Generic Drug Price Inflation: It’s Personal

By Lauren Flynn Kelly - December 12, 2014

One of the hottest pharmaceutical topics in recent months has been generic drug price inflation. Half of all retail generic drugs rose in price over the last year, according to Drug Channels. Sen. Bernie Sanders (I-Vt.), chairman of the Senate Subcommittee on Primary Health and Aging, has attempted to take the makers of pricey generic drugs to task — through letters demanding information on their “skyrocketing” prices and a Nov. 20 subcommittee hearing at which three invited drug companies failed to appear.

In the letters issued to 14 generic pharmaceutical manufacturers on Oct. 2, Sanders and Rep. Elijah Cummings (D-Md.), ranking member of the House Committee on Oversight and Government Reform, cited data from the Healthcare Supply Chain Association showing price increases of 300% or more in recent months for 10 generic drugs. One of those drugs was albuterol sulfate, which is used to treat asthma and other lung conditions. The average market price for a bottle of 100 pills was $11 in October 2013 and jumped to a whopping $434 in April 2014, pointed out the concerned congressmen. During the Sanders hearing, Cummings revealed that he takes this very drug, and vowed to “fight this issue until I die.”

Scott Gottlieb, M.D., a resident fellow at the American Enterprise Institute who most recently served as deputy commissioner for medical and scientific affairs at the FDA, suggested to Congress that most of the generic drugs experiencing high cost increases are “low-volume drugs.” In order to get a more accurate picture of what’s happening, lawmakers and others trying to address the problem need to adjust the price increases based on prescription volume, he suggested.

But a handful of high-volume drugs have experienced dramatic increases, which should be of concern to payers. According to Evercore ISI’s Generic Drug Price Inflation Tracker tool, levothyroxine was one of those outliers in 2013, when it rose in price by 58.3%. I rely on this pill every day to regulate my underactive thyroid and was disappointed when it moved from many retailers’ $4 generic lists to the $10 lists. Not a huge hardship, but it adds up when you’re being asked to pay higher prices for more than one generic at a time.

During the Sanders hearing, witnesses discussed various factors that could be pushing up prices (such as shortages), but one they kept coming back to was the backlog of more than 3,000 generic drugs awaiting FDA approval. Hmm…one of those must be Nasonex (mometasone furoate), which I’ve found to be the most effective nasal spray for seasonal allergies and was supposed to go generic this year. Instead of telling everyone to go get this year’s ineffective flu shot, maybe HHS should be pushing the FDA to work a little faster on those unapproved generics.

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