I am often shocked when patients tell me how much they paid (or were asked to pay) for a medication I prescribed. I am especially surprised, because I make a point of writing for generic medication, rather than more expensive brand medication. Generic medications are versions of a brand drug which the Federal Drug Administration (FDA) deems equivalent to the original brand medication.
So, I was happy to read a recent article in the Journal of the American Medical Association which reviewed why medications in the USA are so expensive. (Sesselim, Avorn and Sarpatwari: The high cost of prescription drugs in the United States. JAMA 2016: 316(8): 858-871).
This is what I learned:
- Legal protection from competition: Once the FDA approves a medication, the pharmaceutical company has 5-7 years of exclusivity before a generic competitor can be sold. Biologic drugs have 12 years.
- Patents on a medication can extend for 20 years.
- Competition between two or more brand names do not decrease the price. Competition between brand drugs and generics do decrease the price. The more generics present in the market for a specific medication, the lower the cost of the medication.
- The entry of generic medication into the market is often delayed due to:
- Product life-cycle management—Additional patents on a drug (that may be unrelated to the medication’s active ingredient) extends the life of the brand drug against generic competition.
- Pay for delay: A potential generic manufacturer receives payment to delay bringing out the generic medication to market. A striking example is when Bayer paid $398 million to delay generic ciprofloxacin from coming to market.
- The back-log at the FDA can be up to 3-4 years before approval of a generic medication.
- Prices are justified by the high cost of drug development, but there is no proven association between research and development costs and the prices of medication. Prices in the USA are based primarily on what the market will bear.
- Federal law prevents negotiations for drug prices, but government payers must provide coverage for most medications. This was incorporated into setting up of Medicare Part D, the Medicare plan for prescription drug coverage.
- Private plans shift costs to patients by increasing deductibles and co-payments for patients.
- Up to 25% of patients do not fill a prescription due to cost.
- There is better compliance when less expensive generic drugs are prescribed compared to more expensive brand medications.
- Coupons for drugs may help the patient, but forces the insurer to pay the higher fee of the brand drug. This drives overall insurance costs up. These coupons are also not available to Medicare or Public Aid patients who often need the financial assistance the coupons offer.
- Generics are often too expensive:
- Colchicine, an old standard medication for gout and used in dermatology for a variety of inflammatory conditions, has recently increased 5000% making it difficult to prescribe.
- A 63-year-old medication for an unusual infection called toxoplasmosis increased from $13.50 to $750.00 for each pill.
- My colleagues and I have seen basic generic prescription topical medications (e.g. clobetasol ointment, cream, and solution) and pills (e.g. doxycycline) that have been available for over 40 years, and were “pennies” several years ago, become expensive medications and unaffordable to most patients.
What you can do:
- Always ask your health care provider for a less expensive generic medication. If your provider wants to give you a brand drug, have him/her explain why that brand drug is preferred over a generic medication if one exists.
- When choosing a Medicare plan, go to Medicare.gov and compare plan costs for the medications you currently take. Do this each year. Your medications may change from year to year and the medication coverage that the plans offer change year to year.
- If you are given a more expensive brand medication, ask your provider or look online for a coupon from the pharmaceutical company to minimize your out of pocket cost. Unfortunately, these coupons are only good for commercially insured patients, and are not usually valid for Medicare and Public Aid patients. While these coupons help the patient and the pharmaceutical companies, they force the insurer to pay the higher fee of the brand drug, driving up the overall costs of health insurance.
- Online sites such GoodRx.com are extremely helpful to find the lowest price for your medication in your area. It is surprising to frequently find one pharmacy selling the same medication at more than twice the price of another. GoodRx provides coupons for reduced prices on both generic and brand medications. Their app is works well, compares prices, and gives directions to the pharmacy you want to use. It is available for both Androids and iPhones.
- While tempting, I strongly advise against ordering your medications from online drug sites such as CanadaDrugsOnline.com, BestPriceRx.com, and IsraelPharm.com. The medications you are buying may be fraudulent. The production may not be monitored by an accepted regulatory agency and may not have the active ingredients you expect. It is also illegal under federal law to import medication into the United States from abroad. However, the State of Maine allows its citizens to go to Canada and buy medications at a cheaper price from a legitimate pharmacy. This is different than buying from an unregulated online pharmacy.
- Write your representatives in Congress and the Senate to sponsor legislation to allow federal agencies such as Medicare to negotiate for the best price for medication. When Congress established the Medicare plan for prescription drug coverage (Part D), it banned federal payers such as Medicare from negotiating for the best prices.
Harry Goldin, M.D.