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| DATE | 2017-08-07 |
| FROM | Ruben Safir
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| SUBJECT | Subject: [Hangout - NYLXS] Drug Price Kickbacks to insurance companies makes
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https://www.nytimes.com/2017/08/06/health/prescription-drugs-brand-name-generic.html?ref=todayspaper
Take the Generic, Patients Are Told. Until They Are Not.
By CHARLES ORNSTEIN and KATIE THOMASAUG. 6, 2017
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Photo
Nathan Taylor at his home in Tomball, Tex., just outside Houston, last
month. When Mr. Taylor fills his prescription each month for Adderall
XR, an attention-deficit medication, his insurance company refuses to
cover the generic version. Credit Scott Dalton for The New York Times
This article was written through collaboration between The New York
Times and ProPublica, the independent, nonprofit investigative
journalism organization.
It’s standard advice for consumers: If you are prescribed a medicine,
always ask if there is a cheaper generic.
Nathan Taylor, a 3-D animator who lives outside Houston, has tried to do
that with all his medications. But when he fills his monthly
prescription for Adderall XR to treat his attention-deficit disorder,
his insurance company refuses to cover the generic. Instead, he must
make a co-payment of $90 a month for the brand-name version. By
comparison, he pays $10 or less each month for the five generic
medications he also takes.
“It just befuddles me that they would do that,” said Mr. Taylor, 41.
A spokesman for his insurer, Humana, did not respond to multiple emails
and phone calls requesting comment.
With each visit to the pharmacy, Mr. Taylor enters the upside-down world
of prescription drugs, where conventional wisdom about how to lower drug
costs is often wrong.
Continue reading the main story
Related Coverage
Drug Lobbyists’ Battle Cry Over Prices: Blame the Others MAY 29, 2017
Generic A.D.H.D. Drug, Not Equivalent to the Brand, Is in Use Anyway
JUNE 16, 2015
The Selling of Attention Deficit Disorder DEC. 14, 2013
The Complex Math Behind Spiraling Prescription Drug Prices AUG. 24, 2016
Recent Comments
Frank McNeil 6 minutes ago
This is one of the best arguments yet for single payer Medicare for All,
to negfor legislatively requiring MEDICAID to negotiate...
R. 14 minutes ago
We really do need more investigative articles on this topic of bait and
switch tactics carried out in unison, not only by the covert...
kim 14 minutes ago
Is it time for a single payer system for pharmaceuticals?
See All Comments Write a comment
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Consumers have grown accustomed to being told by insurers — and
middlemen known as pharmacy benefit managers — that they must give up
their brand-name drugs in favor of cheaper generics. But some are
finding the opposite is true, as pharmaceutical companies squeeze the
last profits from products that are facing cheaper generic competition.
Out of public view, corporations are cutting deals that give consumers
little choice but to buy brand-name drugs — and sometimes pay more at
the pharmacy counter than they would for generics.
The practice is not easy to track, and has been going on sporadically
for years. But several clues suggest it is becoming more common.
In recent months, some insurers and benefit managers have insisted that
patients forgo generics and buy brand-name drugs such as the cholesterol
treatment Zetia, the stroke-prevention drug Aggrenox and the
pain-relieving gel Voltaren, along with about a dozen others, according
to memos and prescription drug claims that pharmacies shared with
ProPublica and The New York Times. At the same time, consumers are
sounding off on social media.
Now it appears the practice is spreading to biosimilars, the competitors
for expensive, complex biologic drugs that are beginning to arrive on
the market.
Consumers have become increasingly angry over what they pay for drugs,
and that outrage has caught the attention of lawmakers from both
parties. Democrats have identified lowering drug prices as a pillar of
their economic agenda, and President Trump has raised the issue
repeatedly. But for now, solutions have proved elusive.
Photo
Dr. Lawrence Diller, a behavioral pediatrician in Walnut Creek, Calif.,
said he began noticing “very odd things” going on with Adderall XR and
other attention-deficit drugs about two years ago. Credit Jim Wilson/The
New York Times
The continued success of the brand-name drug Adderall XR, long after
generic competitors arrived on the market, is a case in point.
Dr. Lawrence Diller, a behavioral pediatrician in Walnut Creek, Calif.,
said he began noticing “very odd things” going on with Adderall XR and
other attention-deficit drugs about two years ago. He began receiving
faxes from pharmacies telling him that he had to specify that patients
required brand-name versions of the drugs.
