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The Disappearance of Generic Drugs

(My source for this post is Elisabeth Rosenthal’s article in the New York Times:
–which has actually published almost a year ago, but seems to have some important information that others besides me may have missed.)

Once upon a time, we knew that almost all drugs would eventually turn generic. Under the influence of the Hatch-Waxman Act of 1984, most drugs made the transition from expensive brand-name to cheap generic after 20 years (which actually amounted to 10-12 years after a drug first came onto the market). Walmart inaugurated the sales pitch of the “$4 generic” and generally generic drugs were quite affordable.

During the first decade of the twenty-first century, savings picked up. More and more older drugs went generic, and the companies had fewer brand-name drugs to replace them with.

Or so it was supposed to go. Rosenthal tells us what has actually happened. She focuses her story on asthma drugs.

Very few new asthma drugs are on the market, so treating this common disease should be cheap. It is certainly cheap in other countries, where the government intervenes to keep medicine affordable. But in the U.S., virtually every inhaler costs what we’d expect to pay for brand-name drugs, even if the active ingredient is as old as the hills.

One of the oldest drugs for asthma is the basic bronchodilator, albuterol. You’d think that you could get a simple albuterol inhaler for a few bucks, right? That was true until a few years ago when the FDA got environmentally conscious and demanded the drug companies remove chlorofluorocarbon propellants from inhalers because they harmed the environment. The companies were happy to do so–and were promptly issued new patents for their drug products, despite the fact that the basic drug was the same. So now we’re on another 20-year rollercoaster until these drugs get cheap again (pending whatever new wrinkle the companies can throw at us in the meantime).

The FDA says that “difficult, longstanding scientific challenges” make it hard to measure drug activity deep in the lung and so assure that a new propellant or other vehicle really produces the same drug product. Meanwhile, other nations have managed to demand that drug companies sell these inhalers at much lower than brand-name prices, and nowhere in the world, to my knowledge, have any medical difficulties arisen because the dose of a drug from a new inhaler is actually different than the old dose. The US is basically the only country in the world where these drugs cost so much. (Many European countries have forced the common asthma drugs over-the-counter.)

Rosenthal writes, “The Centers for Disease Control and Prevention puts the annual cost of asthma in the United States at more than $56 billion, including millions of potentially avoidable hospital visits and more than 3,300 deaths, many involving patients who skimped on medicines or did without.”

As usual, the uninsured in the US pay top dollar for these drugs. As Rosenthal notes, “Lawmakers in Washington have forbidden Medicare, the largest government purchaser of health care, to negotiate drug prices. Unlike its counterparts in other countries, the United States Patient-Centered Outcomes Research Institute, which evaluates treatments for coverage by federal programs, is not allowed to consider cost comparisons or cost-effectiveness in its recommendations…..California’s Medicaid program spent $61 million on asthma medicines last year, paying more than $200–not far from full retail price–for many inhalers.”

A few years back, the generic drug market appeared to be one of the areas where the large drug manufacturers were losing their clout. Now, at least for some medical conditions like asthma, they seem to have their way again.

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