Rising drug costs affect patient care, optometrists say

Total spending on prescription medications in the U.S. increased 10.3% on a real per capita basis to $373.9 billion in 2014, according to a report from the IMS Institute for Healthcare Informatics.

Total dollars spent rose 13.1% in 2014 compared to 2013, rivaling 2001 spending when growth was 17.0%. The primary factors for the increase include higher spending on innovative new treatments, the lower impact of patent expiries and increases in list prices of branded medications, IMS reported.

This equates to about 10% of total U.S. health spending, according to Richard Cauchi, program director for the National Conference of State Legislatures Health Program.

Generics now make up 86% of all prescriptions filled and one-third of Medicaid prescription spending, Cauchi said in a November 2015 presentation.

According to the U.S. Generic Pharmaceutical Association, generic medicines saved the U.S. health system nearly $1.5 trillion over the past 10 years, including $239 billion in savings in 2013 alone.

“For a generic drug to be an acceptable alternative to a brand drug, there initially needs to be a dramatic price deferential to justify providers and patients moving away from the brand drug,” Scott A. Edmonds, OD, FAAO, chief medical officer of MARCH Vision Care and a member of the Primary Care Optometry News Editorial Board, said in an interview.

“This has now become standard practice,” he continued, “and the price differential does not need to be so impressive. This, combined with the increase in the cost of the brand drug, has driven up the cost of all drugs.”

With many treatment and medication costs on the rise, doctors are left scratching their heads, according to Scott Schachter, OD, who runs a private practice in Pismo Beach, Calif. He said the price of generic doxycycline surged from 2013 to 2014 and has come down somewhat. Today’s cost is $165 for 50 100-mg pills, he said, which is “lower than before, but still pricey for a generic.”

Image: Halim S

“In the past, if a glaucoma patient could not afford their medications, there was a concerted effort to give the patient samples or scour apps like Good Rx for coupons,” private practitioner Sally Halim, OD, told PCON. “Unfortunately, some patients will discontinue their medications and/or stop coming in for their follow-ups instead of asking for a less expensive alternative.”

The substitution of prescription drugs in a retail setting is regulated by state pharmacy laws and also a topic of interest for patients and providers.

“Pharmacists often substitute generic medicines for their patients as a lower cost option to reduce patient costs and assist with medication adherence,” Leslie Pott, vice president of communications for Sandoz Inc., told PCON. “The pharmacist has the ability to determine the best option for their patients. Physicians also retain the right to determine that no substitution can be made by writing ‘dispense as written’ on any prescription.”

Generic drugs can lead to better long-term adherence, according to a literature review by Choudhry and colleagues in Annals of Internal Medicine. Prescription brand name drugs are almost twice as likely to be “abandoned” than their generic equivalent, they reported.

However, many physicians are skeptical about generic efficacy. About one-third of physicians express concerns about the safety and efficacy of generics and prefer not to use them themselves or for their family, the study said.

According to a 2009 study by Shrank and colleagues in Health Affairs, more than 27% of insured respondents from a national survey did not fill or refill a medication in the previous year because of cost. Overall, more than 70% agreed that “generic drugs are a better value than branded drugs.” However, only 37.6% “would rather take generics than branded medication.”

The researchers also found that patients infrequently communicated with their providers about generics; only about one-third (33.2%) ask their doctors to substitute generics for brand-name medications most or all of the time, and 33.5% ask their pharmacists, according to the study.

Differences can have meaningful complications

Halim says she prescribes generics when it is an acceptable option.

“If a patient has a mild grade infection and a generic will clear up the issue and save the patient money, the generic is the way to go,” the Woolwich, N.J., practitioner said. “I also prescribe generics for cash paying patients. As long as the patient is getting the proper care, there is no harm in saving them money in the process.”

“The problem arises if the prescribing doctor is unaware that a generic was provided when they prescribed the patient a name brand drug,” Halim continued. “A condition may be taking longer to clear up, and it could be because the patient was taking a generic all along.”

Pott noted that generics contain the same active ingredients in the same concentration and dosage forms, and their efficacy is verified by strict bioequivalence studies in which they are directly compared with the respective reference product.

“Generics may vary in their method of preparation or in the composition of inactive ingredients such as colorings or binders, which have no therapeutic effects,” she said.

According to private practitioner and PCON Editorial Board member Agustin Gonzalez, OD, FAAO, “Although there are established guidelines because of the unique formulations and mode of delivery, noninferiority studies are often not required for topical ophthalmic generics under the assumption that similar concentrations of active and inactive ingredients will prove equal in therapeutic effectiveness and safety.”

