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Thursday, November 20, 2014
Are Generic Medications Always Cheaper--Find Out The New Answer!
as “prices for some generic medicines have skyrocketed in the last 18 months,” governments are investigating. “A federal grand jury in Philadelphia and the Connecticut Attorney General are looking into possible antitrust violations by generic drugmakers,” and the Senate Subcommittee on Primary Care and Aging is holding a hearing on Thursday “in hopes of getting some answers.” Adam J. Fein, who “follows the pharmaceutical supply chain as president of Pembroke Consulting,” wrote in an analysis released in August “that one out of 11 generic drugs more than doubled in cost in the prior 12 months, with some increases exceeding 1,000 percent.”
Consumers are encountering substantial increases for some drugs. One notable example is a heart drug known as digoxin, which used to sell for pennies a pill, but a month’s supply can now fetch up to $1,200—although the average cost is closer to $50, according to GoodRx.com, a website that tracks prices.
Some insurers are responding by changing reimbursement coverage so that consumers must pay a larger share of the cost, says Adam Fein of Pembroke Consulting, who follows pharmacy distribution. Meanwhile, he calculates that in this year’s third quarter, pharmacies paid more for 37% of all generics than they did in the previous quarter, and 3% of 2,535 generics more than doubled in cost.
This last point underscores that not every generic has skyrocketed in price and the Generic Pharmaceutical Industry Association argues that assuming there are across-the-board price increases is a mischaracterization. What’s more, consumers whose insurance coverage hasn't changed do not feel the higher prices paid by pharmacies.
The FDA has a policy to expedite reviews to combat shortage, but there is a backlog of applications for generic approvals. As of early last month, agency data shows there were 3,552 applications waiting to be processed, compared with 1,359 in October 2012, when legislation passed to create fees for speeding reviews.
So can the logjam be broken? Mr. Fein believes selective generic inflation will continue for another 12 to 18 months, but new supplies should emerge and reduce prices. And while some insurers may want consumers to pay more, insurers are also “a little nervous, because they’ve spent so many years telling consumers to switch to generics and don’t want to go back on that story.”