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Generic Drug
Report 2016
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Roxane Laboratories has been defining therapeutic standards for over a century. As a leader in
generic drug development, Roxane Laboratories produces complex therapies with unique packaging and
dosing options. Our innovative research and development team will continue to produce high-quality,
accessible alternatives to brand-name medications to meet the challenges of today and tomorrow.
B R I N G I N G
Q U A L I T Y
F O R
L I F E
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Table of Contents
February 2016
for generics
10 Demand
strong, fueling steady
News: GPhA briefs Congress on generics savings; Practitioners want lower drug prices, but
only 3% expect it; Biosimilars Forum launches
access, awareness initiative and education
guides; Congressional oversight meeting looks
at biosimilars naming, reimbursement
16
17
18
19
20
21
22
10
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Generics Report
GPhA briefs Congress on generics savings
MONTHLY PRICE REDUCTION AFTER LOSS OF EXCLUSIVITY
00%
-20-20
Price reduction
n Oral medicines
n All medicines
-40-40
-51
-57
-60
-60
-66
-66
-67
-66
-80-80
-100%
-100
-74
12
24
-77
36
-77
-78
-80
-78
-77
-80
-80
-81
-81
-81
48
60
72
Months since loss of exclusivity
84
96
108
120
-78
-80
nipulation of risk evaluation and mitigation strategies that can keep generics from
coming to market;
Work to create a framework for biosimilars that will improve patient access and
approval time; and
Repeal section 602 of the 2015 Bipartisan
Budget Act.
GPhA will continue to highlight the undeniable role of generics in lowering health
costs, Davis said. Together with Congress, the
administration, regulators, stakeholders and
others we can do more to ensure the generic
pharmaceutical industry continues to enhance
patient access and drive patient savings for
years to come.
4 FEBRUARY 2016
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Apotex is everywhere.
1/11/16 2:18 PM
1/21/2016 8:40:37 AM
Generics Report
Congressional oversight meeting looks
at biosimilars naming, reimbursement
The House Energy and Commerce Committee convened on
Feb. 4 to hold an oversight meeting about the Biologics Price
Competition and Innovation Act
of 2010, the first since President
Barack Obama signed the legislation paving the way for biosimilars in 2010.
Among the stakeholders in
the enactment of the law is the
Generic Pharmaceutical Associations Biosimilars Council, whose
members include companies that
have developed or are developing
biosimilar drugs. GPhA president
and CEO Chip Davis commented
on the hearings, noting the need
for more straightforward naming
conventions for biologics and bio-
THE BIOSIMILARS
COUNCIL, A DIVISION OF
GPHA, IS CONCERNED THAT
DIFFERENT INTERNATIONAL
NONPROPRIETARY NAMES FOR
BIOLOGICS AND BIOSIMILARS
COULD LEAD TO PATIENT
AND PROVIDER CONFUSION,
INCREASING THE LIKELIHOOD
OF PRESCRIBING ERRORS
AND OTHER UNINTENDED
CONSEQUENCES.
Chip Davis, president and CEO, GPhA
similars and calling for price calculations that ensure sufficient reimbursement from the Centers for
Medicare and Medicaid Services.
6 FEBRUARY 2016
004_006_GenericReport_2016.indd 6
Practitioners
Continued from page 4
wanted this predicted either no
change or lower reimbursement.
Similarly, over half of respondents
who wanted more patient-oriented care predicted either no change
in this dimension, or, in fact, less
patient-oriented care.
The data show how the pharma industry is largely on the same
page as consumers and regulatory authorities when it comes to
hot-button topics like drug prices,
even if the data dont point the
way to an immediate resolution,
said Hayes. Sometimes quantifying the size of the challenge is the
first step to solving it.
The three-minute microsurvey
included 118 respondents 52
physicians, 59 pharmacists and
seven managed care professionals
fielded in December 2015, using InCrowds real-time platform.
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Generics Report
GPhA appoints VP corporate development
The Generic Pharmaceutical
Association announced in January that it had appointed Anna
McDermott-Vitak to be the organizations VP corporate development and administration.
McDermott-Vitaks role will be
overseeing GPhAs membership,
human resources, finance, IT and
meetings.
