JustCare

Tag: Generic drugs

  • Why won’t insurers cover some generic drugs?

    Why won’t insurers cover some generic drugs?

    Some people are finding that they cannot fill their prescriptions for generic drugs at the pharmacy; their insurers will only cover the brand-name versions. Why won’t health insurance companies cover some generic drugs? It appears that insurers and the pharmacy benefit managers (PBMs), who set up their list of approved drugs, can benefit financially when they require their members to take brand-name drugs rather than generics.

    We all know that in almost every case, generics are the equivalent of the brand-name drugs. They must have the same active ingredients and must be the “bioequivalent” of the brand name drug, delivering the same strength ingredients at the same time. They must have the same purity and stability and come in the same form—e.g., tablet, liquid—as brand name drugs. And, they must have the same therapeutic effect as brand name drugs with the same risks and benefits.

    But, the New York Times and Pro Publica report that the insurer practice of requiring people in some cases to use brand-name drugs has been around for some time and is becoming increasingly common. Since forcing people to take the brand-name drug does not lower costs for consumers and can increase their out-of-pocket costs, it stands to reason that PBMs and their insurer clients make more money by requiring people to use brand-name drugs. PBMs are responsible for designing the list of approved drugs or “formulary” for insurers.

    Humana is one of the insurers that, in some cases, only covers brand-name drugs when a generic is also available.

    To be clear, pharmaceutical companies are also responsible for this bizarre state of affairs. They are handing over a lot of money to the PBMs and the health insurers to keep their brand-name drugs on their formularies and to steer their members to their higher-cost drugs.

    Of course, everyone ends up spending more as a result–taxpayers in the form of higher Medicare expenditures, consumers in the form of higher insurance premiums overall, and patients who need these drugs, when they are forced to pay out of pocket for them to meet their deductibles.

    If you find yourself being required to buy a brand-name drug instead of the generic, at a greater out-of-pocket cost, appeal to your health plan and report it to your local legislators. There is no justification for this practice, only greed.

    If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • For some generics, little competition, big price hikes

    For some generics, little competition, big price hikes

    Americans are taking a lot more generic drugs today than ever before. And, for the most part, they are spending a lot less for these generics than for their brand-name alternatives. But, market failures in the generic drug marketplace are leading to little competition, big price hikes and shortages of a number of drugs, according to Thomas Bollyky and Aaron Kesselheim in a paper for the Hutchins Center.

    Today, generic drugs on average cost about one fourth of the price of a brand-name drug in the U.S. And, almost nine in 10 (89 percent) prescriptions filled are generics, up from not even one in five (19 percent) in 1984. This huge increase in generic-drug use stems largely from laws that no longer prevent automatic substitution of the brand-name for the generic at the pharmacy and financial incentives for people to choose generic drugs over brand-name drugs.

    That said, some generic drug prices are rising substantially for a host of reasons. Several generic drug manufacturers are multinational corporations, focused on generating billions of dollars in profits. And, drug companies may choose to manufacture generics only where there is less competition, so they can charge more. Prices tend only to come down by slightly less than half of the brand-name drug price when there are two competitors; it typically takes five competitors to drive the price of the generic drug down to a third of the brand-name price. The prices usually come down to about an eighth of the brand-name price with 15 competitors.

    High generic drug prices are a function of insufficient competition for a medically necessary generic drug. Insufficient competition can also mean that demand for the drug may exceed the supply. In 2011, the Government Accountability Office (GAO) found that 251 medically necessary drugs were unavailable though approved, and the number increased to 456 in 2012. At one point, there were drug shortages for 12 percent of FDA-approved drugs, biologics and vaccines.

    Generic drug prices have grown significantly for many drugs according to the Government Accountability Office, doubling for more than 300 of the 1441 generic drugs, between 2010 and 2015. During this time, Martin Shkreli saw the profitability of owning the right to manufacture Daraprim and increased its price immediately 57-fold from $13 to $750. Other speculators made similar drug purchases, along with steep price increases.

