The Role of Cost in the Branded vs. Generic EQUATION
Choices are often driven by financial considerations — for both patients and physicians
Escalating drug costs have been big news lately, but they are not news to physicians challenged every day to treat patients within the realm of their ability to afford medications. Many practices have procedures in place to connect patients with financial help, whether that means a sample, a coupon, or a larger program. In addition to this assistance, when physicians strongly recommend a branded medication, they often have to spend time justifying their choice with payers and pharmacies.
Taken together, the financial strains of prescribing and filling medications create a very frustrating picture. From patients’ out-of-pocket expenses to physicians’ unpaid time interacting with payers and pharmacies, cost is a constant challenge for all involved.
The Cost to Patients
By necessity, doctors are very aware of the prices of drugs they commonly prescribe, following both branded and generic drugs through price changes that do not always follow a predictable logic. Generic drugs are not always cheaper, and any drug price can increase dramatically, often for unexplained reasons.
Eric D. Donnenfeld, MD, FAAO, of Ophthalmic Consultants of Long Island in N.Y., points out that while doctors have learned that generics are not always cheaper than branded medications, patients are still making that very understandable assumption. “Patients often aren’t aware that generics can be more expensive; so, they’re happy to hear that some branded medications that are of better quality and are easier to use may actually cost less,” he says.
Nevertheless, Dr. Donnenfeld has to be prepared for patients who still can’t afford their prescriptions. He and his staff are closely involved with ensuring that patients get the medications they need, despite financial barriers that may exist. Although many practices are succeeding in this goal, their success is not without its frustrations.
“When drugs present a significant financial decision for my patients, I have to be aware of that and have a discussion. There are often coupons available, samples to arrange, or we can call the pharmaceutical company for patients who are truly indigent,” Dr. Donnenfeld says.
Utilizing pharmacy apps is another way to help patients who need financial assistance. For example, GoodRx, a free, IOS- and Android-based app, compares drug prices at local pharmacies and offers printable coupons to help offset the price of certain medications.
Like many physicians, Mitchell A. Jackson, MD, of Jackson Eye in Lake Villa, Ill., helps patients navigate medication payment issues related to Medicare Part D. “Companies are trying creative ways to improve access at better costs,” he explains. “Patients can opt out of coverage of a specific drug, such as Lotemax (loteprednol etabonate ophthalmic suspension 0.5%, Bausch + Lomb) or Prolensa (bromfenac ophthalmic solution 0.07%, Bausch + Lomb), use a coupon card from Bausch + Lomb and pay out of pocket.”
Dr. Donnenfeld says that to ensure patients get the medications they need, he relies on an excellent staff.
“Staff understand that we are not done serving patients until they have their medications, and they want to take extra steps to help. They find ways to help patients buy branded medications affordably,” says Dr. Donnenfeld. “The alternative is to always prescribe generics and hope there isn’t a complication. But I’d rather invest the staff time to find financial programs.”
The Cost to Physicians
Patients aren’t the only ones feeling the financial pinch in today’s environment. When physicians think that branded medications are the best choice for their patients, they often must battle with pharmacies as well as payers to get those drugs for their patients. This frustrating — and often time-consuming — process can serve as a deterrent to prescribing certain branded medications. “I can prescribe some branded medications, such as Xalatan (latanoprost, Pfizer), without much problem, but when I need to go farther for patients whose glaucoma is marginally controlled, I encounter a great deal of pushback,” explains Michael Harris, MD, of Livingston Eye Associates in Livingston, N.J. “When I prescribe Lumigan (bimatoprost ophthalmic solution 0.01%, Allergan), which works on two receptors to help marginally controlled patients, I know that I am setting myself up for a major time commitment pushing for the pharmacy to accept my recommendation.”
GAO Report: Ophthalmic Drug Price Hikes Outpace Other Generics
At the request of Congress, the United States Government Accountability Office (GAO) delivered a report on the cost of generic drugs covered under Medicare Part D. Published this summer, the report found that generic drug prices declined 59% between the start of 2010 and the end of 2015. Retail prices for generic drugs are about 75% to 90% lower than branded drugs.
However, in the same period, the GAO also found that among 2,378 drugs, 1,441 of which were on the market for the full length of the study, 315 generic drugs had what it described as “an extraordinary price increase — a price increase of at least 100% — while many other generic drugs continued to decline in price.” This concerns those charged with reducing the overall costs of healthcare and of Medicare in particular because, as the GAO pointed out, 84% of Medicare Part D prescriptions in 2013 were generic.
The GAO broke down the drugs by route of administration, including the ophthalmic route. Among the 315 drugs that increased in price, about 3% were ophthalmic. Ophthalmic drugs made up 18% of those whose prices shot up between 2010 and 2011, and through the full 6-year duration, 40% percent of generic ophthalmic drugs covered by Medicare Part D showed an “extraordinary price increase.”
