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Trying to break a brand-name habit With health care bargains few and far between, 'huge potential' exists for generic drugs in an uphill climb for public acceptance

As medical costs spiral higher, one of the few bargains in health care is looking better than ever: generic drugs.

Choose omeprazole instead of Prevacid for heartburn and spend about $1.60 a day instead of $5, for example.

Take lovastatin in place of Zocor for high cholesterol and the daily cost is about $1.30 instead of $4.70.

"There's huge potential for patients, employers and taxpayers to win on this," said Joel Owerbach, chief pharmacy officer for Univera Healthcare and Excellus BlueCross BlueShield.

So why aren't generic drugs more widely used? There are several answers.

Generics must overcome an assortment of obstacles, including the perception that they're not as good as brand-name drugs.

Big pharmaceutical companies are fighting back against generics with litigation, advertising and other tactics.

And while the Bush administration pushes for greater generic use, the federal agency that approves generics is backlogged with applications.

"We've got a decent uphill road to climb," Owerbach said.

Upstate New York could save more than $800 million a year by maximizing the use of generic drugs, according to a recent report issued by Univera and Excellus, affiliates of the Rochester-based Lifetime Healthcare Companies.

The study also found that generic use varies greatly by region. Western New Yorkers use generics more often than patients elsewhere upstate, a reflection of different prescribing patterns by physicians.

The conclusions mirror an Express Scripts study released in October that said Americans could have saved $20 billion in 2004 alone by switching from brand-name medications to less expensive generics.

"The most dramatic savings could come from gastrointestinals such as Zantac, where generics are used about a third as often as they could be," said Raulo Frear, chief clinical pharmacist for the nation's third-largest pharmacy benefit manager.

The push to encourage generics comes at a critical time.

Prescription drug use is increasing as the population ages, new drugs come to market, and more people use more medication.

The introduction in January of Medicare Part D means taxpayers now will pay for the prescription expenses of the elderly and the disabled -- estimated at $724 billion over 10 years.

>A consumer opportunity

The cost of medication is on the rise, as well. Retail drug prices increased by 25 percent in the last five years, with brand-name drug prices increasing three times faster than generic drug prices, according to a 2005 report by the Government Accountability Office, the investigative arm of Congress.

President Bush is moving forward with a strategy built around the idea that patients who pay a larger share of the bill will shop more wisely for their care, and generic drugs stand as one of the few areas of medicine where consumers can compare prices and quality.

Manufacturers of generics say the percentage of generic use could be much higher. They see a huge opportunity in the next five years as nearly 70 brand-name drugs are expected to come off patent and become available as generics. These drugs together account for more than $45 billion in U.S. sales and include such blockbusters as Zoloft, Zocor and Norvasc, according to pharmacy benefit manager Medco Health Solutions.

"Once consumers realize that generics provide the same medicine at a lower cost, you're going to see many switch when these medications are available," said Andrea Hofelich, spokeswoman for the Generic Pharmaceutical Association.

Health plans in recent years have tried to expand generic use by redesigning prescription benefits, including three-tier co-payments in which patients pay the smallest fee for generics.

The effect has been significant. Generic use among members at HealthNow, the parent company of BlueCross BlueShield of Western New York, increased from 41.5 percent in 2002 to 53.1 percent in 2005.

Recently, Express Scripts took the aggressive step of dropping Pfizer's best-selling cholesterol pill, Lipitor, from its preferred-drug list and substituting Merck's Zocor, which will be available as a generic in June.

HealthNow is considering a plan to install machines in medical offices that dispense samples of generics, a counterattack on the practice of drug manufacturers heaping samples of brand-name medications on physicians that then get handed out to patients.

"The problem with brand-name sampling is that the drugs tend to be the high-priced medications," said Dr. John Gillespie, HealthNow's vice president of medical affairs management.

Some doctors and patients remain skeptical about generics despite measures to ensure that the low-cost alternatives are essentially identical to their branded counterparts. Studies have failed to find major differences.

>'Dramatic' savings

Drug advertising also influences people, as does the common perception that higher-priced products are better.

"People do wonder whether it's the same drug and ask why it's cheaper, thinking cheaper isn't as good. But customers are also becoming more savvy," said Susan Novotny-Cannata, pharmacy operations manager for Wegmans' Buffalo division.

Melvin Shuster is a believer.

He is paying far less for five medications after substituting some of them for generics. The switches include the cholesterol-reducing drug lovastatin for Lipitor, a difference between $128 and $260 for a three-month supply.

"The savings are dramatic," said Shuster, an 80-year-old retiree living in Amherst.

Brand-name drugmakers, some hurting from the growth of generics, have not stood still against generic competition.

Their strategies include challenging patent infringements in court, aligning with generic companies, and reformulating popular drugs. AstraZeneca, for instance, made only minor changes to the heartburn medicine Prilosec as its patent was set to expire and then marketed the drug as Nexium, the highly advertised purple pill.

Regulatory battles also could have a major influence.

Currently, the first generic company to successfully challenge the patent of an approved drug is rewarded with a 180-day exclusivity period, when generics earn much of their profit. Brand-name manufacturers have responded by selling generic versions of their branded medications under private labels.

Critics say "authorized generics" are brand products masquerading as generics, and the Federal Trade Commission has agreed to look into the practice.

>Bureaucratic bottleneck

The Food and Drug Administration has not yet established a definitive approval process for generic versions of the hundreds of biopharmaceuticals in development.

Traditional drugs made of chemicals are relatively easy to copy. Drugs made from living sources are complex, making it more difficult to ensure that generics will work the same as the original product.

Generic manufacturers say the science has progressed enough to permit an abbreviated approval process for products with low to modest complexity.

Biotech drugmakers, citing concerns over safety and effectiveness, disagree. They contend that biogenerics should undergo the same testing as the initial branded drug, according to the Biotechnology Industry Organization.

Meanwhile, there is a bottleneck in the federal bureaucracy.

The FDA has a backlog of more than 800 applications for new generic drugs and not enough staff to review them in timely fashion.

"It's a situation," Hofelich said, "where the workload is increasing but the resources to deal with it are not."


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