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Generic oral chemotherapy less cost-effective than anticipated
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A generic version of orally administered capecitabine returned less-than-anticipated cost savings over a 3-year span, according to study results published in JAMA Internal Medicine.
In addition, list prices of branded and generic capecitabine continued to rise during the 14-year study, researchers reported.
“Since around 2000, treatment of many cancers has shifted from infused chemotherapies to orally administered cancer therapies,” Ashley L. Cole, MPH, doctoral student and graduate research assistant at University of North Carolina Eshelman School of Pharmacy, told HemOnc Today. “These newer therapies tend to be much more expensive, including higher cost-sharing for patients.”
Capecitabine — a thymidylate synthase inhibitor initially manufactured by Genentech for the treatment of metastatic colorectal and breast cancers — received FDA approval in 1985 under the brand name Xeloda, representing the first approved oral chemotherapy.
When capecitabine came off patent near the end of 2013, it became the first oral chemotherapy available in generic form, entering the market through Teva Pharmaceuticals in March 2014.
In theory, once drug patents expire, generic competition should help lower prices for cancer treatment.
“[Because] capecitabine was one of the first orally administered cancer therapies to have a generic [version] come on the market, it made a great case study for the potential effect of generic competition for orally administered cancer therapies,” Cole said.
Price surge
Cole and colleagues used the Truven Health MarketScan Commercial Database to analyze changes in the list price of capecitabine and patient out-of-pocket expenses from 2002 through 2016, which included 3 years after patent expiration. Researchers assessed 156,508 outpatient pharmacy claims for branded or generic capecitabine filled by adults diagnosed with colorectal or breast cancer.
Researchers inflation-adjusted data to represent 2016 U.S. dollars.
Between 2002 and 2013, per-fill list prices for branded capecitabine increased from $1,367 (95% CI, 1,346-1,388) to $2,858 (95% CI, 2,836-2,881).
Generic capecitabine accounted for 34% of capecitabine prescription refills in March 2014, increasing to 90% by October 2014 and 93% by December 2015.
During that time, four generic versions of capecitabine entered the market.
In 2014, the mean list price for a 1-month supply of generic capecitabine — $2,598 (95% CI, 2,570-2,625) — was 17% lower than the projected branded price.
The mean list price of a 1-month supply of generic capecitabine dropped to 36% lower than the projected branded price in 2016 ($2,328; 95% CI, 2,289-2,367).
Despite the rapid uptake of generic capecitabine, the 36% observed decrease in list price fell short of the expected 61% decrease.
“It’s not clear why the price drop for generic capecitabine was less than what we’ve seen historically with generic competition,” Cole said. “Other studies have observed fewer-than-expected generic manufacturers entering the market for oncology drugs, which lowers competition. Smaller patient populations for cancer drugs may be less attractive to generic manufacturers, whose profits are largely based on volume. For capecitabine, the savings we did observe from generic entry were overshadowed by price increases over time for the branded drug.”
A greater proportion of patients paid $50 or more out of pocket for a capecitabine prescription in the 3 years before generic capecitabine entered the market than in the 3 years after generic entry (40% vs. 20%).
In the latter period, patients were 61% more likely to pay nothing out of pocket for generic capecitabine (RR = 1.61; 95% CI, 1.52-1.71), and were less likely to pay more than $100 (RR = 0.59; 95% CI, 0.55-0.64) or more than $500 (RR = 0.65; 95% CI, 0.57-0.74).
“The pricing offered for our products is dependent on many internal and external factors, including, but not limited to, the number of competitors in the market, market conditions, material costs, production costs, customer demand, [and] internal and external supply,” Elizabeth DeLuca, spokeswoman with Teva Pharmaceuticals, told HemOnc Today. “Like all commodity markets, the generic drug market is dynamic and prices fluctuate based on such factors.”
Per company policy, Teva declined to comment on the specific reasons for the pricing of capecitabine.
Need for competition
Trends in what patients and payers are spending on drugs may reflect actual price increases by manufacturers or the increased use of rebates being paid to plans after the drug sale is complete, according to Stacie B. Dusetzina, PhD, assistant professor of pharmacy and public health at University of North Carolina and member of Lineberger Comprehensive Cancer Center.
“There also is limited pressure to reduce pricing, so manufacturers are going to try to get as much profit as possible for products coming to market or those already approved,” Dusetzina told HemOnc Today. “Although the public is clearly frustrated with drug prices, concrete steps to stem drug price increases have not been taken at this point.”
Researchers noted that analyses of out-of-pocket costs should be interpreted with caution, owing to factors like time-varying plan characteristics and copayment assistance not reflected on branded claims. List prices in the study did not reflect rebates or discounts to payers and represented the basis for calculating patient cost-sharing for the growing number of plans requiring deductibles and coinsurance.
It is unclear whether capecitabine’s generic entry can be generalized to other orally administered anticancer therapies.
Competition has the largest impact on price, DeLuca said.
“We would expect that these drugs will continue to follow the natural erosion associated with supply and demand,” she said. “If there is more competition and ample supply, pricing will continue to fall. If not, sometimes the price increases. ...
“We believe that competition is an important part of the solution to access and affordability,” DeLuca added. “We support policies that aim to address burdensome regulations, modernize the FDA, enhance competition and address market distortions to help improve the marketplace, address affordability gaps and sustain an environment for innovation.”
Still, if similarly modest price decreases are observed for other orally administered anticancer drugs following generic entry, generic competition alone may not be sufficient to lower oncology spending.
“There are options that could be considered for curbing spending on cancer drugs, but most are complex,” Dusetzina said. “We know from experience with other clinical areas that generic entry is one key factor for reducing prices but, to be effective, robust competition is needed. We need to make sure that generic manufacturers can enter the market quickly and there are incentives to stay in the market.” – by Chuck Gormley
Reference:
Cole AL, et al. JAMA Intern Med. 2017;doi:10.1001/jamainternmed.2017.2788.
For more information:
Ashley L. Cole, MPH, can be reached at ashley.cole@unc.edu.
Elizabeth DeLuca can be reached at elizabeth.deluca@tevapharm.com.
Stacie B. Dusetzina, PhD, can be reached at stacie_dusetzina@med.unc.edu.
Disclosures: Cole reports employment with Truven Health Analytics. Dusetzina reports research funding from American Cancer Society. One other author reports research funding from Bayer, Immunomedics, Merck, Novartis and Precision Biologics. DeLuca reports employment with Teva Pharmaceuticals.