Consumers and pharmacies take note about the recent rise in generic drug prices. According to Med-Page Today, a pharmacy in Pennsylvania reported a mark-up of the drug, digoxin, used in heart failure patients that went from $15 in 2013 to $120 in 2014. The price increase comes from the manufacturer of the drugs and not from the pharmacy. Unfortunately, digoxin is one of a kind and no substitute exists for the drug in some patients.
Dr. Aaron Kesselheim, the Director of the Program on Regulation, Therapeutics and Law at Brigham and Women’s Hospital in Boston, explains that generic drugs that normally cost pennies per dose recently faced drastic increases in price. Kesselheim provided the example of the commonly used antibiotic doxycycline that went from 6.3 cents to $3.36 per pill. Supply chain and manufacturing issues have created some of the generic drug price increases, but not the complete cause of the astronomical elevation in the prices. Dr. Kesselheim credits some of the increases to a limited number of manufacturers producing the generic form of these drugs. The low cost of generic drugs only comes when competition exists between produces of the generics. When competition decreases, the price of the drugs escalates as free market dictates.
In case of the generic drug, digoxin, the number of manufacturers fell from eight to three between 2002 and 2013 due to the Food and Drug Administration (FDA) safety-related medication recalls and inspections. The reduction in manufacturers caused the digoxin price to go up 637 percent. Other generic drugs went up in price from a short supplies of the raw material required to create them. Generic drug companies cannot speed up production right away because of the regulatory, medical and lawful constraints.
Other causes driving up costs relate to the taxes, fees and regulatory burdens imposed by legislature enactments. The first generic drug user fee agreement went into effect in 2012. The generic user fee increased the time it takes to approve generics drugs by the FDA.
The Obamacare prescription drug tax generates some of the increase in prescription drug costs with a direct tax on the manufacturers of the drugs and a direct tax on insurance and prescription drugs. The consumer gets hit with higher costs, because it trickles down from the maker of the drug to higher costs for the buyer of the drug product. Since the cost of premiums for Obamacare Insurance went up, the consumer may opt for a higher deductible. This means the patient pays more out of their own pocket. So consumers look for generic drugs. It pays to shop around and call pharmacies to check their prices, but it can be frustrating. Consumer Reports did a price comparison of over 200 pharmacies and found a big difference across pharmacies. The drug, atorvastatin (for high cholesterol) went from $17 at Costco to $150 at CVS; whereas, clopidogrel (to prevent blood clots) demonstrated a similar trend, costing $15 at a discount drugstore to $180 at a large chain.
Congress just this week met to discuss this issue of the large increases in the cost of generic medications. The Senate Subcommittee on Primary Health and Aging initiated a federal investigation into the practice of jacking up the prices of generic drugs. According to Senator Bernie Sanders, (an Independent from Vermont) the chairman of the subcommittee, millions of Americans depend on generic prescriptions to deal with their health conditions. One in four Americans fail to fill medication prescriptions because of the price being out of their reach. Reports from the Centers for Medicare and Medicaid Services, federal documents show almost 10 percent of generic drugs doubled in price and 1,215 generics increased in price by 448 percent from July 2013 to July 2014
This Subcommittee introduced a bill in the last 48 hours requiring generic drug companies to submit rebates to Medicaid when the price of the pharmaceuticals rises faster than the rate of inflation, but this action fails to help the many other consumers on Obamacare health plans with high deductibles for drug costs.
What can you do? Contact Senator Bernie Sanders or your congress person and voice your opinion.