    Here’s more from Just Care:

  • Drug importation could drive down price of generics

    Drug importation could drive down price of generics

    Generic drugs used to be synonymous with low prices, but lately drug shortages and price increases have driven up the price of many generic drugs. There are a range of market failures in the generic drug marketplace.  A May 2017 Hutchins Center Working Paper by Thomsas Bollyky and Aaron Kesselheim considers ways to drive down the price of generics through drug importation.

    Market failures in the generic drug marketplace need addressing so that Americans have access to affordable drugs. There is far less competition than desirable as generic drug companies have been acquired or merged with other companies. And, incentives for generic drug manufacturers to enter the market appear to be inadequate; 130 drugs that have gone off patent (10 percent of the 1,328 branded drugs) have no company seeking FDA approval to manufacture them.

    Even when pharmaceutical companies want to distribute a generic drug, there can be huge challenges. Sometimes the brand-name manufacturer refuses to supply the generic manufacturer with its drug so that it can test for bioequivalence and get FDA approval to market the drug. Sometimes, the brand-name manufacturer takes its drug off the market before the patent expires and replaces it with a second version of the drug–e.g., once a day pill replaces a twice daily pill–delaying the introduction of a generic for the patent life of the second version of the drug.

    To address these and other market failures, Senators Grassley, McCain and Klobuchar have requested that Secretary Tom Price allow drug importation from Canada for certain high-priced drugs. And others in Congress have asked the FDA to allow importation from countries that have highly regulated markets when there is inadequate competition. The FDA already can allow importation when there are generic drug shortages. Kesselheim and Bollyky propose a three-part strategy of their own:

    1. Passing the Generic Drug User Fee Act Reauthorization (GDUFA) would give the FDA the needed funds to speed up approval of generic drugs and help to eliminate the backlog of requests. Priority should go to drugs for which there is only one manufacturer.
    2. Allowing the FDA to work with other countries with similar regulatory standards to create a way for drug manufacturers to submit one application for all regulatory authorities, while leaving it to each government authority to determine whether to approve the drug. The data suggest that a number of countries have similar standards for drug regulation.
    3. When there are three or fewer drug competitors in the U.S., allowing the FDA to grant approval of generic drugs for use in the U.S. because they were approved in another country with similar strict efficacy and safety standards, “reciprocal approval.”  As it is, we import one fourth of our drugs–$86 billion in imports.  And four-fifths of the active ingredients in our drugs are imported, along with two-fifths of the finished drugs.

    Studying generic drugs for which there is no competition in the U.S. today, Bollyky and Kesselheim found that about two-thirds had competition outside the U.S. These international generic drug sources, if permitted to be sold in the U.S., could help spur competition in the U.S., increasing the supply of these generic drugs, bringing down their prices and ensuring access to critical medicines in the U.S.

    Here’s more from Just Care:

  • What to do about high drug prices?

    What to do about high drug prices?

    A new Commonwealth Fund paper, Getting to the Root of High Drug Prices, offers a plan for what to do about high drug prices.  Unless we can address the root causes, we are on a path to an unsustainable health care system; millions of people will be unable to fill their prescriptions and get needed care. Congress needs to fix current incentives to promote innovation and price competition.

    The U.S. is growing larger and older, both of which contribute to overall prescription drug spending. And, people are also taking more drugs. But, the biggest drivers of higher spending between 2010 and 2014 are higher drug prices and shifts in usage to higher-cost drugs.

    The authors find a distortion of federal policies intended to balance innovation and price competition. Innovation should not undermine access to medicines, as it too often does today. Prices, in turn, must be fair and affordable to all stakeholders, including patients, government and taxpayers.

    And, good information on a drug’s value and comparative effectiveness as well as price should be available. The authors argue that drug corporations should be able to explain and justify drug prices.

    The initial price for a new drug has risen astronomically over the last ten years. For example, in the four years between 2010 and 2014, the initial cost of oral cancer drug treatment grew six-fold. And, after introduction, with patent protections granting drug corporations monopoly pricing power, the prices generally keep going up.  In 2015, older adults saw a 15.5 percent increase in the retail price of 268 popular brand name prescription drugs from the prior year—130 times the rate of inflation.