Wiley A. Chambers, MD, deputy director of the FDA Division of Transplant and Ophthalmology Products, stated in a 2012 editorial in the journal Ophthalmology that “approval of generic ophthalmic products is based on having the generic ophthalmic match each active and inactive ingredient to within plus or minus 5% of the innovator target formulation.”

John A. Hovanesian, MD, FACS, a member of the PCON Editorial Board, told PCON that excipient ingredients found in medications, such as preservatives, vary widely from brand name to generics and can cause harm to certain patients in the form of a reaction, discomfort or worse.

Generics are appropriate in many cases but need to be used with caution when patients are taking them every day, he said.

For example, daily use of latanoprost can damage the ocular surface of the eye over time, Hovanesian told PCON. The drug contains benzalkonium chloride, which helps emulsify bacteria and kill fungi, but can also lead to chronic corneal neovascularization, conjunctivalization of the cornea, loss of vision, pain and irreversible side effects as a result of chronic use.

“As a cornea specialist, I treat patients referred for advanced dry eye, but it’s not dry eye at all but limbal cell deficiency,” he said. “This is irreversible damage to the surface of the eye caused by chronic use of glaucoma medication. The condition can occur with brand name medications, but it’s much more common with generics.”

In other words, the pressure was lowered at the cost of the patient’s vision through the use of this medication, he said.

“This is not a theoretical concern but a very real one that we are seeing harm patients every day,” Hovanesian added.

Price increases are multifaceted, complex

As with other issues in health care, drug pricing is complicated, and no one entity is to blame, according to sources.

The FDA has increased its manufacturing oversight of facilities that produce generics, Gonzalez said in an interview. However, keeping facilities in compliance and monitoring facilities overseas is an expensive and tedious process, he said.

The additional oversight resulted from generic quality control issues, Gonzalez continued. In one example, in late 2012, Indian manufacturer Ranbaxy halted production of atorvastatin, the Lipitor generic, after small glass particles were discovered in some bottles. More recently, many have questioned the efficacy of Concerta (methylphenidate HCl) generics for attention deficit and hyperactivity disorder.

The scarcity of raw products and regulations on purity and suppliers of raw material also contributes to the rising costs in manufacturing, he said.

“Topical ophthalmic generics can often be supplied by multiple manufacturing facilities,” Gonzalez said. “Potential differences in the manufacturing processes may cause tolerable differences in the composition of topical suspensions that may lead to subtle variations in formulation that can or could equate to safety or efficacy problems; however, these variations must also be FDA approved.”

Market forces are another factor. The decrease in competition by consolidation and mergers within manufacturers, suppliers and distributors are driven by cost containment and with profits in mind, according to Halim. Currently, Teval, Mylan and Sandoz make up a large portion of the generic market, she said.

Gonzalez believes the government budget cuts of 2013 also added an important piece to this puzzle. Many of the older drugs pre-dated the creation of the FDA and had no NDC (National Drug Code) number (such as phenylephrine). These manufacturers were asked to undergo the Abbreviated New Drug Application (ANDA) process for regulatory compliance.

This created income for the agency, he said, and weeded out manufacturers that produced some of the product but were incapable or not prepared to undergo the ANDA process and had to raise their prices as a consequence.

The ANDA process may take up to 2 years and cost millions of dollars, with an additional 2 to 3 years to get the drug to market, Halim said.

‘Something has to give’

A study by Gagnon and colleagues in PLoS Medicine illustrated how promotional spending dominates research and development in the pharmaceutical industry. The 2008 study found that pharmaceutical companies spend almost twice as much on promotion as they do on research and development.

CAM, a market research company, reported total promotional spending at $33.5 billion in the U.S. in 2004, while IMS found $27.7 billion for the same year. The National Science Foundation estimated domestic industrial pharmaceutical research and development at $31.5 billion in 2004.

The researchers concluded that the study, “...confirms the public image of a marketing-driven industry and provides an important argument to petition in favor of transforming the working of the industry in the direction of more research and less promotion.”

“Something has to give,” Halim said. “More drugs need to go generic, or alternative medications need to be introduced to increase competition and level out the playing field. Obviously, with the cost of getting a medication through the FDA, this is much easier said than done.”

The agency’s 2014 fiscal year performance report noted that none of the 1,500 applications for generic drugs submitted in fiscal year 2014 had been approved by end of year, according to a JAMA viewpoint by Greene and colleagues

“A better solution is for the FDA to prioritize review of applications for essential drugs that can have a major effect on competition and affordability in the market,” Greene wrote.