Anna will strengthen our external engagement with current
and prospective member organizations, GPhA president and
CEO Chip Davis said. Annas
Buzz
BYTES
8 FEBRUARY 2016
008_GenericReport_2016.indd 8
ty years in biotechnology.
Im thrilled to be part of a team
that helps bring more affordable
medicine to millions of patients,
McDermott-Vitak said. At a time
when health costs are under scrutiny, this industry has a consistent
record of generating billions in
patient and health system savings
while expanding access. I look
forward to growing the voice of
GPhA within and beyond the Beltway while guiding the association
through an exciting period of development and expansion.
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The
Audit
Bureau
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2015/2016
GBR Generic Brand ReferenceGuide
Android*
Apple
Our Vision:
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10 FEBRUARY 2016
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U.S. DOLLARS*
% MARKET SHARE
$66,189
16.6%
% GROWTH
7.4%
Teva
8,862
13.4
Mylan Labs
7,157
10.8
2.5
Actavis US
5,323
8.0
-15.0
Sandoz (Novartis)
5,193
7.8
9.7
Sun Pharmaceutical
2,623
4.0
-14.4
Endo Pharmaceutical
2,187
3.3
42.4
Par Pharmaceutical
1,934
2.9
-5.0
Dr. Reddys
1,756
2.7
8.6
Lupin Pharmaceuticals
1,646
2.5
-0.6
2.4
16.7
Hospira
1,607
TOP 10
$38,288
57.8%
12.8
3.1%
* In millions
Source: IMS Health, National Sales Perspectives, June 2015
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Generics Report
tion and a withering pipeline of broad-reaching drugs, manufacturers are shifting their
drug discovery, development and pricing
strategies, said pharmacy benefit management giant Express Scripts in its most recent
Drug Trend Report. Now, manufacturers are
increasing their focus on medications that
treat small subsets of patients with diseases
like cancer, or patients with rare diseases such
as hereditary angioedema.
Manufacturers also are tailoring molecular drugs to patients with specific genetic profiles known to be affected by certain
diseases, so the drugs are more effective in
treating those specific patients, Express
Scripts reported.
Trumpeting the cost savings
It goes without saying that the primary
engine driving the rise in generics market
share is the price differential between branded and copycat medicines. Savings from
generics reached an all-time high in 2014,
according to the seventh annual Generic
Drug Savings in the United States report,
compiled on behalf of the Generic Pharmaceutical Association by the IMS Institute for
Healthcare Informatics.
The 2015 report shows that generic drugs
are an essential part of any solution to sustaining our health system and are central to
efforts that increase patient access and generate savings for patients, taxpayers, em-
% MARKET SHARE
% GROWTH
3,605
100.0%
455
12.6
Mylan Labs
330
9.1
-4.6
Sandoz (Novartis)
259
7.2
11.8
Teva
4.0%
-3.4
Actavis US
234
6.5
-4.1
Endo Pharmaceutical
200
5.5
-5.0
Lupin Pharmaceuticals
200
5.5
8.0
Amneal
151
4.2
1.6
Sun Pharmaceutical
131
3.6
-22.3
Zydus Pharmaceuticals
121
3.4
6.9
Aurobindo Pharmaceuticals
TOP 10
113
2,194
* In millions
Source: IMS Health, National Prescription Audit, June 2015
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010-014_GenericReport_2016.indd 11
3.1
8.0
60.9%
-1.3%
drugs also saved the health system $638 billion of the most recent decades $1.68 trillion, said Davis. Older generics generated
upward of $100 billion in health system savings in 2014 and $1.05 trillion in savings in the
last 10 years.
The biggest cost-saving impact, said an
industry report, is in therapy areas that address mental health conditions ($38.0 billion),
treat hypertension ($27.9 billion), or help
manage or lower cholesterol levels ($26.8 billion). Rounding out the top 10, therapy area
savings are accrued in pain medicines ($22.8
billion), anti-ulcerants ($19.2 billion), nervous
system disorders ($15.6 billion), anti-nauseants for cancer ($11.6 billion), anti-bacterials
($11.3 billion), other central nervous system
disorders ($9.4 billion) and attention deficit
hyperactivity therapies ($8.2 billion).
