Generic Drug Prices, at times skyrocketing are now getting Senate Scrutiny


By Dr. Alan Kadish


Thursday November 20th, 2014 the Senate heard testimony reading some of the very concerning changes in the price of generics. We are no longer simply talking a few percent. How does +8,000% sound when it comes to a simple and long time generic, docxycylcine. In six-months the price rose from an average of $20 per bottle to $1,849 per bottle.

If that doesn’t take your breath away, albuterol sulfate, a common asthma inhaler that has been in the market place as a generic since 2007, went from an average of $11 per bottle in October 2013 to $434 per bottle in April. That’s an increase of greater than 4,000 percent, according to the Healthcare Supply Chain Association’s calculations. Now considering the number of asthmatics needing this emergency inhaler and multiply the price/reward for the generic manufacturer. Much more than over the top !

The industry response is that there are 12,000 generics and many are not being price hiked per the above examples. I take exception to these comments as it’s very clear when you’re on the front lines of health care and prescribing medications, especially those used for extended periods, that the price changes my patient’s have experienced are unbelievable and unfathomable. There is no new cost of manufacturing many of the older generics. The formulas and techniques are well known and for many very easy to duplicate although not necessarily mega block busters for profits.

This is simply a money grab overall. There has been a consolidation in the industry and price manipulation is now easier than ever. With that said there have been some ingredient shortages and occasional manufacturing problems, but not to the extent to warrant many thousands of percentage increases in pricing across a broad spectrum of prescriptions.

Last month, Sanders and House Rep. Rep. Elijah Cummings, D-Maryland, sent letters to the makers of 10 generic drugs that have seen price increases of over 300 percent or more in recent months. The increases cited by the Senate subcommittee were calculated by the Healthcare Supply Chain Association using the average prices of the drugs and other price data.

“If generic drug prices continue to rise then we are going to have people all over this country who are sick and need medicine and who simply will not be able to buy the medicine they need,” Vermont Sen. Bernie Sanders, who chairs the Senate Subcommittee on Primary Health and Aging. Senator Sanders is an interesting guy having a very different attitude toward a number of subjects. You might want to explore the above link.

Sanders introduced a bill that would require generic drugmakers to pay rebates to the federal Medicare and Medicaid programs when prices of their medications outpace inflation. Those payments are already mandatory for branded drugs, but have never applied to generics.This would be a unique new means of reigning in the upswing of pricing, but many not be adequate to reduce the price of the now grossly inflated generics in circulation.

An analysis of 280 common generic drugs by Professor Stephen Schondelmeyer found that roughly a third recorded prices increases in 2013. The University of Minnesota researcher said those numbers show that generic price increases are not limited to a few isolated cases.

“The markets are broken and we need to do something to fix it,” he told the panel. “I think the government needs to step in and develop and monitor solutions.”

Dr. Aaron Kesselheim of Harvard Medical School recommended several new government policies, including allowing the Food and Drug Administration to accelerate the clearance of generic drugs for which there are few manufacturers. He also said that federal officials should be notified of all drug price increases greater than 100 percent. The FDA has the power to approv emergency imports of extra supplies, from foreign sources, if a drug shortage occurs.

The major consideration should reflect that fact that generic drugs account for approximately 85 percent of all medicines dispensed in the U.S., according to IMS Health. 

Thursday’s hearing followed requests for congressional action by the National Community Pharmacists Association, which says independent pharmacies are being squeezed by the price hikes. In some cases, pharmacists are losing money on drugs that are purchased at new inflated  prices , while being reimbursed at the older, lower rates by pharmacy benefit managers. You might look at the previous listings for $4 and $10 medications, at the major pharmacies. This includes the largest pharmacy Walgreens. This lifeline for many patients is quickly eroding and will cause more negative health related issues as the population increases and grows older.

It’s interesting that at a time when millions of more individuals are required to have health insurance the prices for medications are soaring. I see no small coincidence.

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Dr. Kadish is an unusual physician often referred to as a "doctor detective". His expertise is the evaluation and treatment of complex disorders, typically after other physicians have been stumped, is renowned. He provides care for all family members and has additional training in autistic spectrum disorders and chronic complex diseases.