The People's Perspective on Medicine

Who Is Responsible for Skyrocketing Generic Drug Costs?

Rapid rises in generic drug costs have competitors mirroring each other. Is there something underhanded going on? The Justice Department is checking.

Generic drug companies have come under fire in recent years because of extraordinary price increases in their previously affordable products. The cost of medications like the antibiotic doxycycline has skyrocketed.

Investigation of Possible Price Collusion:

Now, the Justice Department is investigating some of the biggest generic drug manufacturers for price collusion. Until the last few years, anyone who had to pay for prescription drugs loved generics. That included hospitals, insurance companies, the VA and the FDA. Businesses that offered their employees health coverage also embraced generic drugs. After all, low-cost generic products saved everyone money. According to the FDA, Americans saved $158 billion in 2010 alone by purchasing generics instead of brand name drugs.

These savings come in large part from outsourcing. Highly competitive generic manufacturers are increasingly using inexpensive suppliers in countries like China, India, Slovakia or Thailand. Some foreign firms have been caught falsifying data or producing medications that do not meet good manufacturing practices.

The new investigation is focused on a different issue entirely. The Antitrust Division of the Justice Department is looking for evidence that generic manufacturers may have colluded on pricing. A dozen companies are under scrutiny. They include some of the largest generic makers in the world.

Which Drugs Are Affected?

Some of the medicines under scrutiny by the Department of Justice include the heart medicine digoxin, the antibiotic doxycycline, the asthma drug terbutaline and the psoriasis medication calcipotriene.

The Government Accountability Office (GAO) has reported that over the last five years more than a fifth of the generic drugs it analyzed had a price jump of 100 percent or more. That kind of inflation has also spurred Attorneys General from several states to investigate price fixing.

Are Rising Generic Drug Costs Responsible for Drug Shortages?

Not only have prices gone up; health care providers have been struggling with rampant drug shortages for the last several years. Critical medicines including antibiotics, cancer chemotherapy and injectable medications used during surgery have landed on the FDA’s Drug Shortages list.

The feds blame such medication scarcities on problems with manufacturing, supply-chain trouble or discontinuations. Some experts have expressed concern that a few companies may have reached agreements to stop making certain generic medications. When a drug is in short supply, prices often rise, sometimes dramatically.

Patients are caught in the middle. On the one hand, they hear from the FDA that generic drugs are a great way to save money. On the other hand, prices at the drugstore may be much higher than before.

The FDA says all generic drugs are identical to brand name medicines. Then consumers read that many foreign drug firms have been accused of fraud or quality control problems. If generic firms are now caught colluding on prices, it will undermine consumer confidence in generic drugs even more. You can learn more in our Guide to Saving Money on Medicines.

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About the Author
Terry Graedon, PhD, is a medical anthropologist and co-host of The People’s Pharmacy radio show, co-author of The People’s Pharmacy syndicated newspaper columns and numerous books, and co-founder of The People’s Pharmacy website. Terry taught in the Duke University School of Nursing and was an adjunct assistant professor in the Department of Anthropology. She is a Fellow of the Society of Applied Anthropology. Terry is one of the country's leading authorities on the science behind folk remedies. .
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Simply, its the price! LOL

I have been taking the generic for Synthroid (Levothyroxine) for many years. My cost had been $10 for a 90 day supply. In May it jumped to $30, November to $36. How can this be justified?

Thank you for your continuing coverage of this outrage. You have to wonder how much of that money is being used by lobbyists to line the pockets of our politicians. After all, they don’t have to worry about it, since they get fantastic coverage that, I believe, continues even after leaving office.

Write your congressman! Tell him or her you are sick and tired of big pharma running over Medicare and the citizenry at large.

There is no end to the GREED.

When are we going to address the problem? And the problem is that most Americans are on drugs, whether legal or illegal. And there are people making money off both kinds, lots of money.

I don’t know about price increases for the generic antidepressant, Buproprion, but I was shocked to find that the brand, Wellbutrin, costs a shocking $1,017.00 for a 30 day supply. I had been on a generic Bupropion when it apparently stopped working. My doctor gave me a 3 week sample supply of the brand, and it made a remarkable difference. However my drug plan doesn’t cover the brand (and I really don’t blame them). This is, in my opinion, another example of price gouging and manipulation of the market. We need to keep this issue up front in the news and social media. Hopefully, at some point, to lower health care costs, this thievery will be stopped.

It’s been stated: Generic Drugs are the same as the Brand Name Drugs. NO THEY ARE NOT! Generic drugs are MISSING some, or part of the needed FILLERS THAT ARE PUT INTO THE MEDICATION. I KNOW, I’VE HAVE WITNESSED IT!!! OVER A PERIOD OF TIME I have found the proof of where the medications are made and where they come from. So, there are 5 suppliers that Meds are going through before they are to the last stop as in people.

Looking for a good source for generic drugs.

How does a person know if a drug they are taking is produced in a foreign country, is diluted, or even filled with harmful chemicals?

My husband just got a new prescription for general Lotril. My pharmacy called me to tell me that by using my insurance, the drug would cost just under $30 per month. By paying cash, it would cost $10 per month. She said my insurance company copay was higher than the cost of the drug. So it would seem like there are other variables involved in the high cost of generics?

Simple economics. Only one generic manufacturer can win. When a high portion of the pharmaceutical buying power is in the hands of a few (managed care) and the few base their buying decision on price, only one manufacturer will remain standing and that company will have no competition. That company can charge what it wants. Welcome to the reality of unintended consequences.

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