs. And, the generic manufacturing, packaging, and testing sites must pass the same quality standards as those of brand name drugs.  You can check more facts and Myths about Generic drugs at generic drug section of 
FDA.gov

Why Generic drugs are cheaper than brand names?


When a drug company introduces their new drug to the market, they have to go thru lot of process starting from research, innovation, development, testing, approval, marketing and other costly affairs to get their drug out to the market. With more scientific advancement comes more cost associated with the research. Like every other business, money spent on research and other process by the drug company gets transferred to the product price and to the consumer in order for the company to make profit.

During the patenting and approval process, innovators/drug companies are restricted  to use the patent for specific period of time which should allow them to set their price in order to get their return in investment and make some profit. After that period, drug chemical composition is open to any other company to manufacture the same drug in similar manner and make it available as Generic. Those companies don’t have to spend money on research and approval except they need to get FDA approval on their generic drug. That’s why brand names cost more than the generic brands.


Are all generic brand drugs same?


Yes, very much. Whether you buy the generic drug in Walmart or Kroger or CVS or Walgreen, it will have the same chemical composition. May be their manufacturing site might differ but all site has to go thru approval process to get the product out to the market. So it doesn’t matter where you buy but buying the right generic equivalent to brand name matters.

How to save on buying Generic brands?


Independent research has shown that total prescription drug expenditures in the United States only increased by 4.0% from 2006 to 2007, with total spending rising from $276 billion to $287 billion. This is a sharp decrease from the 8.9% growth rate observed in prescription drug expenditures in 2006. One factor cited as a reason for the slowdown is an increase in availability and use of generic drugs.

Generic drugs helps save tons of money and it is your choice to take advantage of the savings.  How? It is easy and simple. Here are some tips.


1. Many group and individual medical policies pay either full or 80% of the cost of generic drugs compared to only 25% on national brands. They support and encourage buying generic brands which saves them money as well. Also preordering 3months worth of supply in advance saves another 10% or more depending on the pharmacy service.

2. Buy generic over the counter medicines for headache, cough, fever etc., I save atleast $1 – $3 dollar on purchase of CVS or Walgreen generic over the counter medicines instead of brand names, sometimes even more when I get coupons.

3. Lastly, don’t fight over for a penny of savings on generic drugs. If the generic brand only saves a dollar or two compared to brand name and your partner prefers brand name, just let it go. Fighting is not worth it for the small amount of saving.

In conclusion, Generic drugs have become more popular these days and many people are starting to realize that they are safer than ever. It is always good to buy generic drugs which are safe and saves you money.

Some content source: fda.gov
Image courtesy: trustpharma.net

Buying Store Brand vs National Brand Products

Being frugal is not just about finding good deals, it is also about finding whether the price paid is worth for the quality of the product purchased. It is about convincing your partner/spouse to think about saving and shopping wise. Adding to the list, it also about buying Store/Generic brand products vs choosing national brand name products. It is very important in this current tough economical condition.

This topic might seem old but it has recently picked up lot of attention and tracsion in past year or two. Main reason, recession. Many consumers are looking for ways and avenues to cut their cost and save some money for tomorrow because of employment uncertainity. At the same, many retailers and superstore giants took this as a golden opportunity and started pumping more money to their grocery list for creating or expanding their store brand choices. Their business model is to provide the same product with cheaper prices to attract customers with an ambition to grab small slice of big consumer market favoring national brands.

Little history won’t hurt

According to the costco connections article published in Oct 2009, this store brand, private label might seem new to Americans but the trend has been popular in European countries long time ago. Actually, US used to have private label concept long time ago, example 
Sears launching its famous Kenmore appliance brand in 1927.




During
1960s and ’70s, national brands pumpled big bucks into TV advertising, converting many U.S.  Consumers into national-brand loyalists and private-label lost their luster.  According to the New York–based Private Label Manufacturers Association (PLMA), private-label market share in Switzerland is now at a whopping 54 percent (the highest in Europe), while market share in the United Kingdom is poised to climb over the 50 percent mark. 



Private label/ Store brand started picking back up in US during late 1970’s and early 80’s when the recession hit. With no-frills, deeply discounted items—often of  Questionable quality, store brand trend didn’t last long but just merely become bit usual with regular products being branded and sold by super store gaints as store brands to attract customers by low prices. Current revolution is different compared to the previous one according to many analyst.  According to many analyst, this time the revolution also made the retailers to concentrate on quality.They predict store brands will continue to do well, and grow, long after the current recession is over, thanks to advances in quality and innovation and better marketing strategies.  We will have to wait and see.

Why you should try Store brand?


In fact, an article in the October issue of Consumer Reports pointed to an average 27 percent savings across store-brand products tested in 29 different food categories.

“Private Label 2009,” a study by Information Resources Inc. (IRI), a Chicago- based market research –  notes that nearly 80 percent of U.S. shoppers now exhibit “positive attitudes” toward private-label products, up 7 percent from 2008. And those attitudes are working a bit of magic on sales. In fact, The Nielsen Company of New York reports a 7.4 percent gain in dollar sales within U.S. food, drug and mass-merchandise outlets during the 52 weeks ending July 11, 2009, reaching $85.9 billion and accounting for a 16.9 percent share of the overall market.

It’s very clear that the current recession has been instrumental in private labels’ recent stellar performance. A number of shoppers have admitted to trying store-brand products for the first time in the past year simply as a means to stay within their budgets.

In a recent consumer survey, PLMA  found that nine out of 10 shoppers agreed that the private-label/store brand items they buy are just as good as—or better than—national-brand products. Moreover, almost half of the respondents  indicated that they wanted their supermarket to carry a greater assortment of private-label products.

