Canadian provinces to cut generic payments
Canadian generic drug makers expressed dismay over a new plan to reduce reimbursements for a half-dozen generic medications in most of the country’s provinces. According to published reports, a group of premiers had reached a coordinated deal to reduce the prices their governments paid for six generic drugs, hoping to save the provinces nearly $100 million.
Quebec did not take part; that province announced in November 2012 the elimination of its "15-year rule," a rule unique to the province that required its prescription drug plan to reimburse the price of the original drug even after patent expiration had made cheaper generics available. Currently, provinces pay between 25% and 40% of the cost of branded drugs for six key generics, but under the deal, they will pay 18% starting in April.
The drugs are the generic versions of Pfizer’s cholesterol drug Lipitor (atorvastatin); King Pharmaceuticals’ blood pressure drug Altace (ramipril); Pfizer’s antidepressant Effexor (venlafaxine); Pfizer’s angina drug Norvasc (amlodipine); AstraZeneca’s gastroesophageal reflux disease drug Prilosec (omeprazole); and Eisai and Johnson & Johnson’s GERD drug Aciphex (rabeprazole).
While praising a decision by the provincial governments not to pursue a plan to tender for generic drugs, the Canadian Generic Pharmaceutical Association was displeased with the reimbursement reduction.
"CGPA is pleased that provincial governments have decided not to proceed with tendering for generic pharmaceutical products. Tendering for generic drugs could result in drug shortages and delayed savings to Canada’s healthcare system." CGPA president Jim Keon said. "We are, however, disappointed by the provincial governments’ announcement of further cuts to retail or reimbursed prices for generic prescription medicines."
While generics account for 80% of dispensed prescriptions in the United States, the equivalent rate in Canada is more than 60%, according to IMS Health.
Survey: Many doctors ignore generic savings
Are doctors needlessly raising the costs of America’s healthcare system through their prescribing habits? Absolutely, say researchers. A new report appearing in the Jan. 7 issue of JAMA Internal Medicine highlighted the powerful role played by branded drug advertising on consumer preferences and physicians’ prescribing habits, and asserted that many doctors ignore the cost-saving benefits of generic drugs when writing prescriptions by acceding to patients’ wishes.
"Approximately 4-of-10 physicians report that they sometimes or often prescribe a brand-name drug to a patient when a generic is available because the patient wanted it," researchers reported in JAMA. "These numbers suggest that the unnecessary costs associated with this practice to the healthcare system could be substantial."
The JAMA report is based on a survey — conducted by the Harvard Medical School and the Colorado School of Public Health — of 1,891 randomly sampled prescribing physicians practicing in seven medical specialties. Approximately 37% of the doctors surveyed told researchers that in many cases they prescribe a specific branded drug the patient asks for, rather than an available generic alternative, despite the higher costs involved.
Advertising by pharmaceutical companies prompts many patients to pressure their doctors for the brand-name prescription drug, the report suggested. "Prescribing brand-name drugs when generic drugs are available generates unnecessary medical expenditures, the costs of which are borne by the public in the form of higher co-payments, increased health insurance costs and higher Medicare and Medicaid expenses," the report noted.
The result is "is a huge source of wasteful spending that can be prevented," wrote Eric Campbell, professor of medicine at Harvard Medical School and team leader of the study. Researchers found that older physicians are more likely to acquiesce to their patients’ requests for the branded medicine. The survey, the authors noted, "shows that 43% of physicians in practice more than 30 years sometimes or often give in to patients’ demands for brand-name drugs compared with 31% physicians in practice for 10 years or less."
In addition, doctors "working primarily in sole or two-person practices were significantly more likely to acquiesce to patient demands than those working in a hospital or medical school setting [46% vs. 35%]," JAMA reported. But pediatricians, anesthesiologists, cardiologists and general surgeons "were significantly less likely to acquiesce patient demands relative to internal medicine physicians."
