Center for Improving Value in Health Care
Dec 12, 2014 | 0 comments | Posted by Global Administrator
Health Reform, Price Transparency, Colorado All Payer Claims Database
When we think of filling our prescriptions with generic drugs, we generally consider them a low cost, equally effective alternative to a brand name medication. We’ve also heard about the power of generics to move the price of brand name drugs and lower prescription medication spending overall. A recent example of this is Lipitor. Lipitor (generic name Atorvastatin) is a widely used cholesterol lowering medication that became available in the last half of 2012 as a generic. The generic version provided a lower cost option at less than one third of the cost of the name brand Lipitor. CIVHC analysis of data from the Colorado All Payer Claims Database pre and post-introduction of the generic version of Lipitor shows that the price per day for the brand Lipitor also dropped substantially as a result of generic competition which provided consumers with more alternatives.
But what if what we thought we knew about generics was flipped on its head and prices for generic drugs were actually rising? According to recent news reports, this is exactly what is happening both in Colorado and nationally. As one example, we performed an analysis of price information in the Colorado APCD for Doxycycline Hyclate, a commonly used medication used to treat a variety of bacterial infections. In the past 18 months, the price per day for Doxycycline Hyclate has skyrocketed by more than 1000% in Colorado.
News outlets and consumers are not the only groups noticing this change. It has become an issue with physicians as well. When I spoke with Dr. Nathan Erdmann, an infectious disease physician who frequently prescribes Doxycline Hyclate, he indicated that rising prices for generic prescriptions is becoming a major issue. He noted that most physicians do not realize these price increases are happening. Instead, physicians write a script and send the patient to the pharmacy having no idea that the patient might be asked to pay $200. Those patients unable to afford to fill a prescription may opt to go without it, or they might purchase the drug at excessive cost when that may or may not have been the best alternative given the patient’s condition and price of the medication.
Nationally, efforts are under way to help address this emerging generic prescription drug price crisis. Senator Bernie Sanders (I-VT) and U.S. Representative Elijah E. Cummings (D-MD) launched an investigation into the issue in October of this year that culminated in a senate hearing November 20th at which pharmaceutical companies refused to testify. In response, Senator Sanders introduced legislation to extend the Medicaid Generic Drug Price Fairness Act to cover generic drugs. In Colorado, CIVHC continues to work with employers, providers and payers to determine how the sharp rise in generic drug prices is affecting the market. To determine how generic drug price changes may be affecting your organization, please contact CIVHC at ColoradoAPCD@civhc.org.
About the Author: Marcus Tuepker is CIVHC's Business Systems Analyst. Contact him at email@example.com.
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