Generic News

Published Online: Monday, April 18, 2011
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DAW Scripts a Drain on Health Care Dollars

Instructing pharmacists to “dispense as written” (DAW) is a prescription for high health care costs, according to new research conducted at Harvard University and Brigham and Women’s Hospital and funded by CVS Caremark.

The practice, which prevents pharmacists from substituting a branded drug with its generic equivalent, costs the health care system up to $7.7 billion annually, researchers wrote in a report published in the April issue of the American Journal of Medicine. It also increases the chances a prescription will go unfilled by patients with long-term illnesses.

For the study, “The Consequences of Requesting ‘Dispense as Written,’” senior author William Shrank, MD, of Harvard Medical School and Brigham and Women’s Hospital, and colleagues reviewed a total of 5.6 million prescriptions, 4.7% of which were inscribed with the DAW mandate.

Their results showed that when chronically ill patients are prescribed initial treatments, they “disproportionately fail to purchase these prescriptions when either physicians or patients request dispense as written.” They added that eliminating DAW as an option could reduce health system costs by up to $7.7 billion and patient costs by $1.2 billion.

A policy discouraging physicians from making unnecessary DAW requests could yield indirect savings by preventing costly complications that are often the result of primary nonadherence. Previous research has shown that patients are more likely to adhere when initially treated with generic or low-cost medications, the report’s authors noted.

“Although dispense as written requests would seem to reflect a conscious decision by patients or their physicians to use a specific agent,” the researchers wrote, “the increased costsharing that results from a dispense as written designation may decrease the likelihood that patients actually fill their prescriptions.”

Faced With Patent Cliff, Drug Makers Hike Prices

Although broader use of generics promises savings over time, new evidence suggests the drugs’ entry to market may actually increase the amount patients pay for their prescriptions in the short term.

Data released in March 2011 by Thomson Reuters MarketScan showed that prices for top-selling branded drugs rose at a much faster pace in 2010 than in the past 5 years. For nearly two-thirds of the drugs included in the report, the average per-dose cost increased by more than 10%.

Analysts say the skyrocketing drug costs are a symptom of the impending “patent cliff”—a term that describes the near-simultaneous end to market exclusivity for a number of lucrative drugs that is expected to occur in 2011 and 2012.

Nancy Stalker, vice president for pharmacy services at the health plan Blue Shield of California, told Reuters that “because of the increased number of drugs going generic, they profit more from the brand drugs on the market by increasing prices.”

The patent cliff will eventually make way for generic alternatives and generate more than $70 billion in savings over the next 4 years, according to IMS Health. Plavix, Singulair, and Seroquel are among the drugs that will begin to face generic competition during that period.

In the meantime, however, patients have little choice but to fork over the cash for drugs such as Lipitor, which is expected to lose patent protection in June 2011. The cost of the drug rose 11.4% in 2010—more than twice its annual rate of increase from 2005 to 2010—reaching an average per-dose cost of $3.53.

Mylan Site Encourages Patients to Go Generic

Despite strict FDA regulations that govern the safety and quality of generic medications, many patients hold fast to the notion that branded drugs are superior to their generic counterparts. This persistent misconception is the target of a new educational Web site, www.ChoosingGenerics.com, launched in March by the generic drug maker Mylan.

The site aims to boost generic use by empowering patients to “learn, choose, and act.” It provides detailed information about the bioequivalence, large- and small-scale savings potential, and availability of generic drugs, as well as downloadable resources pharmacists can use to supplement patient counseling sessions.

Recognizing the role of pharmacists as “generic ambassadors,” the site encourages patients to engage with their local pharmacists to learn more about generic alternatives to the medications they currently take. To facilitate these conversations, a worksheet recommends questions patients should ask their pharmacist.

Mylan President Heather Bresch hopes the tool will help patients understand the financial impact of their decisions when it comes to prescription drugs. “While the debate over health care reform continues,” she said, “one of the only proven solutions for controlling the rise of health care costs is generic pharmaceuticals.”

