Generic Antiretrovirals Lower Government Cost of HIV and AIDS Treatment

Published Online: Wednesday, August 29, 2012
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An FDA process allowing rapid approval of generic drugs is the main reason for a decrease in the government portion of antiretroviral HIV treatment costs, according to a study published in the July 2012 edition of Health Affairs.

According to the study, which National Public Radio’s (NPR’s) Shots blog detailed on July 13, 2012, the treatment dispensed in hard-hit countries comes from generic versions of previously expensive brand name drugs. The President’s Emergency Plan for AIDS Relief (PEPFAR) pays for a significant portion of the medication. By September 2011, PEPFAR helped 13 million people receive HIV- and AIDS-related care and 3.9 million people receive antiretroviral treatment worldwide.

According to the study, the lack of a licensing process for generic medications impeded access to the drugs during the early years of the program. That changed in 2004, when the FDA approved a process expediting the approval of generic drugs.

Since 2004, more than 140 generic versions of antiretroviral medications have been offered through PEPFAR. The government’s cost dropped from $1100 annually per person in 2004 to $335 annually per person in 2012. The drop has allowed the government to offer medications to millions of people who would not have otherwise had treatment, the study authors told NPR. Approximately 70% of the antiretroviral treatments in the 15 countries PEPFAR targets use generic drugs.

Although the study notes the success and cost reductions associated with generic medications, lead study author Kartik Venkatesh, PhD, told Shots that the future for generics is unclear. He attributed that conclusion to restrictions imposed by the World Trade Organization regarding reproduction of patented formulas. In addition, changes that occurred during the past decade slowed the advancement of generic versions of second- and third-generation antiretroviral drugs, he added. The second- and third-generation medications can be used if a patient develops a resistance to first-line treatments.

President Obama’s 2011 commitment to provide antiretrovirals to 6 million people worldwide by 2013 will depend on keeping drug prices low—which underscores the importance of new generics, NPR reported.

“Making the drugs available earlier leads to a better clinical outcome for the individual and lowers the transmission risk for their partner,” Dr. Venkatesth told NPR. “So it also gives us [the] chance to potentially curb the epidemic.”

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Today Reps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa) introduced H.R. 5815, The Generic Drug Pricing Fairness Act, which creates greater transparency in how pharmacy benefit managers reimburse pharmacies for generic prescription drugs under Medicare Part D, and the Federal Employees Health Benefits Program. The National Community Pharmacists Association endorsed the bill, which goes further than legislation the same two Congressmen introduced earlier year that has the same remedies, but only applied to Medicare Part D.
“GPhA applauds FDA for taking helpful steps to address, and hopefully limit, scenarios in which some brand drug companies misuse Risk Evaluation and Mitigation Strategies programs to thwart competition from more affordable generic drugs. The ongoing abuse of REMS and REMS-like programs costs the American health system and its patients $5.4 billion annually, according to a study conducted by Matrix Global Advisors. Interestingly, as the United States market readies for biosimilars, this same study identifies $140 million in lost savings that would occur for every $1 billion in biologics sales.
Generics saved $239 billion in 2013 (a 14% increase in savings from 2012) and more than $1.46 trillion over the recent decade. Further, the Express Scripts 2013 Drug Trend Report issued in 2014 shows that since 2008, the price of brand drugs has almost doubled, but the price of generic drugs has been cut roughly in half.
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