The crucial role that these cost savings play
in areas like improving patient medication
adherhence can hardly be overstated. Patients rising exposure to costs, when not using generics, puts them at risk for worse adherence, said Long of IMS Health.
According to CVS Health, 91% of patients
surveyed by the pharmacy and PBM giant
said having cost-effective alternatives to
more expensive therapies improves medication adherence.
For drug retailers, the rise in generic dispensing remains a double-edged sword, bestowing both benefits and challenges. All
pharmacy operators and pharmacy benefit
managers are constantly adjusting the delicate balance between the higher margins offered by me-too meds and the lower topline
sales they bring.
The dramatic price hikes put through by
some generic manufacturers in recent years
added another layer of complexity to that
balancing act.
In a recent report on its financial performance, CVS Health underscored the tug of
war between profit margins and sales volumes. On the one hand, CVS reported, the
increase in our generic dispensing rates in
both of our operating segments continued
to have an adverse effect on net revenue in
2014 as compared to 2013, as well as in 2013
as compared to 2012. However, the company added, our gross profit continued to
Continued on page 12
FEBRUARY 2016
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4,382,482
% MARKET SHARE
% GROWTH
100.0%
2.2%
Levothyroxine
120,297
2.7
1.4
Acetaminopohen/Hydrocodone
105,748
2.4
-19.9
Lisinopril
104,405
2.4
1.2
87,133
2.0
15.1
Atorvastatin
Metoprolol
85,772
2.0
1.6
Amlodipine
79,912
1.8
4.3
Metformin
78,732
1.8
4.7
Omeprazole
75,696
1.7
3.0
Albuterol
69,421
1.6
6.9
Simvastatin
69,199
1.6
-10.2
876,314
20.0%
TOP 10
0.4%
* In thousands
Source: IMS Health, National Prescription Audit, June 2015
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Generics Report
GENERICS CONTRIBUTION TO U.S. PRESCRIPTION GROWTH
2011
Generics
10%
Generics
42%
Brands
58%
Brands
90%
Source: IMS Health, National Sales Perspectives, Branded generics disaggregated, June 2015
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2015 Dr. Reddys Laboratories, Inc. RDY-0215-096 All right reserved. February 2015
FEBRUARY 2016
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Generics Report
Continued from page 12
bursements to pharmacies for the medicines
dispensed to their members.
IMS Long attributed the price hikes of recent years to several factors. Among them:
Increased scrutiny from the FDA,
which means manufacturers need
to invest more into their quality systems, and when a quality/supply issue arises it creates the opportunity
to increase prices to recoup part of
their investment, said Long. Generic
manufacturers have complained bitterly about a backlog of some 4,000
abbreviated new drug applications
that had piled up at the FDA by 2015,
despite the additional resources available to the agency under the Generic
Drug User Fee Amendments of 2012,
and Kathleen Uhl, director of the
FDAs Office of Generic Drugs, has
promised that the agency will speed
up its review and approval cycles as it
hires additional staff to accommodate
a flood of ANDAs.
A consolidation among the retail pharmacy chains and wholesalers that depend on manufacturers drug product
supply. The frenzied merger activity
$32.8
$27.7
$17.8
$15.4
2009
$20.7
$18.9
2010
$16.6
2011
2012
$10.3
$11.0
2013
2014
$11.1
2015
2016
2017
2018
Note: Sales from year prior to expiry for years 2009-14; sales in MAT Sep. 2014 used for years 2015-18
Source: IMS Health, December 2014
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REDEFINED
Upsher-Smith Laboratories, Inc., 6701 Evenstad Drive, Maple Grove, MN 55369 | 1-800-654-2299
2016 Upsher-Smith Laboratories, Inc. 110217.03
35
20
20
15
15
10
Price reduction
25
$22.2
$23.4
$21.4
10
$9.0
$0
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2016
2017
2018
2019
Sales in billions in MAT September 2015 used for years 2016 to 2019
Source: IMS Health, National Sales Perspectives, March 2015
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Generics Report
Expiring patents set stage for biosimilars
Last years launch of Sandozs
Zarxio (filgrastim-sndz), the first
biosimilar drug in the United
States, was just the opening salvo
of a burgeoning market that is
only expected to grow over the
next five years. The Biosimilars
Council of the Generic Pharmaceutical Association pointed out
that by 2020 the patents for eight
biologics will have expired, with
expiries happening in 2016 for
several blockbuster medications.