Medicaid Underutilizes Generics, Generates Waste

Medicaid wastes an average of $95 per prescription by failing to use generic drugs where possible, according to a new study by American Enterprise Institute economist Alex Brill. The excess payments—attributed to just a handful of multi-source medications— set states back an estimated $329 million in 2009, Brill reported.

In the working paper “Overspending on Multi-Source Drugs in Medicaid,” Brill urged policymakers to address waste in Medicaid drug programs, and quickly. The strain of excess spending on state and federal budgets is only expected to increase as Medicaid enrolls an additional 16 million beneficiaries by 2019, he noted.

To determine the extent of the problem, Brill examined Medicaid data on 20 popular multisource drugs for which sales of branded drugs were “significant” compared with their generic alternatives. He found that in 2009, Medicaid spent a total of $1.5 billion on drugs that could have been purchased for 22% less. The resulting waste totaled $329 million—85% of which was attributed to just 8 products.

The average generic prescribing rate was 81% in 2009; however, rates were lower than 80% for 9 of the 20 drugs included in the study. Although most states have policies intended to favor generics, exceptions to these rules are common and too often result in lower generic substitution rates, according to the report.

Lowering copayments for generics, limiting the number of brand products patients are allowed, and eliminating “dispense as written” exceptions are the types of policy changes Brill says must be implemented to reduce or eliminate Medicaid waste going forward.

Responding to the analysis, the Generic Pharmaceutical Association echoed Brill’s call to action, adding that “Additional savings are there for the taking if regulations governing Medicaid encourage, rather than impede, the dispensing of FDA approved generic prescription drugs.”

Senators Push For Speedier Access to Generic Lipitor

A group of senators pressured FDA officials last month to resolve regulatory hurdles that could block timely access to multiple generic versions of top-selling drugs. At the heart of the senators’ argument is Lipitor, for which the government pays an annual total of $2.54 billion through Medicaid, Medicare Part D, and Veterans Affairs programs.

In a letter issued March 9, 2011, to FDA Commissioner Margaret Hamburg, MD, Senators Jay Rockefeller (D, WV), Tom Harkin (D, IA), Charles Schumer (D, NY), Debbie Stabenow (D, MI), and Sherrod Brown (D, OH) wrote that they are “concerned that current regulatory circumstances” could significantly delay generic competition for the blockbuster drug.

The Food, Drug, and Cosmetics Act (FDC), which governs market exclusivity for generic versions of branded drugs, was amended in 2003 in order to “prevent a first filer’s exclusivity from being indefinitely ‘parked,’” the senators explained. However, because some abbreviated new drug applications for generic atorvastatin were filed before that date, Lipitor may be an exception.

“It appears that with respect to Lipitor, some filings that predate those amendments to the FDC may be poised to delay the introduction of generic atorvastatin into the marketplace without a timely determination from FDA,” the senators wrote. “Given the tremendous savings that access to generic atorvastatin will afford both consumers and the government, we urge you to act in the near future to help clarify the relevant regulatory issues in this matter.”

Camber Pharmaceuticals Appoints New President

Konstantin Ostaficiuk, former vice president of sales and marketing at Camber Pharmaceuticals, accepted a new role as president of the company, Camber announced in March. Ostaficiuk brings 25 years of generics industry experience to the position, which was previously held by Briggs Arrington, founding president of Camber.

Hetero Drugs, Camber’s India-based parent company, expressed “great confidence” in Ostaficiuk to pilot its US subsidiary. “Camber and Hetero have a very robust product line,” Ostaficiuk said, “and will continue to introduce and launch significant new products to our current portfolio in the remainder of 2011, 2012, and into the future.”

Primed for growth, Camber recently opened a 60,000-square-f t office and distribution facility in Piscataway, New Jersey. Ostaficiuk called the new location “absolutely vital” to Camber’s expansion, adding that “Our new facility will allow us to add the staff and resources necessary to maximize efficiencies and improve logistics to make Camber more competitive than ever before.” PT 



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