The comprehensive list includes the following medications, some of which are listed in multiple concentrations:
• Atropine sulfate
• Cyclopentolate hydrochloride
• Dexamethasone neomycin sulfate polymyxin B sulfate
• Fluorometholone
• Gentamicin sulfate
• Gramicidin neomycin sulfate polymyxin B sulfate
• Levobunolol hydrochloride
• Ofloxacin
• Pilocarpine hydrochloride
• Prednisolone acetate
• Sulfacetamide sodium
• Timolol maleate
• Tobramycin
• Tropicamide
Once prices rose for these 315 drugs, few declined. The GAO offers an example of the glaucoma drug methazolamide (50mg tablet, oral) whose price jumped from about $0.33 per tablet at the start of 2010 to $1.85 per tablet one year later. In 2015 the drug cost $5.47 per tablet, representing a 1,538% price increase over 5 years.
Manufacturers told the GAO that competition shapes pricing, and low competition leads to higher prices. They said that the situation could be helped if the FDA reviewed its backlog of abbreviated new drug applications, a goal the FDA itself has made a priority. ■
Source: Generic drugs under Medicare Part D: generic drug prices declined overall, but some had extraordinary price increases. GAO-16-706. Washington: October 24, 2016. Available at: http://gao.gov/assets/680/679022.pdf.
Can Congress Curtail Drug Prices?
With two bills introduced in September 2016, they aim to try
FAIR Drug Pricing Act
U.S. Senators Tammy Baldwin (D-Wis.) and John McCain (R-Ariz.) and Representative Jan Schakowsky (D-Ill.) introduced a bill called the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act to promote price transparency in the pharmaceutical industry. If the AARP-endorsed bill becomes law, Americans will get a clearer picture of how manufacturers arrive at a price and why they choose to raise it.
Manufacturers would need to present a “transparency and justification report” to the U.S. Department of Health and Human Services (HHS) 30 days before a price increase of more than 10%. The report would include “manufacturing [costs], research and development costs for the qualifying drug, net profits attributable to the qualifying drug, marketing and advertising spending on the qualifying drug, and other information as deemed appropriate.” The proposed law does not give HHS the power to reject a price increase, but it would raise awareness of upcoming price increases and make the reasons available. ■
Source: Baldwin, McCain, Schakowsky Introduce Reform Requiring Transparency in Prescription Drug Price Increases [news release]. Washington, D.C.: Office of U.S. Senator Tammy Baldwin; September 15, 2016.
Preserve Access to Affordable Generics Act
U.S. Senators Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) introduced the Preserve Access to Affordable Generics Act, which they say would help “put an end to the practice of brand name drug manufacturers using pay-off agreements to keep more affordable generic equivalents off the market.”
In a release, Sen. Grassley said, “Pay-for-delay deals keep drug costs artificially high for consumers and the taxpaying public. These agreements disrupt the current law that was put in place to speed generic drugs getting to the market.” A 2014 Federal Trade Commission report identified 29 “pay for delay” settlements involving 21 branded drugs with U.S. sales around $4.3 billion. These settlements delay generic drugs from entering the market for 17 months, on average. If the bill becomes law, such settlements would be illegal. ■
Source: Klobuchar, Grassley Renew Efforts to Crack Down on Anti-Competitive Pay-for-Delay Pharmaceutical Deals [news release]. Washington, D.C.: Office of U.S. Senator Amy Klobuchar; September 09, 2015.
The process starts with Dr. Harris’ EMR prescribing module, where pre-approval only takes a minute. Ignoring the pre-approval, pharmacies fax him requesting approval of the branded drug, which requires him to complete a long questionnaire. Next, Dr. Harris faxes the recommendation, in response to which the pharmacy faxes him a letter saying he has to talk to their medical director. Finally, that phone call ends the ordeal — at least until the next prescription.
Dr. Harris explains that he simply doesn’t have time for this level of involvement, and he can’t delegate approvals to staff.
“We all want better drugs, but in so many cases, it is not feasible to prescribe a branded medication that I know is better,” he says. “Azopt (brinzolamide, Alcon) is superior to dorzolamide, but it will cost patients $125 a month compared with $5, so payers want dorzolamide. Many of my patients end up with ocular surface irritation and redness and must switch to Azopt anyway. Combigan (brimonidine/timolol, Allergan) is comfortable and convenient, but pharmacies want us to prescribe two separate medications or a combination that burns upon instillation. Preservative-free Timoptic (timolol, Merck) and Zioptan (tafluprost, Akorn) are great choices when indicated, but pharmacies fight me on those treatments as well.”
Beyond the daily grind of this rigmarole, Dr. Harris is concerned that frustration is leading more doctors to take the path of least resistance, ordering generic “non-equivalents,” which may make branded drugs less popular and therefore less profitable, which could affect the new drug pipeline. “When we have access to new drug innovations, we are often forced to order a less effective drug or drugs that cost less,” says Dr. Harris. “Unless we have hours to fill out forms, we can’t try new medications, so patients don’t get the best drug, and the industry stifles itself because we’re not supporting innovation.”
A Constant Struggle
Dr. Harris’ experience is familiar to his colleagues. The national effort toward healthcare reform touches physicians in many ways, including the financial consequences of the time-consuming effort to maintain prescribing authority. In the ever-present branded-versus-generic debate, this struggle promises to be very influential. ■
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