Medicare Part D Spending Down By $6B As Generic Drug Use Grows
Main Category: Medicare / Medicaid / SCHIPAlso Included In: Pharma Industry / Biotech Industry
Article Date: 03 Nov 2008 - 12:00 PDT
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Medicare prescription drug benefit spending in fiscal year 2008 totaled $44 billion -- $6 billion lower than estimated -- as the program experienced lower-than-expected enrollment, more use of low-cost generic drugs and beneficiaries reducing drug spending to avoid the program's "doughnut hole," USA Today reports.
According to USA Today, the drug benefit program in the last fiscal year had two million fewer participants than originally predicted because fewer low-income people enrolled than expected and some Medicare beneficiaries have elected to keep their existing drug coverage. About 32 million beneficiaries have enrolled in the drug benefit. Meanwhile, generic prescription drugs accounted for 64% of all Medicare prescriptions in FY 2008, compared with 61% in the private sector.
The drug benefit program has cost about one-third less than expected since it launched in January 2006. When the drug benefit began, the Congressional Budget Office predicted it would cost $74 billion annually by 2008.
According to USA Today, Medicare drug costs are expected to rise by 2011 "as early savings fade" and the first of 79 million baby boomers start the program (Cauchon, USA Today, 10/31).
Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.
© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.
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A Refreshing Alternative
posted by Dan on 3 Nov 2008 at 1:16 pmThe Benefits of Generic Medications: Is the Efficacy Really There?
More now than in the past, generic medications have been encouraged by prescribers at a much higher rate due to the problem of the high cost of branded meds that many find unfair and unreasonable. Branded meds are still prescribed often, though, mainly due to samples of such meds provided at a doctor’s office from the sales reps who promote these meds. Generics typically are not sampled due to lack of funds compared with branded pharmaceutical companies. Yet generics cost a small fraction, such as a third of the cost of branded medications in certain cases, and yet are therapeutically equivalent. Yet not all branded meds have a generic formulation due to patent exclusivity and therefore cannot be produced until the expiration of this patent of the branded med.
Most recently, certain managed health and prescription providers have been actually paying doctors to initiate if not switch their patients to generic medications, if possible. This may be due to a reaction caused by branded pharmaceutical companies offering similar inducements, yet the companies paying doctors is remarkably legal, and therefore allowed to occur.
Not long ago, generic meds were not prescribed that often, or produced to a great degree, because of the cost of bringing such a med to the market, which at the time required the same protocols as branded meds. Fast forward to 1984, as this is when the Hatch-Waxman Act was introduced, and this Act only required generic meds to demonstrate bioequivalence to the branded med that they desire to reverse engineer, and nothing else included in the approval process that is required by branded medications to be completely developed and approved by the FDA. This reduced cost of generic production allowed for more of these meds to saturate the pharmaceutical market, and doctors started prescribing more generic meds as a result.
Branded pharmaceutical companies were not pleased in large part with this new act, so they devised schemes to extent the patents of their branded meds through such tactics as reformulation, which is called evergreening, of their meds, which allows for them to continue the lifespan of their branded medication. Also, such tactics implemented by pharmaceuticals, such as frivolous patent infringement lawsuits, which delays generic availability for a longer period. Also, branded pharmaceutical companies have been known to actually pay generic manufacturers to not release the equivalent of a branded medication.
Yet pharmacies support generic use, as they make more money off of generics compared with branded meds. So delays will not prevent the utilization of generics, overall. Generics seem to remain a concern to branded companies in spite of their efforts of avoiding their access, as branded companies have progressively started producing their own generic meds along with their branded ones due to the increased use of generics, or have acquired generic pharmaceutical companies entirely.
Also, other reasons for increased generic prescribing may be due to the awareness and clinical experience of the previous branded med that has been replicated by the generic medication. Newer drugs at times are not a desirable choice of treatment for patients because of lack of confidence- with possibly safety being the main concern with some prescribers. So the familiarity of a generic equivalent of a known med creates a more reassuring choice for the prescriber. Available generics are listed in what is called an orange book. It should be available to all health care providers for their access.
Most encouraging for even greater use of generic meds is that at least one company has created vending devices for doctor’s offices for dispensing both generic and over the counter meds. This may discourage the use of branded equivalent meds at a greater amount with generic samples available as well as the branded meds. In addition, and in some cases, doctors can order generic samples from the manufacturers. I consider this device rather innovative.
Yet some doctors insist that you get what you pay for, so they are convinced that branded meds are always more efficacious and tolerable than generic meds. This misconception is a fallacy, since both forms are identical from a bioequivalence and bioavailability paradigm, as required for approval. I’m sure it’s possible others have encouraged such doctors to take such a stance void of fact and reason. Yet there may be some truth to decreased efficacy of generic meds over their branded equivalents.
Considering the health care crisis in our country and the over-priced treatment methods in our health care system, such as with branded pharmaceuticals, generic medications should be considered when clinically appropriate for the benefit of those seeking restoration of their health. It would beneficial for patients to become aware of this pharmaceutical system and request generics when being prescribed a med by their health care provider. In other words, they should question authority figures such as doctors are perceived to be, as patients definitely have a right to acquire knowledge and use this for their benefit with situations as their choices for treatment options, as this will be for their financial benefits while improving their well-being with generic medications- an ideal way to reduce health care costs and improve compliance with their meds because generics are an affordable asset to public health.
“What good fortune for those in power that the people do not think.” --- Adolph Hitler
Dan Abshear
Authors note: What has been composed above is based upon information and belief
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