The biggest name among 2016
patent expiries is AbbVies injectable treatment for rheumatoid arthritis, plaque psoriasis and other
autoimmune conditions, Humira
(adalimumab). Humira is not just
a blockbuster drug, but is in fact
one of the top-selling drugs of all
time it saw $2.2 billion in sales
growth just in the first six months
of 2015, according to IMS Health.
Currently, Amgen believes it
is the first company to file an application for a biosimilar of Humira, called ABP 501, which has
shown comparable safety and
clinical equivalence to Humira.
But according to recent reports,
Amgen, which had hoped to be
able to market its biosimilar by
2017, might be delayed in launching ABP 501 as it is currently in a
patent dispute with AbbVie.
Beyond Humira, blockbuster
drug Rituxan (rituximab) with
moving annual total sales of $3.6
billion as of June 2015, up 21%
will expire in 2016. One bit of
news to watch for this year will
be which pharmaceutical company of the several currently developing a biosimilar version or who
have biosimilars of the rheumatoid arthritis and oncolytic drug
in other countries will be able to
submit its application first.
Other biologics whose patents
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U.S. DOLLARS*
PATENT EXPIRATION
Humira
$8.5
2016
Rituxan
3.6
2016
Remicade
4.7
2018
Enbrel
6.1
2028
* In billions
Source: IMS Health, National Sales Perspectives, June 2015
Biopharmaceutical production at Sandoz, a Novartis company that launched Zarxio the first biosimilar drug in the United States last year.
FEBRUARY 2016
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Q&A
better way forward that strengthens the communication of drug safety information without
putting patients at risk. Current law requires
brands and generics to carry the same label
to assure healthcare practitioners have consistent information to inform their decisions
and patient conversations. The proposed
rule would change this by requiring generic
manufacturers to update labels based on incomplete information without first receiving
FDA approval. However, no single manufacturer has access to the full range of available data the proprietary data from clinical
studies or the data held by each individual
applicant holder.
As Congress continues to look into the question of drug prices with hearings in early February featuring industry experts, one of the
organizations being turned to is the Generic
Pharmaceutical Association, whose president
and CEO Chip Davis recently responded to
the Senate Health, Education, Labor and
Pensions Committee about the state of the
generic drug industry. Drug Store News spoke
to Davis about the year ahead for GPhA and
what some of the biggest battles for the generic drug industry will be.
DSN: You started the year calling for the passage of the FAST Generics Act what are
some of the biggest benefits the industry and
patients will see if that bill makes it to the
presidents desk and he signs it into law?
Chip Davis: Misuse of FDA REMS patient
safety programs is one way that certain
brand drug companies delay generic competition. Failure to address the loophole that
makes these abuses possible is a missed opportunity to encourage more competition in
generic drugs and to generate billions of dollars in additional savings for patients and the
health system.
DSN: One of the items GPhA is wary of is compounding alternatives to certain drugs. What
are some of the potential pitfalls of allowing
compounding to take the place of approved
generics and how do you hope to find a different solution?
Davis: Rising health costs are unsustainable
for patients and our health system. However,
encouraging mass compounding via outsourcing facilities or drugs that are unapproved by the FDA, such as the compounded alternative to Turings Daraprim, creates
avoidable patient safety risk. Circumventing
the FDA approval process is not the answer.
Generics are currently 88% of prescriptions
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Generics Report
Manufacturers await FDA quality metrics
By David Salazar
Last year saw a big shake-up for
the pharmaceutical industry with a
regulatory focus on quality. In 2016,
its likely that the Food and Drug
Administrations interest in quality
will continue as drug manufacturers await the final version of its
Quality Metrics Guideline.
The agency released a draft
guidance of the much-hinted-at
guideline in July. Under the draft
guidance, OTC and prescription
drug manufacturers, among others,
would be required to submit to the
FDA various quality-related data
about finished drug products or
active pharmaceutical ingredients
used to make them.
Among the data manufacturers
would be required to report, according to the draft guidance, are
lot acceptance rate (calculated from
number of attempted lots less the
ones pending disposition and those
rejected because of specification issues); invalidated out-of-specification rate (the number of invalidated
results over the total number of
tests performed); and annual product review, or APR, or product quality review, or PQR, on-time rates.