    Federal dollars—taxpayer dollars— fund almost half the research and three out of four new drugs are developed with federal funding. But, taxpayers and patients are not seeing the benefits as much as they should in terms of fair prices.

    One hundred and eighty-two (182) widely used older drugs that have gone off patent still have no generic drug alternative, allowing drug corporations to keep their prices artificially and excessively high.  Many other drugs that have gone off patent do not have adequate competitors to drive prices down. More than 500 drugs only have one generic on the market.

    Why is there so little competition in the prescription drug and biologic drug markets? In Europe, the competition for both is far more robust. In the U.S., however, there are fewer companies manufacturing prescription drugs, in part because of mergers and acquisitions. Unlike in Europe, the U.S. also has not fully developed a regulatory framework for approving biosimilars to compete with biologics.

    Some drug manufacturers appear to be taking actions that undermine competition. Some are under investigation for price fixing and bid rigging. Doxycycline went from $20 for 500 pills to $1,849 for 500 pills in six months.  Three drug corporations manufacturing insulin are also being investigated for price fixing insulin treatments and tripling their prices over ten years.

    And, some drug corporations pay generic manufacturers not to enter the market, costing taxpayers and patients an estimated $3.5 billion. Or, instead of keeping a patented drug on the market, they change it slightly, create a new patent and take the original drug off the market. Or, they create a “patent cluster”—several patents for a single drug—that keeps competitors away.

    We also don’t have a good sense of what different agencies are charging and paying for drugs, and federal law does not require disclosure of this information. Moreover, we too often don’t understand the relative efficacy of drugs.

    And, while states can be part of drug purchasing pools, we restrict states in their ability to negotiate drug prices and decide which drugs they’ll cover based on value.

    If you want Congress to rein in drug prices, please sign this petition.

    Proposed solutions:

    • Shorter patents for new drugs or somehow tying the patent life to the drug corporations’ returns.
    • Create a different way of pricing life-saving drugs for government purchase to protect public health and curb spread of disease.
    • Create ways to generate competition. For example, offer incentives for generic manufacturers to enter the market and drive competition or amend the Hatch Waxman Act so as not to delay the introduction of generics.
    • Prohibit pay for delay and the ability of manufacturers to take patented drugs off the market and replace them with other patented drugs that are not materially different.
    • Invest in comparative effectiveness research.
    • Require manufacturers and PBMs to reveal pricing and price increases and forbid use of coupons that hide pricing.
    • Allow states to operate PBMs so that they have more negotiating power.

    Here’s more from Just Care:

  • Pharma fingerprints all over Trump drug price executive order 

    Pharma fingerprints all over Trump drug price executive order 

    Across the political spectrum, Americans support reining in prescription drug prices—Democrats, Independents and Republicans alike. But, despite claims to the contrary, President Donald Trump has no intention of reining in drug prices. A draft Trump Executive Order on drug prices obtained by the New York Times has Pharma’s fingerprints all over it and is designed to drive up drug prices further. It’s all about strengthening the power of drug companies to set prices around the world.

    Pharma wants greater power to charge people outside the U.S. more, as reflected in the draft Executive Order. But, higher prices outside the U.S. likely means higher prices around the world. Pharma is making no promises to reduce drug prices in the U.S.

    Pharma also wants to loosen U.S. regulations so that drugs get to market faster at less cost to the drug industry. But, that policy–also in the draft Executive Order–would jeopardize patient safety further, not promote lower drug prices.

    Pharma’s support of value-based pricing, another piece of Trump’s draft Executive Order, sounds good in theory. But, it is another way for Pharma to try to justify high drug prices. Only if somehow it can be proved that the particular drug didn’t work would the price come down. And, Pharma is not proposing a full refund for drugs that don’t work, as tends to be the case with other products that do not deliver value. Moreover, how much time and money would it take to prove lack of efficacy or patient safety?

    Pharma also wants to be able to charge more for drugs to hospitals treating low-income patients under the 340B program.

    The draft Executive Order does not suggest discounting drugs for people with Medicare, nor does it recommend reducing brand-name drug prices.