Not all Store Brands are made equal

Now every big superstore chain/whole sale clubs has their own store brand. Costco’s Kirkland, Sam’s MemberMark, Walmart’s GreatValue, Target’s Archers, Kroger, Safeway O organics, Sears Kenmore and list goes on. The super store chains and whole sale gaints are trying to penetrate in every product type possible to boost their business starting from cereal boxes to meat to ice cream to detergents to utensils and list goes on. Whether every one of their product is of good quality matching the national brands is big question in everybody’s mind.

Many store brands are merely a clone of the national brand in product aspect but not all cereals are made same way. Not many companies are putting their effort in product innovation and quality. Many Super stores just partner with big manufacturers and label the product in their name. That’s about it. But others spend their time and money to research and create their own products like Costco. You should identify them and buy from them to be sure that you are getting great quality and good price.

5 Things to consider when opting for store brands

  1. Price shouldn’t be the only factor driving your decision. Compare the ingredients and check qualtiy.

  2. Anything can be given a chance once. So try it out once and make your  decision as per your experience or check with your neighbor or friends.

  3. Don’t be hard on yourself to buy every item from store brand especially food. Negotiate yourself and balance accordingly. 

  4. Obviously give preference to buy Non-food products like office supplies and others in store brands.

  5. Finally, Generic brands are same chemical composition as brand names and can be trusted for the quality but don’t always assume a particular store brand will be always of good quality compared to national brand. Assumption is dangerous.

In conclusion, be watchful, be frugal and buy smart. Walmart has gone to great heights by creating its own branded cell phone plan called “Family Plan” tieing up with TMobile service provider.



Read more about the Private label Vs National Brand from the costco article published in costco connection magazine last year.


Image: Costco connection magazine

PiggyBank Revolution – Save money Smart

We all heard of traditional Piggy bank. Either you were taught to use Piggybank to save money  by your parents or as a parent you are teaching kids to use to save money. Piggy bank helps to nurture saving habit in us. That trend has gone digitial few years back and many started using digital bank like Digital Money jar show here. Now Internet has taken that further to another level and we now have SmartyPig. I call it, adult version of Piggy bank or Piggy bank webicized.

In my last post, I talked little about Smartypig.com and promised to post a detail further blog after my first use. With first hand user experience at SmartyPig.com, I am posting this blog to share my views, saving strategy and tips/tricks to get around the site.. 

What is the Big idea about SmartyPig.com?


It is not real big or new innovation. I like the concept of taking the traditional piggy bank saving to Internet and giving it a boost by adding social media networking to it. They call it a unique patent pending savings program launched to help people save for specific goals.

How can you use it?


First of you should set you mindset, it is neither a bank or credit union. It is just finance based internet company which bridges consumers and banking breaking away from traditional savings methodology. I came to know about this website from mymoneyblog.com.

Usually, we either have checking account for daily transaction and savings account for saving money that earns a meager interest, currently .50%. We also sometimes have CD’s to save for longer term. These traditional saving mechanism are less flexible and doesn’t open doors to accept external contributions. SmartyPig bring it all together. SmartyPig is all about giving importance to your goals and savings account is  placed behind it.

You can have any number of goals you want and start putting money to it. You don’t have worry about opening any savings or CD’s. To top it, you can even accept contributions towards your goals via social media sites like facebook.  Like if you are saving for your kids education, instead of getting stuck in 529 savings plans, you open smartypig account and accept contribution from kids grandparents and relartives. That’s smart but the draw back it only earn savings rate not investment rate of return.

Interest is configured using a daily accrual method, compounded quaterly and posted to a customer’s account but  up-todate earning is shown in your account.


To close your goal, simply click on Stop Goal. You will then have the option of receiving your current savings plus interest on the SmartyPig MasterCard® Debit Card, the gift card of a best-in-class retailer partnering with SmartyPig, or you can ACH the funds back to your existing checking or savings account.


Good, Bad and Ugly

  1. Account gets high interest from reputed BBVA bank. High interest rate of 2.15% as of Sep, 3, 2010 and will reduce to 1.75% from Sept 7th, 2010. Still by par to any banks, even INGDirect.com

  2. All your funds are insured by FDIC upto $250,000. The site is secured by Verisign.com and other security providers.

  3. Get boost for your savings from retailer gift cards with bonus percentage added to it – Macy’s has 12% bonus.

  4. Withdraws can be only via ACH transfers, debit card or retail shopping gift cards.

  5. There is no Account number for your accounts because it is not traditional bank account. It is secured for security reasons.


Tips and Tricks

1. During the setup process, you can do one-time deposit or recurring. If you want to setup for recurring, you need put initial deposit which is one time and recurring amount. Initial deposit cannot be your first month deposit. So if you want initial deposit to start this smonth and recurring to kick start next month, that doesn’t work because recurring date is auto selected. So I have to do the initial deposit first and come back later time to setup recurring deposit to pick up next month date.

2. If you want to withdraw money from a goal, you cannot do partial withdrawal. Solution recommended, you can start a new goal and move the money to new goal leaving the money you want to withdraw. Then close the old goal to get the money transferred to your bank account or get debit card.

3. During the goal setup, once you add your goal amount and try to setup recurring deposit. There is a link to try SmartyPig reccuring deposit suggestion which calculates the recurring amount to reach your goal on time. It doesn’t consider friends contribution if you plan to get one.

These are some of tips/tricks which I figured out. They also have great FAQ section to clarify any of your doubts and bet they have good customer service to answer you calls. Try it out and you won’t really regret the extra yield from better interest rates.

Disclaimer: I am neither employee or advertiser and no way connected to Smartypig except being a valuable customer. The above posting is from my first hand experience with Smartypig website.

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