Pace Alliance News
DRUG CO-PAYS FALL AS GENERIC USE INCREASES
Source: AP, April 17; Express Scripts; Bear Stearns & Co., Inc.
According to a report by Express Scripts, the average prescription drug copay in 2007 decreased for the first time in five years, dropping by 25 cents to $13.20. The report attributed the decrease to an increase in the number of customers who switched to generics. We would argue that the $0.25 drop in copay’s is not proportional to the increase in generic utilization. This implies that Express Scripts is not passing along the proportional cost savings on generics to customers through lower copays. It could b argued that a $10 to $15 copay for generic simvastatin (generic name for Zocor) or generic fluoxetine (generic name for Prozac) are at excessive levels. For example, a 30 day supply of simvastatin 10 mg is only $0.90 and fluoxetine 20 mg is only $0.45, providing a material profit margin on generic drugs. Express Scripts analysts found that 64% of claims filed in 2007 involved generic drugs, compared with 42% in 2002.
The report said that the average copay for preferred brand-name drugs increased by $4.52 to $19.18 between 2002 and 2007, and the average copay for nonpreferred brand-name products increased by $11.28 to $28.44 during the same period. By comparison, the average copay for generic drugs increased by 86 cents to $7.57. The report is available at www.express-scripts.com/industryresearch/industryreports/drugtrendreport/2007.
IMS HEALTH DATA SHOWS 6.4% INCREASE IN WORLDWIDE PRESCRIPTION DRUG SALES
Source: Pharmalot.com, April 15; Bear Stearns & Co., Inc.
IMS found that the US is still the largest single market at $286.5B, but with sales growth of 3.8% last year, it contributed only 25.5% of the total growth to the global market – the lowest-ever level of contribution. Asian markets (excluding Japan, but including Australia and New Zealand) grew collectively by 13.3% and now represent 11% of the total global market. China, South Korea and India grew by 25.7%, 10.7%, and 13%, respectively, in 2007.
FDA DEEMS GENERIC WELLBURTRIN XL TO BE SAFE
Source: Wall Street Journal, April 17, 2008
The Food and Drug Administration has completed its review of a generic form of antidepressant Wellbutrin XL, and it determined the medication is safe.
The generic, made by Impax Laboratories Inc. and distributed by Teva Pharmaceutical Industries Ltd., is considered a “safe and effective choice for consumers” and meets “all the requirements for approval,” the FDA said.
The FDA’s review came to light in October, following an independent study published by ConsumerLab.com, which showed the generic, marketed as Budeprion XL, dissolved much more rapidly than the branded drug. The study was prompted by hundreds of postings on the People’s Pharmacy Web site, in which people complained of side effects after switching to generic Budeprion XL from Wellbutrin XL.
In its review of therapeutic equivalence, the FDA said it re-examined both the data on bioequivalence of the two pills and what is known about the “natural history of depression.”
With respect to bioequivalence, the report said the “small differences” found in the drug’s peak blood concentration and average over time are within the FDA’s established limits. Although the time to maximum blood concentration was faster for the generic (two or three hours, compared with five to six hours for the brand) it was not considered clinically significant.
Further, the FDA suggested that the complaints could be linked to the fact that major depression can recur in people despite continued drug treatment.
BOYDA SAYS BILL ENCOURAGING GENERIC DRUGS WOULD BENEFIT TAXPAYERS
Source: Lawrence Journal World, July 25, 2007
A bill that would make Medicaid reimbursements for generic drugs more favorable for community pharmacies and protect Medicaid recipients was introduced Tuesday by congresswomen from Kansas and Missouri.
“I think this will be a good thing for the taxpayers,” U.S. Rep. Nancy Boyda, D-Kan., said during a teleconference.
Boyda and U.S. Rep. Jo Ann Emerson, R-Mo., put together the bill they say would fix flaws in the so-called “final rule” issued by the Centers for Medicare and Medicaid Services.
The bill would make retail costs the benchmark for determining Medicaid pharmacy reimbursements for generic drugs. Boyda and Emerson say their benchmark more accurately reflects pharmacy costs and would encourage use of generic drugs, which are cheaper than brand-name drugs.
Under the Boyda-Emerson bill, the reimbursement rate would be 150 percent of the median retail acquisition cost for the drugs.
The CMS rule uses a formula based on the average manufacturer price. The federal General Accountability Office found that under this rule pharmacies would be reimbursed for generic drug prescriptions at 36 percent below cost.
That finding was supported by the Office of Inspector General in the Department of Health and Human Services, said Charles Sewell, senior vice president for government affairs with the National Community Pharmacists Association. The CMS rule discourages the use of generic drugs, he said.
“About 75 percent of all the drugs out there have a generic equivalent, but Medicaid has one of the worst generic utilization rates — only about 65 percent,” Sewell said.
Critics of CMS say the rule will force many independent pharmacies in rural areas to stop taking Medicaid clients or go out of business. In rural areas, that would force those clients to travel long distances to other pharmacies or rely on mail-order prescriptions.
“It penalizes the pharmacies,” said Brian Caswell, owner of a pharmacy in the small southeastern Kansas town of Baxter Springs. About 50 percent of his customers are on Medicaid, he said.
Boyda said she thinks the CMS rule might be part of an effort to de-emphasize generic drugs and push people toward mail-order drug companies. Mail-order firms get their drugs at a reduced cost, she said.
“I’m not suggesting that mail-order be taken away, but what on earth is going on and why the rush and push to mail-order?” Boyda said.
The new Medicaid rule was mandated by the Federal Deficit Reduction Act of 2005. It is to be fully implemented by January.
It is not yet known how much the Boyda-Emerson proposal would save the federal government, but Sewell said he thinks it would be hundreds of millions of dollars.
Under Boyda-Emerson there could be a 6 percent to 7 percent increase in generic drug use, Sewell said. Every 1 percent move from brand-name to generic drugs would save about $300 million, he said.
The Boyda-Emerson bill so far has 30 co-sponsors, including lawmakers from both political parties, Boyda said.