    And, a proposal in the draft Executive Order to give more tax breaks to companies manufacturing generic drugs would mean more money to Pharma with no guarantees of lower generic drug prices. Yet, another proposal to permit dissemination of off-label information to insurers and PBMs pre-FDA approval also would undermine patient safety.

    Not surprisingly, the New York Times reports that many of the people involved in drafting the Executive Order have longstanding ties to the drug industry.

    Senator Franken along with several other Senate Democrats have a bill in Congress to rein in drug prices–the Improving Access to Affordable Prescription Drugs Act. Congresswoman Jan Schakowsky has introduced a complementary bill in the House.

    If you believe that we need policies to rein in drug prices not give Pharma more power to drive prices up, please sign this petition.

    Here’s more from Just Care:

  • Maryland law protects people from prescription drug price-gouging

    Maryland law protects people from prescription drug price-gouging

    With more than one in five Americans today not filling their prescriptions because of the cost, it’s time to bring down drug prices. While we wait for Congress to act, even generic drug manufacturers are hiking up some drug prices astronomically because they can. And, some states are fighting back. Maryland just passed the first of its kind bi-partisan prescription drug anti-price-gouging legislation to protect its residents from huge generic drug price increases.

    Under Maryland’s new law, its attorney general can sue generic pharmaceutical companies for hiking up prices too high and return the money they win to people taking these drugs and other payers. The attorney general’s authority only extends to non-competitive markets, where three or fewer manufacturers are producing a drug. For meaningful competition, there needs to be four or more drug manufacturers.

    To make the case, the attorney general must show that the price hike is legally “unconscionable” as well as unjustified, as Jeremy A. Greene and William V. Padula explain in this New England Journal of Medicine piece. The legislation, supported almost unanimously by Democrats and Republicans in the Maryland State legislature, addresses one of the public’s top policy priorities.

    Generic drug corporations increasingly have been taking advantage of their ability to drive up generic drug prices enormously when the market for a drug is not competitive, simply because they can. Many of the generic drugs seeing huge price increases have been on the market for decades, such as insulin and albuterol, at a fraction of their current cost.  The Maryland Attorney General’s office is also suing six generic drug manufacturers for price-fixing in violation of anti-trust laws.

    While Maryland’s legislation is a strong step forward, we need federal legislation to ensure fair drug prices. Maryland does not begin to have the resources to take on the drug companies in each instance that they gouge consumers. Reining in drug prices is a bi-partisan issue across the country, but we will need to see change in Washington D.C. before Congress is likely to pass any meaningful drug pricing legislation.

    Of note, drug transparency legislation in Maryland, which would have given people notice of drug price increases, did not get passed.

    If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • Four things you may not know about generic drugs

    Four things you may not know about generic drugs

    Tylenol, Advil, Lipitor are common household names. And, millions of people buy them, along with many other brand name drugs. But, according to Consumer Reports, the generic versions of these drugs are virtually no different, and they often cost as little as one-tenth as much. Generic drugs are a safe and effective alternative to brand name drugs.

    To save money on your drugs, find out whether the brand-name drugs you are taking have generic alternatives. If so, talk to your doctor about switching to a lower-cost generic drug that is as safe and effective. (Be sure to share a list of the drugs you are taking, prescription and over the counter, to make sure they are safe for you; they may be dangerous in combination; and some drugs, such as NSAIDS, e.g. Aleve and Advil, should be taken in moderation to lessen risk of stroke and heart attack.)

    Here are four things you may not know about generic drugs, all required by the Food and Drug Administration:

    1. Generic drugs must have the same active ingredients in the same strength as brand name drugs. Each generic drug must be the “bioequivalent” of the brand name drug, delivering the same strength ingredients at the same time.
    2. Generic drugs must have the same purity and stability as brand name drugs.
    3. Generic drugs must come in the same form—e.g., tablet, liquid—as brand name drugs.
    4. Generic drugs must have the same therapeutic effect as brand name drugs with the same risks and benefits.