Additionally, manufacturers can
submit optional metrics, including
the effectiveness of corrective and
preventive actions and whether an
APR or PQR was reviewed by the
quality unit head or the operations
unit head.
Manufacturers would submit
data collected during a one-year
period that begins after the FDA
issues its final guidelines, with reports coming due within 60 days of
the end of that year, to be submitted
through its FDA Electronic Submissions Gateway. Manufacturers who
dont report their data would have
their predicted risk raised by the
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019_GenericReport_2016.indd 19
FDA, which could lead to earlier inspections and their products being
deemed adulterated and thus subject to enforcement action.
Using the data, the FDA said it
plans to develop measures for a
manufacturing sites and a drugs
quality, as well as the effectiveness
of the system surrounding a products manufacturing. The hope for
the metrics, the FDA said, is to give
the agency insights into the state
of quality control, while giving it a
quantitative method of evaluating
quality of products, facilities and
systems. It also hopes to use the
metrics to improve the effectiveness
of inspections, and highlight the factors that contribute to disruptions in
supply. This is all, according to the
agency, also going to make drugs
more reliably available for patients
by reducing the number of recalls
and quality-related shortages.
But for some in the industry, the
proposed reporting requirements
might mean more work for manufacturers, and might even cause
some of the issues that the reporting process is aimed at combatting.
Speaking at the FDAs public meeting on the draft guidance in August,
the Generic Pharmaceutical Associations VP sciences and regulatory affairs, David Gaugh, outlined
several issues that the organization
and its members which he said
collectively manufacture more than
90% of generics in the United States
saw with the draft guidance.
One of the largest potential pitfalls that Gaugh identified is that
the items many companies are
inspected for are not necessarily
the same as the data the FDA is requesting. Moreover, Gaugh said at
the meeting, the data the FDA is requesting are not kept the way that
the regulator is prescribing, and
there isnt a standard approach to
collecting this data across the industry an issue that the FDA itself
has identified as a potential hurdle.
Gaugh noted that the penalties for
noncompliance are the equivalent
of refusing an inspection, though
refusing to submit data isnt necessarily the same thing. He also said
that the FDA should not penalize
companies for not supplying voluntary data, though the draft guidance suggests de facto penalties for
those who do not comply.
Gaugh suggested that the FDAs
risk-based
inspection
system
should prioritize the FDAs focus
to those suppliers that the FDA
has never inspected, not inspecting
within the last four years, and those
with a history of serious compliance problems. He added that the
FDAs risk-based model should
not affect the cost of generic
drugs by virtue of an undue metrics burden. One of the factors that
IMS Health has cited as contributing to rising generics prices has
been increased scrutiny on manufacturers that are now dedicating
more resources to insuring quality
in the supply chain.
Some of the unintended consequences that Gaugh pointed
out include the potential for drug
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of supply chain efficiencies, improved customer service and additional cash flow to fuel
our companys growth, Standley said.
The drug purchasing and distribution process with McKesson provides our pharmacies with direct-to-store delivery, five days a
week, Standley told investment analysts recently. We have now completed the conversion of all stores and our four pharmacy distribution centers to this new distribution process.
We expect that this new process will provide
the company with working capital benefits
and improved customer service through better
in-stock position. The agreement is also generating purchasing savings that are in line with
our expectations.
Walgreens and AmerisourceBergen
Under terms of its unique supply and equity deal with AmerisourceBergen, Walgreens
Boots Alliance now owns 5.2% of the big
wholesaler, and both companies have combined their massive generic purchasing power.
The agreement provides AmerisourceBergen
the ability to access generics and related pharmaceutical products through Walgreens Boots
Alliance Development GmbH, a global sourcing enterprise formed by Walgreens and Alliance Boots, noted Walgreens in a recent report. The deal also gave Walgreens the right,
but not the obligation, to purchase a minority
equity position in AmerisourceBergen, while
shifting Walgreens formerly in-house distribution of branded and generic drugs to ABC.
Distribution deals beyond big three
More recently, McKesson won a bid to supply pharmaceuticals to Albertsons Safeway
division, while Cardinal inked a pact to distribute generic and branded drugs to the nations third-largest pharmacy benefit manager,
UnitedHealth Groups OptumRx.
