Some of the most popular and expensive brand-name drugs are about to go generic.
Take , for example. In November, the heart drug comes off-patent 鈥� and by next June, there are likely to be multiple generic versions.
(File photo by Jessica Marcy/KHN)
With almost $11 billion in sales last year, it鈥檚 the largest blockbuster to fall off what analysts call the 鈥減atent cliff.鈥� And it鈥檚 just one of dozens of popular high-end pharmaceuticals whose prices are expected to plummet in the coming years, including drugs like (for heart disease), (used to treat depression) and (for digestive problems.)
Patients often pay more for name-brand drugs, even when they鈥檙e covered by insurance. Sometimes they have no choice because 鈥� unlike Lipitor 鈥� many drugs don鈥檛 yet have generic competition.听
, a cardiologist at New York University, says many patients on those drugs come in and beg for free samples. Others simply don鈥檛 fill their prescriptions 鈥� or they do, but then try to stretch their resources by taking the pricey pills less often than they鈥檙e supposed to.
鈥淧eople come in with their blood pressure not as well controlled, or they come in and their cholesterol鈥檚 all of a sudden mysteriously higher. And you realize, OK, the medicine hasn鈥檛 stopped working, but you also realize the medicine doesn鈥檛 work when it鈥檚 still in the bottle,鈥� he says.
Generics already represent of drug sales 鈥� a dominance expected to grow in the future. Michael Kleinrock, of marketing research firm , says patent expirations over the last half-decade are one of the main reasons why Medicare spent $50 billion less than federal officials projected five years earlier. Kleinrock says the average daily cost of drugs dropped one-third from 2005 to 2010, and should drop another third between now and 2015.
鈥淲e鈥檙e already at reasonably low cost relative to 10 years ago or so,鈥� he adds. 鈥淭hat said, there鈥檚 still actually more to go, which is excellent for consumers.鈥�
The drop in drug costs because of generics is one of the few bright spots in all of American health care. But it isn鈥檛 exactly a big bright spot.
鈥淔or sure it will be felt, but because the other things are on such a heavy rise, it will only temper where rates are currently,鈥� says Dr. Dennis Liotta, the head of pharmaceutical benefits for Emblem Health, one of New York鈥檚 largest insurers.
Liotta says the generic drug savings is significant and especially visible to people with limited means and limited health coverage. But drugs are a relatively small factor in insurance premiums. And while blockbuster drugs like Lipitor are sunsetting, University of Michigan business school professor says pharmaceutical companies are trying to replace them with new, more targeted drugs 鈥� like Pfizer鈥檚 recently approved .
鈥淭he interesting thing is it will work in only 5 percent of lung cancer patients. The other interesting thing is it鈥檚 going to cost $115,000 per year, per patient,鈥� Gordon says.
Some analysts say the growing field of costly specialty drugs could undermine the growing savings from generics. But Gordon says drug companies will still have their work cut out for them. It鈥檚 getting tougher not only to come up with new drugs, he says, but also to convince insurers and the government to pay for them 鈥� unless they make meaningful improvements in health, at a reasonable cost.