He had been practicing for 40 years, but until then had never had a
pharmacy tell him that he had to prescribe a brand-name drug instead of
a generic.
“It’s Alice-in-Wonderland time in the drug world,” he said.
Some insurers require members to have prescriptions filled with
brand-name drugs and do not charge them more than for generics. But 29
percent of Americans with health insurance paid for by their employer
have a high-deductible insurance plan. They acutely feel the cost
difference between branded and generic drugs because they often have to
pick up the full sticker price of medications until they have paid out
thousands of dollars.
Naomi Freundlich, a Brooklyn writer, had been buying the generic version
of Adderall XR for two years to treat her son’s attention-deficit
hyperactivity disorder. Her family had a $3,000 annual deductible, and
the relatively lower price helped keep medical costs down.
Then, in 2014, her pharmacist told her that her insurance plan would
cover only the brand-name drug, which cost her family some $50 more a
month than the generic. If she paid for the generic herself, it would
not have counted toward her deductible. Ms. Freundlich complained to her
insurer, UnitedHealthcare, but could not get a clear answer.
“It’s hard to explain because it doesn’t really make sense,” she said.
UnitedHealthcare has continued to favor Adderall XR and certain other
brand-name drugs over generics, according to claims provided by
independent pharmacists and reviewed by ProPublica and The Times. The
insurer also recently told health providers that it preferred Remicade,
the expensive rheumatoid arthritis drug made by Johnson & Johnson, over
biosimilars that have a lower list price and are just beginning to come
on the market.
A spokesman for UnitedHealthcare, Matthew N. Wiggin, said the insurer
does at times prefer brand-name drugs. “By providing access to these
drugs at a lower cost, we are able to improve affordability for our
customers and members,” he said in an email.
Asked whether consumers sometimes ended up paying more because of these
choices, he said pharmacies and doctors could seek an exemption from the
insurer if they wanted the generic instead. Several patients said they
had not been told of that option.
Shire, the maker of Adderall XR, and some other brand-name drug
manufacturers are no longer content to allow sales of their products to
plummet when generic competitors arrive on the market. Instead, they are
negotiating deals with insurers and pharmacy benefit managers to give
priority to their versions. Consumers are given no details about these
deals.
A Shire spokeswoman said the company had been able to hold on to market
share for Adderall XR by offering insurers and government programs
prices that are competitive with those of generic manufacturers.
Adderall XR, the long-acting version of Shire’s popular treatment
Adderall, had for years been the company’s top-selling product, bringing
in $1.1 billion in sales in 2008, about one-third of its revenue that year.
Have You Had Difficulty Paying for or Obtaining Prescriptions?
The New York Times would like to hear from people about their
experiences paying for prescription drugs.
But mindful that its blockbuster could soon face generic competition,
Shire acted aggressively to protect its franchise.
First, in the mid-2000s, Shire sued generic drug companies to block them
from bringing cheaper copies to the market, alleging patent
infringement. Then, it made deals with two makers of generic drugs to
sell authorized copies of its drug, a tactic in which the branded
manufacturer supplies its product in exchange for a share of royalties.
Those agreements soured after the two companies, Teva Pharmaceuticals
and Impax Laboratories, accused Shire of not playing fair by failing to
supply them with enough pills to compete in the marketplace. More
lawsuits ensued, followed by settlements.
Then, a few years ago, Shire tried a new tactic: giving ever-larger
discounts to pharmacy benefit managers and insurers for preferential
treatment over the generics. That did not mean lowering the list price
of the drug, but rather negotiating rebates that were paid not to the
patients but to insurers and middlemen such as CVS Caremark.
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Benefit managers and insurers have been passionate advocates of generic
drugs, arguing that the cheaper products save patients and their
employers billions of dollars. Indeed, generic drugs have come to
dominate the market, and today account for nearly 90 percent of all
prescriptions filled in the United States.
Shire has managed to hold on to a much larger share of the market
through its deals than most companies do when their drugs come off
patent and face generic competition.
Adderall XR, the brand-name version of extended-release mixed
amphetamine salts, accounted for 29 percent of the 13.1 million
prescriptions for the drug in 2016, according to QuintilesIMS, a health
information company that purchases the data from pharmacies and sells it
to clients that include drug companies. The average market share of
brand-name products dwindles to less than 6 percent two years after the
first generic competitor arrives, according to QuintilesIMS.
