The People's Perspective on Medicine

High Prices for Generic Drugs: Are Companies Colluding?

Chances are very good that if you take any prescription medicines some will be generics. In recent years high prices for generic drugs have prompted inquiry

The Attorney General of Connecticut minced no words when he said that his office “has developed compelling evidence of collusion and anticompetitive conduct across many companies that manufacture and market generic drugs in the United States.” He went on to state:

“…we have evidence of widespread participation in illegal conspiracies across the generic drug industry.  Ultimately, it was consumers – and, indeed, our healthcare system as a whole – who paid for these actions through artificially high prices for generic drugs.”

The FDA and Generic Drugs:

The Food and Drug Administration loves generic drugs. These copycat medications are supposed to save consumers huge amounts of money without any downsides.

The FDA proclaims that:

“When it comes to price, there is a big difference between generic and brand name drugs. On average, the cost of a generic drug is 80 to 85 percent lower than the brand name product. In 2010 alone, the use of FDA-approved generics saved $158 billion, an average of $3 billion every week.”

The High Prices for Generic Drugs:

Captopril

Despite FDA’s enthusiasm for the savings generic drugs offer, there have been alarming increases in the prices of some generics. Two years ago, an article in The New England Journal of Medicine (Nov. 13, 2014) documented a 2,800 percent increase in the price of the generic blood pressure pill captopril.

Doxycycline

Doxycycline, an antibiotic that has been around for 50 years, is used to treat respiratory tract and urinary tract infections as well as several tick-borne infections, including Lyme disease and Rocky Mountain spotted fever. From 2012 to 2013, the price rose from 6.3 cents to $3.36 per pill, a 5,000 percent boost.

The reason for such extreme price increases seemed mysterious. All of the costs for developing these drugs were paid off long ago, and generic drug firms spent very little money on marketing. It appeared that some drug firms raised their prices just because they could.

Was There Collusion?

There have been suspicions that some of the generic drug manufacturers have been colluding to push prices up. The Senate Subcommittee on Primary Health and Aging held hearings in 2014. The Antitrust Division of the Justice Department has also been hunting down evidence on possible antitrust violations.

Now, the attorneys general of twenty states have joined forces to file charges against a group of generic drug companies. The accusation is of conspiring to manipulate prices on doxycycline and the diabetes drug glyburide.

The official complaint alleges that some of the executives from major generic makers met over dinner on several occasions and traded information on business strategies. It wasn’t only the male executives who were involved. There have been allegations that there were “girls nights out” get-togethers where inside information was shared. And there were “lunches, parties, and numerous and frequent telephone calls, emails and text message.” The outcome appears to have been that competition was suppressed and high prices for generic drugs facilitated. Of course not all generic drugs were involved in this mess. But even one is one too many.

The free market system is based on true competition. That is why antitrust officials are looking into “unlawful agreements to fix prices and allocate consumers.” A dozen generic drug companies, including some of the largest, may be involved and over two dozen different drugs could be affected.

The COMPLAINT from 20 attorneys general notes:

“Generic drug manufacturers argued publicly that the significant price increases [for generic drugs] were due to a myriad of benign factors, such as industry consolidation, FDA-mandated plant closures, or elimination of unprofitable generic drug product lines. What the Plaintiff States have found through their investigation, however, is that the reason underlying many of these price increases is much more straightforward, and sinister – collusion among generic drug competitors.”

The COMPLAINT goes on to note:

“This anticompetitive conduct — schemes to fix and maintain prices, allocate markets and otherwise thwart competition – has caused a significant, lasting and ultimately harmful rippling effect in the United States healthcare system, which is still ongoing today. Moreover, many of these schemes were conceived and directed by executives at the highest levels of many of the Defendant companies.”

Generic Drugs and Quality Control

The generic drug industry was already in hot water because of quality control problems, especially at a number of foreign manufacturing plants. Sloppy manufacturing practices and outright fraud have been far too frequent.

All these problems undermine public confidence in generic drugs. People rely on such medications to treat life-threatening conditions. Generic drugs make up 88% of all dispensed drugs in the United States. Chances are good that if you take any prescription medicines at least some will be generic. Insurance companies demand that patients purchase generics, regardless of where they are made. Brand name products are priced into the stratosphere.

Readers Share Their Perspective:

“Healthy Lady” in Southern California describes the price differential between brand and generic drugs:

“I cannot tolerate generic Prozac (fluoxetine) by the four companies I tried. It simply does not work.

“The price for brand name is $966.85 for a 90-day supply. The generic cost, even increased, is under $50. We need some oversight on these costs.”

Lyn in Waxhaw, NC writes:

“Not long ago I was paying about $5 or $10 for a 60gm tube of Desonide (used for dermatitis). I was shocked when it went from about $10 to over $300 in one year!”

Barry in Mansfield, TX shares the pain from a veterinarian’s perspective:

“I think the escalating costs of drugs is a huge problem in the US. Many people will have to forgo their medications and their health will surely suffer. I do believe the drug companies are gouging the public.

“On a similar note, I am a practicing veterinarian. We too use doxycycline and many other of the same drugs used for humans. The increased costs have made many of these drugs too costly and many pets are being euthanized as a result. I could give you dozens of examples. Something has to be done.”

