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Caution - Generics Can Cost You More Than Brand Name Drugs!

Updated on August 8, 2013

Why you can no longer assume that generics are cheaper

You can always save money by asking for the generic equivalent of a brand name drug – right? Well, not necessarily. Back in 2011 I received a huge shock when my husband got a prescription filled for generic Lipitor (Atorvastatin). We carry United Health Care for our part D prescription drugs. I was delighted to see that Lipitor had gone generic, since my husband's doctor had recently switched him from generic Zocor (Simvastatin) to Lipitor. Imagine my surprise when I saw the price tag on the generic - $42 a month instead of the usual $7.00 range that we pay for a generic brand.

The same thing happened in 2012 when Plavix went generic. My husband had been on Plavix for years, and it was painfully expensive. We rejoiced when we heard that it would be offered in a generic form in 2012. Before we got his prescription filled, I thought that we'd better call to check on the price, given what happened to us with generic Lipitor. Sure enough, we were told that our health care plan would charge us $70.00 for a 30 day supply of clopidogrel since we are in the doughnut hole. This drug sells on the open market for as low as $15.00 for a 30 day supply. Apparently our drug plan didn't do a very good plan at negotiating the price, or once again they have made a deal with the drug manufacturer to falsely elevate the generic drug price for awhile, and will bring it down in six months. Whatever the deal is, I can buy it cheaper over the counter than through our health care plan. What is wrong with this picture?

Deals Are Being Cut

It ends up that Pfizer, the maker of Lipitor, cut deals with a large number of health care companies. Until May 31st 2011, many plans did not cover the generic at all and others charged as much if not more money for the generic. In my case, the generic was the same price as the brand name. AARP's January-February Bulletin's article, Lipitor Maker Cuts Deals, called this an unprecedented campaign to get patients to take Lipitor instead of the generic.

A Consumer Reports article places part of the blame on complex laws that govern pharmaceutical patents. Drug manufacturers have successfully filed lawsuits that challenge the patent, giving them a six month exclusive right to sell the drug. In addition, the market doesn't open up to competition until other manufacturers can start making the generic drug. The other culprit is Medicare's agreement with these companies. By cutting deals with manufacturers, the cost of the brand name appears to be cheaper than the generic. However, the total cost of the brand name drug is applied towards the doughnut hole, which drives you towards the maximum very quickly.

Because of this situation, the article states that it could take up to a full year before the cost of a generic is cheaper than the brand name.

Is This Fair?

I believe that is unfair for a drug company that has already made huge profits to manipulate prices in their favor. Once they have lost the patent on a drug, cheaper priced generics should be accessible to the public without interference. The Senate's Finance Committee and the Special Committee on Aging agreed with this. They were investigating the issue in 2011, and asked Pfizer for details of the deals that they cut. According to the Finance Committee's chairman Max Baucus (D-Montana), these deals “may be abusing Medicare to boost their profits and denying generic alternatives to patients”. However, I haven't been able to find any updates or concrete results from this investigation. What is actively being pursued is another issue called "pay to delay" deals, where brand name drug companies pay off generic manufacturers to delay them from entering the market. This is actually going to the supreme court in the spring.

What Can We Do? I will be calling my Congressional representative to complain about this situation, and I hope that others will do the same. In the meantime, before I have a prescription filled I will be sure to compare the price of the generic to the brand name. I can no longer assume that the generic is the cheaper alternative.

© 2012 Margaret Perrottet


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    • mperrottet profile image

      Margaret Perrottet 4 years ago from Pennsauken, NJ

      ignugent17 - Glad you found this hub interesting - thanks for stopping by and taking the time to comment!

    • mperrottet profile image

      Margaret Perrottet 4 years ago from Pennsauken, NJ

      rajan - Generics are cheaper in the U.S. too, but sometimes it takes up to a year for the price of generics to come down because of the deals that are being made with health care providers. Thanks so much for reading and sharing - always good to see you!

    • profile image

      ignugent17 4 years ago

      Very useful hub. Thanks for sharing.

    • rajan jolly profile image

      Rajan Singh Jolly 4 years ago from From Mumbai, presently in Jalandhar,INDIA.

      This is strange. Over here generic drugs are much cheaper than the branded ones.

      Interesting read. Voted up and shared.

    • mperrottet profile image

      Margaret Perrottet 4 years ago from Pennsauken, NJ

      Au fait - I'm with you. I think that a single payer system would have been a better solution than what we ended up with, and I think that Medicare should negotiate the prices of drugs rather than letting drug companies negotiate with health care plans. Thanks so much for reading and commenting.

    • Au fait profile image

      C E Clark 4 years ago from North Texas

      I favor universal healthcare for all, but I object to there being no cost controls included in Medicare, Prescription drugs, and ObamaCare. Medical care is just as important as clean air and clean water and I think there should be no profit built into clean water, clean air, or necessary medical care. Profit can be built into electives, but should not be included in those things necessary to a healthy life.

    • mperrottet profile image

      Margaret Perrottet 5 years ago from Pennsauken, NJ

      I'm always very careful now to check on the cost of a generic when it first comes on the market. As far as I'm concerned, the whole issue of negotiating drug prices needs to be addressed. I think that Medicare prices should be negotiated by Medicare, and not the private insurance companies. Thanks so much for reading and voting - glad you found it useful.

    • ktrapp profile image

      Kristin Trapp 5 years ago from Illinois

      Wow - This is eye-opening information. I had no idea this was even going on. The medication I take regularly is actually made by the pharmaceutical company my husband works for, so I get it for free. But I will keep my eye on this. Just unbelievable is all I can think--most definitely unfair. Voted up and useful.

    • mperrottet profile image

      Margaret Perrottet 5 years ago from Pennsauken, NJ

      Thanks for the kind words and for taking the time to read, tillsontitan!

    • tillsontitan profile image

      Mary Craig 5 years ago from New York

      Your information is not only useful but vital for us as we age. Some things just don't seem to make it into the news so we need people like you to keep us informed! Thank you.

      Voted up and useful.

    • shiningirisheyes profile image

      Shining Irish Eyes 5 years ago from Upstate, New York

      The amount of money the put on such an important requirement is a crime in my book. This was an excellent article. I hadn't realized this and showed my 84 year old mother.

    • smartincome profile image

      Lor M 5 years ago from Philippines

      Great advice! Voted this up and useful. :)

    • mperrottet profile image

      Margaret Perrottet 5 years ago from Pennsauken, NJ

      My husband is a diabetic on Medicare, and we pay for a Part D prescription plan. When the cost of a drug is very high, we not only pay a high copay, but it pushes him into the doughnut hole very quickly. At that point we have to pay full cost of a prescription. You are very lucky that your costs are covered, as it can really be painful on a retirement income.

    • kathryn1000 profile image

      kathryn1000 5 years ago from London

      It's good to know this.Thank you.Luckily here I get free medicines as we have the NHS.Older people get it all free.

      also people with diabetes and suchlike illnesses too.

    • LoriSoard profile image

      LoriSoard 5 years ago from Henryville, Indiana

      The cost of medicine is out of control. Lots of good advice in this hub.