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Rising Generic Drug Costs Have Physicians Raising Red Flags

A December 2015 report from the U.S. Department of Health and Human Services Office of Inspector General (OIG) and another nearly a month later from Truveris about rising drug costs have physicians asking tough questions.

Pennsylvania physicians through the Pennsylvania Medical Society have taken their concern a step further calling for state- and national-level medical associations to take an active role to encourage the Commonwealth of Pennsylvania and federal government to actively address the issue of skyrocketing generic drug prices.

According to the OIG report, the prices of 22 percent of the top generic drugs reviewed during a 10-year span between 2005 and 2014 rose faster than inflation.

The Truveris study indicated that prescription drug prices rose 10.43 percent in 2015 alone when you combine branded, specialty, and generic drugs. In that study, branded drug costs jumped 14.77 percent and specialty medications increased 9.21 percent. Generics followed at 2.93 percent overall. Patients facing symptoms of menopause and gout saw their medications skyrocket more than 33 percent.

For the sake of comparison, according to the U.S. Inflation Calculator, the inflation rate through December 2015 was less than 1 percent (.7 percent). Even before the start of 2015, the Federal Reserve was saying inflation would remain far below its 2 percent target through the year.

“Healthcare costs are always under a microscope,” said Scott Shapiro, MD, president of the Pennsylvania Medical Society. “And, when you see increases that go significantly beyond the inflation rate, it’s going to raise questions.”

According to Robert Campbell, MD, chair of Physicians Against Drug Shortages and immediate past president of the Pennsylvania Society of Anesthesiologists, surging prices have hit hundreds of mainstay generics, including anesthetics, chemotherapeutic agents, antibiotics, and nutritional intravenous solutions. He believes the surging prices are a result of anti-competitive behavior.

“The truth is that drug shortages and price spikes are not terribly complex,” said Campbell, adding that there’s growing concern within the medical community. “If you consider one simple fact-high demand and low supply at high prices-what possible explanations are there for such a condition?”

One of those concerned is Joel Fiedler, MD, president of the Pennsylvania Allergy and Asthma Association. As reported in Health Affairs Blog, he noticed that rising prices in generics like Mylan NV’s albuterol sulfate-used to treat wheezing and shortness of breath caused by breathing problems such as asthma-increased about 4,000 percent from 2013 to 2014.

“Increasing drug costs can certainly create challenging financial situations for families, possibly forcing some to skip treatments,” said Fiedler, mentioning that the cost of prescriptions in general has even sparked debate among some presidential candidates including Bernie Sanders, Ben Carson, and Hillary Clinton.

“Physicians keep in mind drug costs when they prescribe and seeing sudden and sometimes extreme price jumps give us heartburn since we know some patients may not have the best plans to cover drugs,” he said.

Shapiro and the Pennsylvania Medical Society are working with relevant stakeholders, including state and federal government, to address the issue, while advocating for generic fair pricing legislation. They’re also encouraging the development of methods that increase generic prescription drug choice and competition. Price transparency for generics is another measure the state organization supports.

Shapiro summed up the thoughts and opinions of physicians: “What good are medications if they price themselves out and patients decide to forego a visit to the pharmacy because it would create a financial strain,” he said. “I can understand that some of the increase comes as a result of research needs, but when it outpaces inflation by large margins, tough questions need to be asked and solutions need to be found.”

This article was adapted from information provided by the Pennsylvania Medical Society.