All these deals mark a frenzied big-to-build
scale and purchasing power in the retailing
and wholesaling of generics. For generic
drugs, formulary power lies with the distribution channel, not with the payer channel,
said Fein. If we consider Express Scripts and
Walmart, then five entities will purchase about
90% of generic drugs for the U.S. market.
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Generics Report
Amid hike fear, most generic prices drop
By David Salazar
One of the big issues getting the attention of government officials, industry professionals and consumers in 2015 was the price of generic drugs,
particularly the question of what was driving an increase in prices among
the group of medications meant to be the least expensive choice for payers
and patients alike.
Though a recent report by IMS Health and an issue brief from the Department of Health and Human Services underscore the savings that accompany generics prices, and their overall affordability, there are still challenges facing manufacturers that have an impact on their bottom line and,
ultimately, the cost of their generics.
First, the good news. On Jan. 27, IMS Health issued its latest report, Price
Declines after Branded Medicines Lose Exclusivity in the U.S., which highlights just how much of an impact generics have in making medication
more affordable for patients. Using data on generics that entered the market
between 2002 and 2014, IMS Healths analysis showed that the price of a
medicine dropped 51% in the first year following loss of exclusivity and
57% in the second year. For oral medications, that number is 66% in the first
year and 74% in the second year after generic versions hit the market.
The HHS issue brief, published on Jan. 27, looked at pricing trends
among generic drugs. Using data up to the end of 2014, the brief strongly
supports the conclusion that generic drug prices are not an important part
of the drug cost problem facing the nation, and noted that data suggested
generic prices are lowering as branded prices increase significantly. The
brief also pointed out that many generics saw their prices drop in 2014.
But there is another side to the generic pricing coin, namely the more recent trend of price increases for generic drugs. HHS, whose issue brief was
partly the result of increased scrutiny on generics prices, noted that between
July 1, 2013, and June 30, 2014, about 64.8% of Medicaid generics spending
went to drugs that had decreased in price, but that more than a quarter of
spending went to drugs that had risen in price, some as as high as 1,000%.
In fact, drugs whose prices had increased between 100% and 1,000% accounted for 8.6% of Medicaid generics spend, and these medications only
make up about 1.8% of the total overall prescriptions.
So pronounced has the issue of generics prices become that the Senate
Special Committee on Aging convened on Dec. 9 to investigate why the
prices of some generics were increasing.
And congressional action has not stopped on the issue of generics. On
Jan. 28, lawmakers held a hearing to address the speed at which the Food
and Drug Administration is approving generics. Currently, the agency has
a backlog of more than 3,800 generic medications awaiting approval
something for which the HELP committee chairman, Sen. Lamar Alexander, R-Tenn., asked Janet Woodcock, the FDAs Center for Drug Evaluation
and Research director, to talk about at the oversight hearing for the Generic
Drug User Fee Amendments, which seeks to expedite the approval of generic drug applications.
Despite the FDA receiving nearly $1 billion in user fees since 2012 as a
result of these user fee agreements, performance is not living up to Congress or patients expectations, as the number of generic drugs approved
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021_GenericReport_2016.indd 21
per year remains about the same, Alexander said at the hearing. The troubling news is that it is taking longer for the FDA to get drugs through the
approval process, and according to a survey of generic drug makers, the
median approval times have slowed from 30 to 48 months.
Alexander noted that when there are various generic versions of a given
drug, the price of a medication is about 10% the price of a branded version.
And when there is a backlog in applications, manufacturers have to rely on
their existing portfolio to continue to produce a profit. As the HHS issue
brief noted, though, the FDA is working as fast as it can.
It should also be noted that the FDA is fulfilling, and in many cases substantially exceeding, its negotiated GDUFA commitments, the issue brief
said. The FDAs productivity is consistent, and it is currently sustaining
record or near record levels of generic drug approvals.
Woodcock acknowledged the issue and has pledged to have the backlog
more or less dealt with by the time GDUFA faces renewal in 2017.
But besides Woodcocks and CDERs delays in dealing with the application backlog, their proposed Request for Quality Metrics Guideline, a draft
guidance of which was released in July 2015, has the industry concerned.