    The main reason generic drugs cost less than brand-name drugs is that manufacturers do not bear the cost of developing them and generally do not spend money advertising them.

    Perhaps the biggest difference between brand name and generic drugs is that they do not look the same. They cannot by law. Inactive ingredients can also be different. As a result, a small percent of people can be allergic to the inactive ingredients in a generic drug.

    Of course, there are many drugs we need that are enormously expensive and for which there are no generic alternatives. That’s why the top policy issue for Americans is government drug price negotiation.  And, even doctors have allied to advocate for lower cancer drug prices. Unless the government steps in to negotiate drug prices, an increasing number of people will be unable to afford their prescriptions even with insurance. Today, more than half a million Americans spend more than $50,000 a year on their drugs.

    If you support government drug price negotiation, please sign this petition.

    Here’s more from Just Care:

  • FDA backlog keeps generics from coming to market

    FDA backlog keeps generics from coming to market

    In October 2015, there were as many as 3,000 generic drugs waiting to be approved by the Food and Drug Administration. FDA underfunding may explain it in part. So might incomplete information on applications by their manufacturers as the FDA claims. But, whatever the reason, the result is that we end up paying high drug prices, (though some generic drug prices are sky high.)

    Generics can cost as little as 20 percent of what brand-name drugs cost; they can also cost a lot more.  Around 8 out of 10 prescriptions are for generic drugs but they account for less than 30 percent of our drug spending.

    The 2012 Generic Drug User Fee Amendments now require drug makers to help offset the cost of FDA review. In exchange, the FDA is supposed to speed up approval of these applications.  And, the FDA says it has. However, it also says that the application process is often slowed down because of faulty applications, which may fail to address negative side effects of inactive ingredients or other important information.

    Here are four things you may not know about generic drugs and, if you’re interested, a short primer on how federal policy promotes high drug prices.

  • Top drugs in U.S. now three times more expensive than in U.K.

    Top drugs in U.S. now three times more expensive than in U.K.

    You’re not imagining it. Drug prices in the United States continue to escalate at lightning speed. A new Reuters-commissioned analysis reveals that we are now paying three times more than people in the United Kingdom–that’s right, 3 times more–for the top 20-selling drugs in the world. Americans subsidize the cost of drugs for people around the world, paying 6 times more than Brazilians and 16 times more than people in India for the same drugs.

    Unlike in every other country, drug companies control the price of drugs in the United States. Not surprisingly, drug companies have jacked up prices astronomically between 2008 and 2014, with prices increasing 127 percent. Shkreli is one of many drug company CEOs giving drugs extraordinary price hikes. Hedgeclippers reports on the 25 drugs with the largest price hikes in the last two years. Since the drug companies control the prices of these drugs, there is no apparent limit to how high they will go. Here are six of the 25:

    1. After Shkreli became the CEO of Turing pharmaceuticals, he raised the price of one of its drugs, Daraprim, 5,000 percent, from $13.50 to $750 a pill. To enable the increase, he created a barrier to keep generic drug firms from producing a generic equivalent of Daraprim. Of note, Daraprim sells in the United Kingdom for 66 cents.
    2. Valeant produces 12 of the 25 drugs that have increased most in price in the last two years, an average of 378 percent, and 27 of the 50 drugs that have had the largest price increases. These price increases came at the time it partnered with Pershing Square Capital to buy Allergan.
    3. Horizon Pharma bought Vimovo a brand-name arthritis drug from AstraZeneca. Because there is no generic alternative, Horizon Pharma was then able to raise Vimovo’s price sky high, in this case 1200 percent in under two years.
    4. Egalet Corporation increased the price of Sprix 500 percent after buying it from Luitpold Pharmaceuticals. Its investor materials reported that Sprix’ wholesale price went “from $185 to $942 for one box of five bottles.”
    5. After selling a majority share of Alvogen to Pamplona Capital Management, Macrodantin, Alvogen’s treatment for urinary tract infections, climbed 48 percent.
    6. The price of Dutoprol, a blood pressure drug, rose 1000 percent after a company owned by the private-equity firm, Cerberus, bought it from AstraZeneca.