The Generic Pharmaceutical Association was quick to seize on the survey findings. "The JAMA Internal Medicine study demonstrates that we are still leaving savings on the table that could be achieved by increasing the use of generic drugs," GPhA president and CEO Ralph Neas asserted.
Outlook for biosimilars remains cloudy
Biosimilar medicines have been approved and routinely prescribed in Europe for nearly seven years, and creation of a clear pathway for Food and Drug Administration review and approval of generic versions of bioengineered drugs was enshrined into law in the United States with the passage of the Patient Protection and Affordable Care Act nearly three years ago. But IMS Health and other industry experts agree it could still be years before biosimilars are available to pharmacies and patients in this country.
The availability of biosimilars would save health plan payers and patients billions of dollars annually — estimates from various economic impact studies range from $42 billion to as high as $108 billion over the first 10 years they’re on the market. The Congressional Budget Office estimated that biosimilar competition would lead to "substantially lower prices" for biotech medicines that can cost thousands of dollars per prescription, with prices for the "me-too" versions of those medicines initially discounted about 25% below the branded versions and prices dropping further as competitive forces fully take hold.
Nevertheless, challenges to the approval and marketing of lower-cost, no-name alternatives to today’s biopharmaceuticals are daunting. Would-be manufacturers of these bioengineered alternatives face several hurdles.
One big one: Federal mandates notwithstanding, an abbreviated pathway at the FDA for approval of biosimilars has yet to be established. "As we’ve been working to address the backlog in applications for new generic drugs, we’re also working on creating an abbreviated approval pathway for biosimilar biologics," FDA commissioner Margaret Hamburg told generic industry leaders last year.
But although that approval pathway "was authorized as part of the Patient Protection and Affordable Care Act of 2010," she said, a review and approval regimen for biosimilars is far more complex than that for traditional generic abbreviated new drug applications. There are "scientific issues in determining biosimilarity" and "quality-related issues" to consider, among other issues.
"This will not be a one-size-fits-all program," Hamburg promised. "Our requirements will depend upon the product."
One development that could speed the process was the establishment, for the first time, of a user-fee system for biogenerics, or BsUFAs, as part of the reauthorization of the Prescription Drug User Fee Act in 2012. "BsUFA would collect fees for products under development shown to be biosimilar to or interchangeable with an innovator FDA-licensed biological product," Hamburg said. "The funds would support early meetings with companies."
Meanwhile, "devoid of a specific regulatory pathway, the United States currently has no established industry for biosimilars," IMS Health noted in a report. Nevertheless, IMS reported, "with leading manufacturers, including Pfizer and Merck, already positioned to compete, and patients and health insurers stepping up the pressure for access to low-cost, high-value drugs, the United States is forecast to be the single biggest opportunity for biosimilars by 2020. Whether this opportunity is realized is therefore the most important differentiator between success and failure for biosimilars in the next decade."
An approval process at the FDA isn’t the only roadblock biosimilars face on the way to eventual marketing, however. Led by such biotech giants as Amgen and Genentech, the biotech industry is intensively lobbying state lawmakers around the country to block "me-too" competition by restricting the ability of pharmacists to substitute generic versions of biological drugs, even if approved by the FDA.
According to a Jan. 28 report in the New York Times, at least eight states have introduced bills to curb biosimilar competition on patient-safety grounds, and other states are developing similar legislation.
Generic Pharmaceutical Association president and CEO Ralph Neas called the moves "a pre-emptive strike by Amgen and Genentech designed to choke the flow of safe and affordable life-saving biologic medicines to patients even before these products have been approved by the Food and Drug and Administration."
Such efforts, Neas added, "are doubly worrying for state legislators because not only will they slow availability of safe, effective and more affordable therapies to patients, but they also will dramatically decrease the much-needed cost savings that biosimilars will provide. At a time when legislators are desperately seeking ways to keep their state fiscally sound, these bills will encourage needless and wasteful spending on name-brand therapies even after FDA-approved lower cost biosimilar products become available."