Trish writes about high prices for generic drugs for senior citizens:

“The generic drug replacement for Corgard (nadolol), a beta blocker, went from $30 a month to over $800 in recent years. I took Corgard for over 20 years but had to give it up because of the cost. I am hoping that this sanctioned robbing of older people will be stopped.”

It could take years before the generic industry recovers from these scandals. In the meantime, consumers who need reasonably priced drugs are suffering. Our Guide to Saving Money on Medicines details these controversies and offers some alternatives (online at PeoplesPharmacy.com).

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About the Author
Joe Graedon is a pharmacologist who has dedicated his career to making drug information understandable to consumers. His best-selling book, The People’s Pharmacy, was published in 1976 and led to a syndicated newspaper column, syndicated public radio show and web site. In 2006, Long Island University awarded him an honorary doctorate as “one of the country's leading drug experts for the consumer.” .
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. . . AND if one is on a prescription plan, one can expect to periodically and arbitrarily be taken off one med and placed on another, which may or may not be effective and may or may not be safe.
it’s happened to me at least twice on which occasions i could’ve died.

I’ve been taking levothyroxine for over 10 years at a cost of 10.00 or under, that is
until this past year where I was forced to pay 37.50 for a 90 day supply. I paid this amount for every refill until just recently when I was charged 10.00 once again.
Levothyroxine has been around for decades, why the sudden increase I ask myself.
I’m sure there is collusion between some of the manufacturers. If the price hadn’t
gone down, I was going to stop taking it, as I have other costly meds that I need,
so I figured I’d cut corners where I could.

Another example: Cytomel (for hypothyroidism) shortly after it went generic went from my company’s generic co-pay of $7.50 for a 90-day supply to $54.00.

As recently as August 2016, I was paying $11.11 for 100 warfarin tabs in each of 1mg and 6mg strengths. A few weeks ago my refills from the same manufacturer were $49.00 each. My cost has more than quadrupled! I don’t know what I would do if I were taking one of the high priced drugs. This is despite checking prices at multiple pharmacies. I think this price gouging is outrageous and should be outlawed.

Nothing is going to change as lone as the money keeps rolling in. Let the little guy rot.

There have been discussions about generics for years. We just make no headway. I have complained to my Senators and gotten nothing but a form letter response. There is no reason for all the big drug companies to be outsourcing to places like India where there have been many problems. The FDA is good at issuing warning letters…you can read them on their website…and that is about all they do. The big companies are based in the United States….the mfg label says, for example, “Manufactured for Akorn Inc Lake Forest IL 60045.” It continues “Made in India” You can black out the company name if you need to. Trump can have his ties made in China. I am afraid of my eyedrops that are made in India.

I’ve been taking Quinapril 10mg (Greenstone) mfg, for HBP for probably 20+ years. All of a sudden a couple of years ago they stopped making the 10mg tablets, but I was able to get 5mg tabs that I took instead. Just now, last week, I was told Greenstone has quit making the 5mg Quinapril also. What it seems like on their Greenstones website is that they have “temporarily discontinued” manufacturing of that particular medication. Calling and talking to a Greenstone rep, I was told they may, or may not pick up manufacturing again. The problem I have is trying to replace Quinapril with another which I tried once with Lisinopril and Fosinopril, which didn’t work at all.

I appreciate your company so much for keeping us informed about so many things. There are so many of us on fixed incomes & we’re at a point in our lives that most of us “have” to take medications daily to stay alive & functioning. I know someone that works part-time at a Walmart Pharmacy & says she just wants to cry to see people come in that are very obviously in need of medication & they sadly turn away, because they just can’t afford it. In a country that brags about all we do for other nations, etc., but won’t take care of their own people. I say shame on our politicians that are living high & mighty & don’t care about the people that are or have been paying for all of it.

I have posted my thoughts on this several weeks or perhaps a few months ago. You publish only those submittals which support your conclusions. As a scientist you should be unbiased. I am disappointed.

Canadian online generic drugs are also ridiculously expensive. Just look at Metformin. I can buy at a Chinese pharmacy in Thailand for two cents US a tablet. Nearly all drugs are available here without prescription except opiates and sleeping tablets. And all a fraction of the cost of online pharmacies.

My husband is a diabetic on insulin. And it is not even generic, I think because the pharmaceuticals companies keep changing the ingredients so it is still ‘original’ insulin. Maybe someone can correct me on this.

Every year he falls into the ‘donut hole’ of his Medicare advantage plan. He then scrambles to get samples from his doctor and once a year gets a supply for about 3 months. If he didn’t find the samples he would have to pay around $200 for a supply that only lasts a couple of weeks.

Pharmacists are torn between generic drugs and brand names.
I phoned pharmacists and took a survey :
50 percent agree are fine
50 percent disagree
The comment from pharmacists is that if I have money buy brand names which are more efficient because of the way brand name drugs are produced as opposed to generic ones.
I am taking lyrica I opted for the brand name as opposed to the generic
PREGABALIN
and I am glad I did.
Why should I put my health at risk? I am not wealthy but when it comes to my health I will not take shortcuts to preserve my health and life. It is time people wake up to the fact that something is “rotten in the state of Denmark” with respect to drugs.

It’s not only collusion on price-fixing, it’s what the British Pharmaceutical Association calls ‘an availability problem’: in other words, the generic manufacturers are not only short-changing the consumer re price but also in the amount of actual drug IN THE GENERIC. French doctors hesitate in using generics: ‘ultimately they’re not good for the patient’.

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