Managed Care - January 2009 - (Page 9)

MEDICATION MANAGEMENT Generic Drug Price War Begins To Benefit Insurers Steep discount programs encourage health plans to reduce, or even eliminate, copayments By Martin Sipkoff rice wars involving generic drugs are widespread, affecting insurers, retail outlets, pharmacies, and consumers. Although consumer and insurer attitudes about the value of generics have become increasingly positive in the last couple of decades, the pricing of generics was never truly competitive until 2008. No one apparently foresaw that retailers and insurers would use them as marketing tools. “Competitive pressure among large retailers is making generics available at increasingly lower prices, a somewhat surprising market development,” says Murray Aitken, senior vice president of the Healthcare Insight unit at IMS Health. “This intensifies competition among generic drug manufacturers and leads them to cut prices even further.” Generic copies of brand-name blockbusters that lost patent protection can be manufactured by dozens of companies and marketed after the 180-day exclusivity period that is enjoyed by the first company to receive FDA approval to market a specific generic drug. But until retailers started using low generic prices to draw customers into their stores, copayments were fairly stable at about $10, no matter the manufacturer or the pharmacy. And when retailers began using generics as a lossleader to attract customers, generics manufacturers began competing, lowering their prices to attract the retailers that were buying in bulk. In 2008, the competition became truly fierce. According to IMS, pricing pressures have forced down dollar sales of generic drugs in this country by 2.7 percent in the year ending in September, even though the number of generic prescriptions filled increased by 5.4 percent in the same period, accounting for nearly 64 percent of all prescriptions filled as of September. Contributing Editor Martin Sipkoff is a long-time health care journalist. P IMS reports that U.S. generic sales dropped from $34 billion in 2007 to $33 billion in the year ending in September. This trend may well continue as generic versions of big-selling drugs continue to hit the market. Between now and 2012, brand-name drugs with $139 billion in international annual Big name drugs going off patent S ome top-selling drugs recently have lost or soon will lose patent protection and face generic competition. Here is a list of the biggest sellers. (Note that litigation can mean some dates are estimates and can change.) 2008 Fosamax, osteoporosis Imitrex, migraines Protonix, severe heartburn Risperdal, schizophrenia/bipolar disorder 2009 Prevacid, severe heartburn Topamax, migraine prevention/epilepsy Valtrex, herpes 2010 Cozaar/Hyzaar, high blood pressure Flomax, overactive bladder 2011 Actos, diabetes Aricept, Alzheimer’s disease Effexor XR, depression Levaquin, bacterial infections Lipitor, cholesterol 2012 Lexapro, depression Plavix, blood thinner Seroquel, schizophrenia/bipolar disorder Source: Medco Health Solutions JANUARY 2009 / MANAGED CARE 9

Table of Contents Feed for the Digital Edition of Managed Care - January 2009

Managed Care - January 2009 Editor's Memo Contents Legislation & Regulation News and Commentary Medication Management Compensation Monitor Health Care's Disruptive Innovations Q&A With Clayton Christensen 'Disruption' May Be Plans' Best Bet Avoid the PBM Rebate Trap HealthPartners Puts Diabetes on Notice Formulary Files Plan Watch Tomorrow's Medicine Ad Index Outlook Unmet Needs in the Management of Plaque Psoriasis Impact of RSV: Implications for Managed Care

Managed Care - January 2009

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