GPhAs VP sciences and regulatory affairs attended the FDAs public
meeting about the draft guidance, where he expressed concern that the draft
guidance as written has the potential to affect the cost of generic drugs by
virtue of undue metrics burden. What Gaugh told the FDA was essentially
that manufacturers are as invested in quality as regulators, but when more
resources go into proving that they are ensuring a products quality, that
adds onto the cost of producing it, and thus selling it.
GENERIC RX W/
NO COMPARISON
GENERIC RX W/
INCREASES <1%
2.5%
7.4%
GENERIC RX
W/ INCREASES
1% TO 20%
11.0%
64.8%
GENERIC RX W/
DECREASES
5.7%
5.6%
3.0%
GENERIC RX
W/ INCREASES
20% TO 100%
GENERIC RX
W/ INCREASES
100% TO 500%
GENERIC RX W/
INCREASES 500%
TO 1,000%
GENERIC RX
W/ INCREASES
>1000%
Note: Percent of total Medicaid FFS generic prescription expenditures by percent of acquisition
cost change between July 1, 2013 and June 30, 2014
Source: IMS Health, Dec. 2014
FEBRUARY 2016
21
2/11/16 2:26 PM
Generics Report
Researchers tout generic savings
By David Salazar
The American College of Physicians recently published a clinical guideline in the Annals
of Internal Medicine that encouraged providers
to more widely prescribe generic medications.
The papers authors made a case that many in
the industry know well: If physicians prescribe
more generics, not only will patients and payers save money, but it might also have an impact on adherence.
In order to illustrate their case, researchers looked at several past studies concerning
generic-drug use and the potential benefit,
looking to examine how commonly generics
are prescribed, how that use influences adherence, evidence of similar clinical effects between
branded and generic drugs, barriers to access
and strategies to promote generics usage.
According to their findings, in 2001 more
than 40% of Medicare beneficiaries with heart
disease were taking brand-name medication.
More recently, in 2008, medications for which a
generic drug exists made up between 23% and
45% of dispensed prescriptions, depending
on the class a number lower than that seen
among patients in the Veterans Affairs system,
whose centralized formulary emphasizes generics use.
Beyond that, many doctors prescribe new,
brand-name medication in situations where
accepted guidelines find generic drugs sufficient. What the authors call guidelineconsistent prescribing has the potential to
save more than a billion dollars annually, they
said. The guideline also cited a paper that suggested Medicare alone could save $1.4 billion
every year just among diabetes patients if it
used both a generic-favoring formulary and
therapeutic interchange substituting less
expensive but more or less equally effective
medication in place of a branded drug.
A 2005 analysis of commercially insured
persons in the United States produced by a
large pharmacy benefits manager estimated
the potential cost savings of therapeutic interchange to be more than $20 billion annually, the guideline said. To put this into context,
$20 billion could provide Medicaid coverage to
more than 3.6 million presently uninsured per-
22 FEBRUARY 2016
022_GenericReport_2016.indd 22
$254
2013
2014
$213
$197
$161
$177
$135
$87
2005
$98
2006
$116
2007
2008
2009
2010
2011
2012
* In billions
Source: Generic Drugs Savings in the U.S. - Seventh Annual Edition: 2015, Generic Pharmaceutical Association
Note: Historic savings have been revised to include standard data restatements.
taking a statin, some of whom began the regimen with a branded drug, with others starting
with a generic statin. Those who started with
the generic had a 6% higher adherence rate.
But, the guideline also highlighted elements
that might stand in the way of making generic
drugs more widely used. In particular, it points
to differences among state laws surrounding
generic substitutions some have mandatory substitution of branded drugs with their
generic counterparts, whereas others require
pharmacists to consult with patients before
substituting generics and still others leave it
up to the pharmacists discretion. Besides that,
the authors noted perceptions of a lack of efficacy in generics, as well as skepticism about
generics that dont closely resemble the original product.
But the guideline urged wider prescription,
noting that even meager changes in prescriber behavior can have a big impact on the bottom line.
Given the large cost differences between
generic and brand-name medications, even
small incremental increases in the rate of generic dispensing are estimated to have important economic implications for both patients
and payers, the guideline said.
DRUGSTORENEWS.COM
2/11/16 4:34 PM
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