My wife was recently prescribed a strong opiate painkiller, Dilaudid, and I was astonished that the price was nearly $800 for a supply of 300. The pharmacist said he’d check on whether he could get the generic.
But Dilaudid has been around since 1926, so Wikipedia informs me. Shouldn’t it be off patent by now? Is it not off patent because it was invented in Germany and patents last longer there? Or is it expensive because the supply of legally imported opium, from which I assume it’s made, runs short and it takes a lot of red tape and hoops for the manufacture to get more?
Nothing to do with patents. I had a similar experience with generic penicillin recently. You’d figure an old drug like that would cost maybe half a buck or so per pill. Instead it was between $3 and $4 depending on which pharmacy I went to.
The main reason is because prescription drugs do not follow the ordinary laws of supply and demand. There’s probably several reasons for this but insurance is the chief culprit. The fact that insurance pays for most or all of the cost of prescription drugs means the consumer has no incentive to shop for the best prices. Hence there’s no presure on the pharmaceutical companies or pharmacies to compete on price. So drug prices never go down, they always go up.
Here’s an example. About thirty years ago, they came out with a new wonder drug for treating ulcers: Tagamet. Ulcers are a common ailment and they set the price fairly high ($1 to $2 per pill, which was quite high in those days) so they were really raking in the dough.
Several years later, other drugs were introduced that did essentially the same thing as Tagamet. They were slightly better, so they took a lot of Tagamet’s market share away. So what did the makers of Tagamet do? If this were in any marketplace but prescription drugs, they’d lower the price to regain their market share. But this was a prescription drug, so of course they raised the price to make up for the lost profit.
Today all these ulcer drugs have non-prescription forms and the prices are quite reasonable. Brandname forms can be found for something like 25 to 30 cents per pill while generic are about half that. True, the strength of the OTC forms are about 1/3 that of the prescription forms, but they’re still a bargain compared to the prescription prices.
Insurance companies have tried to fix this by instituting copays for drugs, but they usually don’t do it right. Generally there’s a fixed amount for the copay or perhaps two amounts, one for non-generic and one for generic. That doesn’t really bring the cost of the drugs home to the consumer. They pay the same copay no matter if the prescription costs $50 or $5000. Or perhaps they pay $10 for one and $25 for the other. Not enough to really make a difference. Instead they should have the copay be a percentage of the total price. Then there will be some feedback to the drug makers/pharmacies about price.
BTW, all this applies only to the US. AIUI, pretty much every other country has price controls of some form or another on prescription drugs.
In the past few years it is actually becoming more and more common to make co-pays a percentage rather than a flat rate… however, I am not aware that this has had any impact on drug prices. After all, the end “consumer” (that is, patient) doesn’t really shop for drugs, it is the doctor who chooses for them and frequently doctors haven’t a clue what the real cost of these things are, since they do not pay the bill there is no incentive for the doctors to consider price.
I’d like to mention that you really want doctors to choose treatments based on what’s best for the health of the patient, not what’s best for their wallet.
Case in point, my grandmother-in-law was taking Boniva to prevent osteoporosis. Expensive, since it wasn’t covered by her insurance, but she was handling the medication well. Her doctor switched her to Reclast, the once a year IV osteoporosis medicine, because it was covered by her insurance. I assume her insurance also covered the 4 week hospital stay and dialysis that became necessary because her kidneys shut down.
I’m much more in favor of the flat copay, let the insurance companies haggle with the pharmaceutical companies over price. I’m also in favor of instituting price controls like practically every other country has. It’s a joke, we had a Presidential Candidate (Kerry) actually propose opening up the border with Canada for prescription drug purchases, so that our citizens could take advantage of Canada’s price controls. Canada’s government has a law that lowers drug prices, instead of having our own law to lower our drug prices, we’ll just buy drugs from them… right.
I would gladly shop for price in prescription drugs only there doesn’t seem to be any way to do so with my insurance drug plan. I can take my prescription to pharmacy A and they have to process the prescription as if they are filling it to give me a price, a process that takes 20 minutes. Next, I have to take it to Pharmacy B and start the whole process over. Recently, someone told me that under my drug plan all pharmacies should have the same price for my meds, but I don’t know if that is true.
I actually expected it to be about a nickel per pill, or less. Since Dilaudid is such an old drug, I thought it would have commonplace pricing, notwithstanding the fact that it is a strictly controlled substance. I’m on a med myself that is equally strictly controlled, and it seems to cost far less, although I should point out that the $3/Dilaudid price above is without insurance, while I’ve been buying mine with insurance. Our insurer will cover the dilaudid in a few days, so I’m sure it’ll be a lot cheaper than, and fortunately my wife has other painkillers she can use in the meantime.
But what’s the point of maintaining the brand/generic distinction in something that’s been on the market for 82 years?
Is there any clinical difference between the brand name and generic here–e.g., does the brand name have an extended release mechanism that the generics don’t?
First off, as you know, many name-brand consumer products have generic counterparts that are not remarkably different from each other, and yet still some people prefer name brands. Some people simply believe that generic = inferior.
Second off, as I understand it, generics may contain the same active ingredient and be proven to be equally effective but still differ in some detail of formulation that matters to some patients but not others.
I wouldn’t downplay the role that regulatory stuff plays as far as cost. Years ago, Ketamine (an injectable anesthetic) was pretty cheap. I bought a case when a salesman warned me it was becoming Schedule III controlled substance. Sure enough, once the new labels were on, it tripled in price.
In my experience, this is particularly true for timed release formulations. They may have the same active ingredient, but the release profile may be slightly different. I had one medication that I carried around with me because I habitualy forgot to take it in the morning. When the pharmacy changed generics, the pills started disintegrating in my bag.
I would guess for mosrt meds there is no difference. This is a big problem for drug manufacturers. Research for new drugs costs major bucks and they don’t always make up that money by the time the patent runs out. This is especially true with antibiotics, where literally the more you use the drug, the more resistance there is to it. You caqn either push doctors to prescribe the drug and make money, or sit on it and wait for your patent to run out. Often, I think the prices for other drugs are set to make up for the lost money on money losing drugs.
The same point as a brand/generic that’s been on the market for less time: Money. Brands are still worth something, even if the generic has been around almost as long. People still pay a premium for Bayer Aspirin even though ASA has been around for over 100 years. Whatever company makes the brand name Dilaudid can still pay more for advertising and there’s probably still some institutional memory (ie, young doctors who trained under older doctors may have inherited the older doctors’ knowledge of certain brand names) or inertia that keeps sales up.
Note that your wife was prescribed the brand name, and is likely paying more for it.