The researchers encouraged the FDA to address monopolistic conditions within pharmaceutical companies to fight price hikes that will help prevent future shortages of drugs.

Another idea proposed by Greene and colleagues was permitting temporary compounding during the priority review period to promote access “of an essential drug that can substantially improve competition in the market,” they wrote.

Lastly, they suggested temporarily allowing the importation of drug products reviewed by regulatory authorities approved for sale outside the U.S.

In 2012, the FDA conducted a temporary importation of the crucial anticancer agent doxorubicin, Greene and colleagues reported. The importation was permitted because the agency deemed it critical to patients, and the shortage could not be resolved by U.S. manufacturers in the immediate future.

“The same terms could also apply to drugs facing a disruption in access due to precipitous, arbitrary price increases,” they wrote.

The doctor’s role

With the myriad of health insurance plans and available drugs on the market, doctors cannot be expected to anticipate the costs for the patient when they get to the pharmacy, nor can the patient, Schachter said. He recommends calling the most popular local pharmacy to find out how much commonly prescribed drugs cost. He also encourages asking patients how much they paid for a drug. Finding out what drugs are offered in each class is also a helpful practice.

“Providers need to be more involved in the process to level the playing field,” Edmonds attested. He proposes integrated ophthalmic networks with risk-based contracts that include the pharmacy benefit.

Another important side of this issue is the demand for drugs in the U.S.

“We have a voracious appetite for drugs that only resolve acute symptoms even if they have an adverse effect on overall health and wellness,” Edmonds said. “This is fueled by direct-to-consumer advertising and the Internet availability of any and all medicines from offshore suppliers. I do feel that this is related to the ‘demand’ side of the economic equation.”

“We love to be altruistic and think that we benefit society, but in every level of health care costs, margins and profits have to be met,” Gonzalez concluded. “The health care system is not designed to be cost neutral but rather accountable to shareholders or private investors.” – by Abigail Sutton

• References:
• Cauchi, R. Prescription drugs: Overview and update. National Conference of State Legislators. www.ncsl.org/documents/health/Prescription_Drugs_Cauchi-Nov-2015.pdf.
• Chambers WA. Ophthalmology. 2012:119:1095-1096.
• Choudhry NK, et al. Ann Intern Med. 2016;164(1):41-49. doi:10.7326/M14-2427.
• Gagnon MA, et al. PLoS Medicine. 2008;5(1). doi:10.1371/journal.pmed.0050001.
• Generic Pharmaceutical Association. http://www.gphaonline.org.
• Greene JA, et al. JAMA. Published online January 4, 2016. doi:10.1001/jama.2015.18720.
• IMS Institute for Healthcare Informatics. Medicine use and spending shifts: A review of the use of medicines in the U.S. in 2014. Accessed January 21, 2016. http://www.imshealth.com/en/thought-leadership/ims-institute/reports/use-of-medicines-in-the-us-2013.
• Novack GD. The Ocular Surface. 2013;11(1):54-57.
• Shrank WH, et al. Health Affairs. 2009;28(2):546-556. doi:10.1377/hlthaff.28.2.546.
• Zuvekas SH et al. Health Affairs. 2007;26(1):249-257. doi:10.1377/hlthaff.26.1.249.

• For more information:
• Scott A. Edmonds, OD, FAAO, is chief medical officer of MARCH Vision Care and the co-director of the Low Vision/Contact Lens Service at Wills Eye Institute in Philadelphia. He can be reached at: scott@edmondsgroup.com.
• Agustin L. Gonzalez, OD, FAAO, serves as adjunct faculty at InterAmerican University and is in private practice in Dallas. He can be reached at: gonzalez.agu@gmail.com.
• Sally Halim, OD, is in private practice in Woolwich, N.J. She can be reached at: drhalim@sjvillageeyecare.com
• John A. Hovanesian, MD, FACS, is a specialist in cornea, external ocular disease and refractive and cataract surgery practicing in Laguna Hills, Calif. He can be reached at: drhovanesian@harvardeye.com.
• Leslie Pott is vice president of communications for Sandoz Inc. She can be reached at leslie.pott@sandoz.com.
• Scott Schachter, OD, practices in Pismo Beach, Calif., and can be reached at: scotts.gm@gmail.com.

Disclosures: Edmonds is chief medical officer of MARCH Vision Care. Gonzalez is a consultant for Allergan, Valeant and Shire. Halim reports no relevant financial disclosures. Hovanesian reports that he consults for a number of pharmaceutical companies that sell both branded and generic ocular medications. Pott is employed by Sandoz. Schachter is a consultant for Allergan and BioTissue.