Among consumers, the chief complaint about pharmaceuticals is cost. But when consumers identify as patients, they are grateful for the widespread availability of life-saving and life-enhancing medications. One way that consumers have traditionally balanced their role as patients looking for the best treatment options with their needs as budget-conscious consumers trying to rein in their healthcare spending, is by buying generic drugs instead of brand drugs. In fact, 86% of all prescriptions filled in the U.S. are for generic drugs, according to the IMS.
That’s why the sudden, steep increase in generic drug prices, including the cost of medications such as captopril, digoxin, clomiramine, levothyroxine, and generic prednisolone, have caused consternation among patients, pharmacists, and even prescribing physicians.
A perfect storm
The prevailing theory about the dramatic increase in generic drug prices is that there is no one cause, but rather a combination of factors. According to this line of reasoning, the generic drug prices we are seeing now are the result of a perfect storm—drug shortages, manufacturing glitches, drug recalls, supply disruptions, consolidation of the generic drug industr,y and numerous bans on drugs imported from manufacturing facilities in India—as BioPharma Dive reported last week.
Leigh Purvis, Director, Health Services Research, AARP Public Policy Institute, concedes that many of these issues may be contributing to higher generic drug prices. However, she says, “The problem is that it’s very difficult to determine exactly what’s driving manufacturers to increase prices or if it’s simply a case of 'because they can.'"
In a public statement regarding increased generic drug costs, Ralph G. Neas, president and CEO of the Generic Pharmaceutical Association (GPhA), expressed his organization’s “disappointment” over how some have “mischaracterized the facts about generic drug prices.”
According to Neas, one thing is missing—perspective. He notes that the example used by the Healthcare Supply Chain Association on recent purchases by group-purchasing organizations only focuses on 10 drugs, although there are more than 12,000 approved generic drugs available to consumers.
In addition to citing cost-saving figures associated with consumers using generic drugs instead of brand-name medications—generics saved $239 million in 2013, a 14% increase over 2012—Neas also noted that the cost of many generics has actually decreased, including generic Lipitor (atorvastatin).
This is an issue that affects individuals
Purvis makes it clear that the AARP and the GphA are aligned in many ways. She explains, “AARP is fully supportive of generic drugs, but if there is even one person who cannot access one drug, it is a problem. Our members are not concerned about the overall landscape when they have to confront inexplicable prices increases of as much as 10,000% or more. Now many people are simply gong without their medications, which can lead to more expensive health costs down the line.”
And looking at the numbers, it is clear that price increases are not limited to a handful of generic drugs. Overall, half of all generic drugs have increased in price and 10% have at least doubled in price. And then there is the issue of which drugs are becoming out of reach and which diseases they are intended to treat.
Captopril, for example, has traditionally been an affordable option for treating hypertension—a condition that affects one third of all people in the U.S. and 42% of black adults. According to figures from the CDC, overall hypertension is well controlled, with an 82% level of awareness and a 76% treatment rate; however, the problem of uncontrolled hypertension continues to disproportionately affect communities of color. Higher priced generics are not helping the situation at all.
AARP and GPhA agree on many possible solutions to this problem. GPhA supports increasing competition in the generic drug industry, bolstered by changes in the FDA approval process to move the 3,300 generic drugs that have already been filed more rapidly through the review chain. Neas and his colleagues also support REMS reform, which could save $5.4 billion, according to a study by the Matrix Global Advisors.
Purvis agrees. “The goal is to find the balance between making sure that people have the access they need to their medications, while still supporting the viability of the pharmaceutical industry.”