Some generic drugs not cheap anymore

Some generic drugs not cheap anymore
May 10 01:00 2014

Some generic drugs not cheap anymore

Pharmacist Larry Cowan can flip through his records and spot the generic drugs that have taken big price jumps in the past year or so.

There’s digoxin, a heart medicine that he used to buy for pennies a pill. 

 “Now the price is close to 10 times that,” said Cowan, owner of Glenview Professional Pharmacy in Richland Hills, Texas. 

 There’s doxycycline, a decades-old antibiotic that went on the Food and Drug Administration’s shortage list in 2012 and became the symbol of generic price spikes. Cowan said a tablet of doxycycline went from about 6 cents in late 2012 to $3.65 in late 2013, about a 6,000 percent increase.

Another drug, captopril, a high-blood-pressure medication, went from 2 cents to

79 cents each in the same period, he said.

While the FDA in the past month removed doxycycline from its shortage list, it still costs U.S. pharmacies an average of $3 a tablet, according to a weekly survey conducted for the federal Centers for Medicare and Medicaid Services. The same survey puts the average cost of digoxin at $1.08 for a 0.125 mg pill, a common dosage.

“For many years, generics went down and down,” said Joe Harmison, owner of DFW Prescriptions in Grand Prairie, Texas.

“Within the last six to

12 months, they’ve been going up, some really drastically,” Harmison said.

Factors behind the unusual price spikes, experts say, include a wave of industry mergers and decisions by some manufacturers to stop making certain drugs.

Not every generic drug that Americans take has become more expensive. Most have not.

On average, the price of generics — medicines that are not protected by a patent and can be produced by FDA-licensed manufacturers — declined

15.9 percent last year, said Express Scripts, a big prescription-management firm. Prices on brand-name drugs rose

13.9 percent. Both are years-long trends.

In all, U.S. spending on medicines rose 3.2 percent in 2013, Express Scripps said.

Dublin-based Cardinal Health has seen “some generic manufacturer price increases on a relatively small basket of products,” Chief Financial Officer Jeff Henderson said recently.

Cardinal has announced a venture with CVS Caremark, its largest customer, to buy generic drugs worldwide to sell in the U.S. market. This partnership, expected to be up and running in early July, will be called Red Oak Sourcing.

Another analysis of the CMS data, by Pembroke Consulting, found that from November 2012 to November 2013, two-thirds of the 16,000 generic drugs and dosages declined in price while a third rose. Six percent more than doubled, and a dozen increased by 20 times or more.

All 12 of the biggest gainers were various forms or dosages of just four drugs, led by doxycycline. The others were albuterol, used in asthma inhalers; clomipramine, a 1960s-era antidepressant; and captopril.

“Drug shortages appear to be the primary culprit,” Pembroke President Adam Fein wrote at the time.

David Whitrap, director of corporate communications at Express Scripts, said the price increases “for a handful of generic medications” were due largely to “natural market factors, including shortages of active ingredients and a reduction in the number of manufacturers.”

“The market tends to correct itself when instances like this occur,” Whitrap said.

Most analysts don’t think the Affordable Care Act has played much of a role in the higher costs of some generic drugs.

“There tends to be a strong relationship between shortages and pricing. I haven’t heard that ACA has exacerbated shortages,” said Jenna Stento, a senior manager of Avalere Health, a consultancy.

Marv Shepherd, professor of pharmacy at the University of Texas, agreed.

“The Obama program has increased demand somewhat, but I don’t think that’s the main reason,” he said. What’s more important is the number of competitors making a drug.

Those numbers have fallen for two main reasons, Shepherd said. One is that manufacturers have abandoned some markets when they’re not profitable enough. The other is that two former competitors merged.

“At one point, 12 companies made doxycycline” for sale in the United States, Shepherd said. “The managed-care companies are only going to buy the cheapest one, since there’s no difference in the active drug. So some firms end up getting out of the business and, when they do, the number of suppliers decreases.”

In 2012, Teva Pharmaceutical Industries, by most counts the world’s biggest generic-drug maker, told the FDA it intended to stop selling doxycycline in the U.S., a notice required by the agency. It dropped the drug, in use since the 1960s, in 2013.

Even if a price jump makes the drug more attractive to manufacturers, it’s not as easy as firing up a production line “and popping out more M&M’s,” Shepherd said. Makers “have to get FDA approval to market a drug,” and that can take six months or more, he said.

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