Ending Pay-For-Delay Deals Could Raise over $5 Billion

Merrill Goozner

Posted 11/08/11 on Gooz News

The deficit reduction “super committee” charged with coming up with $1.2 trillion in budget reductions over the next decade shouldn’t let this one pass. The Congressional Budget Office today estimated that ending drug industry “pay for delay” deals with generic manufacturers will save the federal government over $5 billion over the next decade.

The “Preserve Access to Affordable Generics Act,” sponsored Sen. Herb Kohl, D-Wis., with eight co-sponsors, including two Republicans, requires that any deal between two companies that delays production of a generic drug after a patent has expired must show that the deal is “pro competitive,” which would effectively ban the practice. The Federal Trade Commission issued a report a year ago that found 66 of these deals reached over the past half decade were costing consumers about $3.5 billion a year.

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Prescription Drug Spending in 2012

Jane Sarasohn-Kahn

Posted 11/3/11 on Health Populi

growth in prescription drug costs covered by employers and Rx plan sponsors are driving them to adopt a long list of utilization management and price-tiering strategies looking to 2012, according to the 2011-2012 Prescription Drug Benefit Cost and Plan Design Report, sponsored by Takeda Pharmaceuticals.

The average drug trend for 2011 — that is, the average annual percentage increase in drug cost spending — was 5.5%, 1.5 percentage points greater than general price inflation of about 4%. The generic fill rate was 73% of prescription drugs purchased at retail. While drug price inflation is expected to increase in 2012, plan sponsors will implement several programs targeting enrollees who are most responsible for high cost and volume Rx consumption; the most popular programs will be disease management (to be used by 62% of plan sponsors), therapeutic substitution (50%), and outbound telephone calls (42%), retrospective drug utilization review (DUR, 40%), and face-to-face pharmacist consults (39%). Disease management and retrospective DUR both fell in use since 2010. Utilization management programs are also commonly integrated into prescription drug plan designs, with the most common tactics being prior authorization, quantity limits, and limits on “refills-too-soon.” Step therapy, too, is growing in use, particularly for medications treating depression, asthma, high cholesterol, and high blood pressure.

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Doctor, Don’t Dispense As Written

Kenneth Lin

First posted 7/12/11 on Common Sense Family Doctor

I’ve always favored prescribing generic drugs over handing out brand-name samples, since the latter, while initially “free” for patients, can actually be less effective and cost them more money in the long run. In fact, the only patient for whom I can remember routinely writing “Dispense as Written” (forcing the pharmacy to dispense the brand-name drug rather than the generic) on prescriptions was a special case: she insisted that I do so, because she believed that the brand-name worked better for her condition than the generic did. (And she may very well have been right, although she would have been a rare exception to the rule that generics are therapeutically equivalent to the brand-name drugs they replace.)

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The Patent Cliff, Coupled with Value-Based Purchasing, Make For A Declining Branded US PhRMa Market

Two mega-trends are driving down branded pharmaceutical sales in the U.S.: switches from branded to generic prescription drug products for major chronic conditions; and, the lack of new-new branded Rx products that (could) command higher prices.

A down-market picture emerges from The Use of Medicines in the United States: Review of 2010based on market data analyzed by the IMS Institute for Healthcare Informatics (IMS). While U.S. market growth for pharma overall ranges from 3% to 5%, IMS says, protected Rx brands were negatively impacted through the switch to cheaper generic substitutes. Generics now comprise 78% of pharma market share.

The key sentence in the report that underlies this dark snapshot is: “The number of patients starting treatment for a chronic therapy was down 3.4Mn from 2009 levels, and increasingly these patients are starting therapy with a generic drug.”

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Branded Prescription Drug Prices Increased Between 2006-2010 While Generic Prices Fell

Jane Sarasohn-Kahn

First published 3/15/11 on Health Populi

The Federal government covers about $1 in every $3 of spending on prescription drugs in the U.S. That equates to $78 bn of the total $250 bn spent on Rx in 2009. Between 2006 and 2010, the indexed cost of the usual and customary price for commonly used branded prescription drugs grew by 8.3%; in that period the price of commonly used generic drugs fell by 2.6%. The General Accounting Office (GAO), those nonpartisan bean-counters in Washington DC, analyzed pricing trends of prescription drugs over the most recent five years, based on changes from first quarter to first quarter in each subsequent year.

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