Generic Price Competition Ineffective in Reducing Oral Anticancer Therapy Cost?
The cost savings for a generic version of an orally administered cancer treatment was less than expected.
The cost savings for a generic version of an orally administered cancer treatment was less than expected, according to a study led by investigators at the University of North Carolina (UNC) Eshelman School of Pharmacy and Lineberger Comprehensive Cancer Center.1
The study, published in JAMA, compared the cost of the generic and brand-name versions of capecitabine, a high-priced chemotherapy treatment. Despite rapid uptake of the drug, the investigators found that the observed decrease in price was lower than expected, compared with reductions seen in other generic drugs.
The researchers reported that capecitabine was one of the first high-priced, orally administered cancer treatments to lose patent protection in the United States. By using the drug as a case study for the potential impact of generic competition on orally administered cancer treatments, the investigators found that reductions in the list prices were more modest than those seen in other drugs with the same amount of generic market competition. The findings indicate that generic price competition may be insufficient to contain prices for these generic medications.
“For this oral cancer treatment, we don’t see the level of price reduction that we would expect for generic drug entry,” Stacie Dusetzina, PhD, the study’s senior author and an assistant professor at the UNC Eshelman School of Pharmacy, said in a statement.2 Generic capecitabine’s cost for 1 fill was $2328 last year, which, according to the investigators, was just 36% lower than the projected price for the brand-name product for 2016.
Using commercial insurance claims data, the investigators estimated the prescription price for capecitabine and its generic version between 2002 and 2016. In 2014, the price of the generic capecitabine for a standard 1-month supply averaged $2598, which was 17% below the brand-name price. The price dropped to $2328, which was 36% below the brand-name price, by 2016. The authors noted that these findings demonstrated only a modest price reduction and that other studies have determined greater savings for generic entry into markets with a similar number of competitors.
Notably, the researchers found that as brand-name drug prices increased over time, generic costs followed. Generic capecitabine’s price in 2016 was similar to the list price of the brand name in 2010 and 70% higher than the brand-name drug’s list price in 2002.
Most of the patients in the study had lower out-of-pocket costs after generic entry, but 10% of patients paid more than $100 for 1 fill of medication.
The findings suggest that even after a drug’s generic entry, patients may not have easier access to oncology treatments, as previously thought, especially if the price paid by health plans remains higher than the brand name’s original list price.
“There’s an ongoing national conversation around prescription drug prices, particularly specialty drugs, like those used in oncology,” Ashley Cole, MPH, the study’s author and a doctoral student and graduate research assistant at the UNC Eshelman School of Pharmacy, said in a statement.2 “Some have suggested that generic price competition will be a market-based solution to this problem. Our study provides early evidence that generic competition alone may not be enough to rein in the high prices for orally administered cancer therapies.”
1. Cole AL, Sanoff HK, Dusetzina SB. Possible insufficiency of generic price competition to contain prices for orally administered anticancer therapies. JAMA Intern Med. September 2017. doi:10.1001/jamainternmed.2017.2788.
2. Savings less than expected for generic oral therapy [news release]. Chapel Hill, NC: UNC Lineberger; September 11, 2017. unclineberger.org/news/savings-less-than-expected. Accessed September 28, 2017.