Caution - Generics Can Cost You More Than Brand Name Drugs!
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.
My Related Hubs on Health Care, Drugs and Insurance
- Why Isn't There A Generic Insulin?
Many patents on insulin have run out years ago, and more will be expiring soon. Does this mean that a generic form of insulin is on the horizon?
- Why Are Medical Costs So High In The U.S.A.?
The United States spends significantly more money on health care than the rest of the developed nations. This article examines why the U.S.A. has such high medical costs.
© 2012 Margaret Perrottet