The list price of Adderall XR has remained $7.12 per pill since
mid-2012. But according to data from SSR Health, a research firm that
tracks drug prices, the portion that Shire keeps has steadily declined.
In the first quarter of 2017, SSR estimated that Shire kept only $1.73,
down from $2.93 per pill in the first quarter of 2013. Shire does not
break out how much it pays to each middleman in the system, from
distributors to pharmacy benefit managers.
But Ryan Baum, an analyst at SSR Health, said it was clear that Shire’s
declining share of the list price reflected “just a really aggressive
instance of trying to hang on.”
“It’s irrefutable, really,” he added.
In contrast, the generics cost as low as $3.89 per pill, but that does
not include unspecified concessions that generic makers offer to
pharmacies and distributors, according to Truven Health Analytics,
another research firm that tracks the prices wholesalers pay for drugs.
A spokeswoman for Shire, Gwendolyn Fisher, said that while Shire did not
make decisions about how much patients paid in out-of-pocket costs,
“Shire is helping to deliver cost savings to the system and greater
patient access to an important medicine.”
Shire said last week that it was considering spinning off the portion of
its business that sells attention-deficit drugs in order to focus on
developing rare-disease treatments.
Photo
Lisa Hopkins of Eagleville, Pa., was required to buy the brand-name
anti-inflammatory gel Voltaren, rather than the cheaper generic. Credit
Mark Makela for The New York Times
Generic drug makers say they have seen an increase in efforts by
manufacturers of brand-name drugs to fight to retain sales after they
lose patent protection.
“You definitely see a much more aggressive posture than you used to
see,” said Christine Baeder, senior vice president for customer and
marketing operations at Teva, the world’s largest generic drug manufacturer.
In December, CVS Caremark, one of the largest benefit managers, sent a
memo to pharmacies informing them that some of its Medicare prescription
drug plans would cover only brand-name versions of 12 drugs. Some of the
drugs, such as the antipsychotic medication Invega, have had generic
competitors for over a year.
Also on the list was Copaxone, a brand-name drug sold by Teva that
treats multiple sclerosis and that recently lost patent protection on
its daily injection. Though Teva primarily makes generic drugs, in a
twist it has taken a page from brand-name manufacturers to preserve
sales of one of its key products.
In a statement, Teva said many patients had moved to its
three-times-weekly version of Copaxone, for which there is no generic,
but said it wanted to ensure that patients who “wish to remain on
therapy continue to have access.”
Consumers taking other medications said they had experienced the same
phenomenon. Lisa Hopkins, a disabled food and nutrition supervisor in
Pennsylvania, went to fill a prescription for the anti-inflammatory
Voltaren gel this year.
Ms. Hopkins, 52, said her pharmacist had told her that her drug plan,
CVS’s SilverScript, denied her claim because it was for a generic.
“I said to the lady at the insurance company, ‘That’s really, really odd
to me,’” Ms. Hopkins said. “She said: ‘Yes. It’s happening more and more
that the name brand is covered but the generic isn’t.’”
Ms. Hopkins has osteoporosis and bulging spinal disks and has been on
disability for almost a decade. She is covered through Medicare and
receives extra help from the government for her medications, lowering
her out-of-pocket costs. That means that when her drugs cost a lot,
taxpayers pay the bill. By law, Medicare cannot negotiate directly with
drug manufacturers and instead gets a share of any rebates collected by
insurers and benefit managers, like CVS Caremark, which operate
Medicare’s drug plans.
In an email, a spokeswoman for CVS Caremark, Christine Cramer, said
consumers never pay more in the rare instances in which the company
favors a brand-name drug over a generic. “This generally occurs when
there is limited or no competition among generics,” she said.
Pharmacists say they are noticing the trend, too, and it takes time to
understand the denied claim and pursue a remedy, including sometimes
calling the doctor. While favorable treatment for a brand-name drug
doesn’t happen all the time, it is startling when it does, said Robert
Frankil, president of Sellersville Pharmacy Inc. in Pennsylvania, which
owns two pharmacies.
“There’s only one reason why they’re requiring you to use a more
expensive product,” Mr. Frankil said. “Because somewhere down the road,
somebody is earning more money.”
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