The Value of Generic Drugs to Hospitals

James C. McAllister III, MS, FASHP
Published Online: Monday, November 1, 2004
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I have had the pleasure of participating in roundtable discussions at 2 conferences sponsored by the Generic Pharmaceutical Association (GPhA) this year. Like most of you, my focus has been on the increasing cost of drugs, largely driven by increased utilization of expensive drugs and innovative products. Preparing for my participation in these meetings and interacting with those in attendance has elevated my dormant appreciation for the evolution of the generic drug industry and the value it brings to hospital pharmacy.

When I entered the profession, the availability of generic drugs was limited, the manufacturers were not well known, and the quality of the generic products was suspect. Pharmacists invested considerable time investigating a generic drug's bioavailability before they purchased it. Sure enough, in pursuit of "profit," some generic drugs entered the marketplace that were clearly substandard and gave the whole industry a black eye. Trust in product quality waned among pharmacists, physicians, and most importantly patients.

Increased vigilance by regulators and pharmacists?coupled with the resolve of generic manufacturers, which tended to be leaders with a sustained presence in the marketplace? have increased the reliability of product quality for most generic manufacturers. Once the quality issue was resolved to my satisfaction, I shifted my attention to drugs manufactured by big pharma companies and let my interest in generic drugs fade significantly.

I have gained an appreciation for the legislative and regulatory reform that has enabled the growth of this segment of the industry. Reforms have created a competitive interest in getting generic drugs to market as soon as the original patent expires, thus reducing acquisition cost dramatically. Legal challenges continue between the patent holder and potential generic manufacturers, but the generic drug industry has been increasingly committed to staying the course and bringing new generic drugs to market.

Pending legislation and regulations, at both state and federal levels, have potential (good and bad) implications for the generic drug industry and hospital pharmacy. We need to encourage our state and national professional associations to remain vigilant and proactive regarding potential changes, and to align with the GPhA as appropriate.

The value generic drugs bring to hospital pharmacy goes beyond reducing drug costs without compromising quality. Generic manufacturers are much more likely to respond to our needs for unit-dose packages with bar codes. Because new regulations require bar codes on all packages, many manufacturers that are patent holders appear to be reducing or eliminating product availability in unit-dose packages. Generic manufacturers also should be able to ensure consistent product availability.

Generic manufacturers should elevate their presence in hospitals and remind us of their value. Expanding product portfolios, including those in compliant unit-dose packages, will increase their value considerably. Innovations in packaging for oral solids, oral liquids, and parenterals also will be received well, because they will enable hospital pharmacies to allocate human resources more efficiently.

Finally, generic manufacturers need to remind us that "newer isn't always better" when a patent expires and new therapeutic duplicates are introduced at higher prices than the established (now multisource) drug. Most importantly, generic manufacturers need to sustain their commitment to quality and bioequivalence, and to police themselves to ensure that they maintain their positive image.

Hospital pharmacists should make an effort to embrace generic manufacturers and maximize purchases of all packages. We should encourage packaging innovation and communicate our needs. Enduring expanded relationships with generic manufacturers are a win for patients, hospital pharmacies, and the health care system.



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