Generic prescription drugs face huge obstacles before they get approved for sale. It’s a big problem for the generic drug manufacturers — but, a potential a life and death situation to patients, when they can no longer afford their medication.
The price difference between generic drugs compared to branded drugs is huge! Don’t get shocked, but generic drug prices can be as much as 90 percent lower than the branded products.
This price gap translated into a $265 billion worth of increased consumer spending on drugs in 2017, according to estimates by the Association for Accessible Medicines.
That’s incredible — but it’s a fact. Unfortunately, many patients on fixed incomes, as well as senior citizens, many suffering from chronic disease, can’t afford these escalating costs.
The greater availability of generics is key to lowering the cost of drugs in the United States. That’s easier said than done, as there are many obstacles to bringing more generics to the market. Here are some of the problems.
Generic Prescription: Big Pharma Blocks Access
A generic drug needs the approval from the Food and Drug Administration (FDA). To obtain approval, the manufacturer must show that its drug is “bioequivalent” to the brand-name drug. This means that it works in the same way and provides the same clinical benefit as its brand-name version.
To prove this, companies need adequate samples of the brand-name drug to test. But Big Pharma withholds these samples — effectively blocking the generic companies from the market.
To fight this, there currently is a bipartisan Senate bill called the CREATES Act (Creating and Restoring Equal Access to Equivalent Samples), that would outlaw brand name drug manufacturers from blocking generic manufacturers.
Generic Prescription: Big Pharma Payoffs
Brand-name manufacturers sometimes pay generic companies to back off patent litigation or wait years to bring their version to market.
Provigil is a perfect example of a payoff. Patients take it for sleep disorders and fatigue caused by multiple sclerosis. A generic version was scheduled for sale in 2005, but Provigil’s manufacturer paid more than $300 million to block it from the market. Patients had no choice but to pay up to $1,200 a month for Provigil. Big Pharma was very happy, patients — not so much.
The Supreme Court ruled that these types of deals were subject to antitrust rules. Thereafter, the FTC cracked down, reaching a $1.2 billion settlement with Cephalon. And this year, so far in 2019, the FTC has settled three pending antitrust suits involving payoffs.
Consolidation in the generics industry is also responsible for high prescription drug prices. Tight profit margins and increased competition have reduced the number of manufacturers.
In addition, the negotiating power of the top three generic wholesalers has brought price cuts of about 11 percent per year. Since it takes many years of development and waiting for FDA approval, many generic manufacturers have left the market.
The big winner is Big Pharma, the big loser — patients with chronic illnesses. The Federal and State governments will have to step in.