A worrisome trend for generics
A year ago I posted about my surprise when my husband’s prescription for levothyroxine, a generic drug, suddenly increased in price by 200%.
After a little investigative work, I discovered the reason for the sudden price hike was a shortage of the drug, which I was told would resolve within a few months.
Actually, the shortage was resolved as promised. The price, however, has remained stubbornly high. In fact, it is about 700% more expensive now than it was 18 months ago ($40 for 30 days rather than $5 for 30 days).
Levothyroxine is not the only generic drug affected. Since mid-2013, dozens of generics have seen price spikes of 1000, 6000 or even 17,000%!
And apparently there is no end in sight to this upward trend. Why?
A perfect storm for price increases
Several reasons have been put forward, and I suspect a combination of factors is driving the higher cost of generics—a perfect storm, if you will.
- Over the last few years, there has been a consolidation of generic drug manufacturers with the big guys buying out the little guys. The majority of generics are made by just a few companies.
- Other drug manufacturers have simply stopped making some generics, leading to drug shortages.
- Generic drug manufacturers have also faced quality control issues, with the Food and Drug Administration (FDA) banning import of some drugs or drug components from overseas facilities (mostly in India).
- Demand for medications has increased, due to Obamacare’s mandated prescription drug coverage on all health care plans.
So what are we seeing? Less competition, reduced supply and increased demand. The perfect recipe for price hikes!
Congress gets involved
On top of the obvious economic factors, there have been accusations of price gouging and antitrust violations.
This whole drug price situation is really the stuff of mobster movies. Or imagine a sitcom about what happens when gasoline (petrol) prices increase by 900% overnight. That wouldn’t be funny for very long. People would complain loudly about being held hostage or extorted.
In October Congress launched an investigation into the alarming rise in generic drug prices.
In a letter to the drugmaker, the lawmakers pointed to the price hike for Albuterol Sulfate, which is used to treat asthma and other lung conditions. The average cost for a bottle of 100 pills was $11 last October, but rose to $434 by this past April. And the doxycycline hyclate antibiotic cost $20 last October for a bottle of 500 tablets, but by April, the price was $1,849, according to their pricing chart.
“It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs,” says U.S. Sen. Bernard Sanders (I-Vt.) in a statement. “Generic drugs were meant to help make medications affordable for the millions of Americans who rely on prescriptions to manage their health needs. We’ve got to get to the bottom of these enormous price increases.”
However, I’m pretty sure Congress has been sidetracked by a lot of other issues. If interested, you can help refocus them on this problem by contacting your state’s representatives.
What’s a patient to do?
Patients and physicians have historically looked to generics as a sure-fire way to lower health care costs. Unfortunately it’s not so simple any more, and like so much about health “reform” the burden is now on patients to look out for their best interests.
What can you do?
- At the doctor’s office, DO NOT have a prescription immediately sent electronically to your usual pharmacy. Ask for a printed copy of the prescription with the name of the drug, the dose, and the number of refills. With this in hand, you can compare prices by phone or online. The price of generics will vary HUGELY, so shop around for the best price.
- Understand your health insurance plan’s prescription drugs benefit! Because of skyrocketing drug prices, insurance companies are putting drugs into payment “tiers” and will pay more towards cheaper, lower-tier (usually generic) drugs. Many high-cost drugs are being dropped entirely. You might need to have a prescription filled at an “in-network ” pharmacy, or you might be able to save money if you get a 90-day supply via mail order. Double check before filling that prescription!
- Consider the price of the brand name drugs as well. Believe it or not, in some cases brand names will be cheaper than generics.
- Ask your physician if a similar drug can be substituted. For example, generic Lipitor (atorvastatin) is notoriously expensive, costing anywhere from $50 to $300 for a 30-day supply (yes, that’s how much cost varies these days!). But another generic statin, lovostatin, is available from Walmarts’s mail order pharmacy for only $4 for 30 days. (Better yet, ask your doctor if you need that statin at all.)
Overall, for any drug prescription I suggest getting into the habit of asking:
- “Do I really need this drug?”
- “What are the alternatives?”
- “How much does it cost?”