Why many generic drugs become so expensive

The high cost of prescription drugs is great news. You hear on TV, in the doctor's office, and even in the election campaign. When you think of expensive drugs, you can think of new therapies for lung cancer or hepatitis C. But in fact, prices are also soaring for generic versions of some commonly prescribed drugs.

An article published last year in the New England Journal of Medicine reported that between 2012 and 2013, captopril - a generic drug used to treat hypertension and heart failure - increase in the price of 1 cent to 40 cents pill. During this same period, the cost of doxycycline, an older antibiotic, rose 6 cents to $ 3.36 per pill. 

Connecture, a company of information technology for health insurance, reports that while the price of most generic drugs remained constant between 2008 and 2015, nearly 400 increases over 1000% saw prices generic. At a time when 18% of the costs of prescription drugs are paid out of pocket and 8% of Americans do not take their medication reports to save money, these dramatic increases in generic prices placed a heavy burden on public health.

Why is your product going in the price? 
Most of us think of cheaper generic version of a brand name for a prescription alternative - and that is often the case. Pharmaceutical companies that manufacture generic drugs can sell at lower prices because they do not have to pay for research and development that brought the drug to market first.  

However, this advantage may take a backseat in situations like these, where competition is reduced or delayed, allowing generic manufacturers to increase their prices:

  * The marketing of certain generic drugs is so small it attracts several producers such as pyrimethamine (Daraprim), an ancient drug used to treat a parasitic infection called toxoplasmosis. GlaxoSmithKline has long been the only producer of pyrimethamine, but at a modest price. This August, however, Turing Pharmaceutical acquired the rights to the drug and operated its monopoly, the price increase of 5,000% (from $ 13.50 to $ 750 per pill).

  * In some cases, the number of producers of generic drug decreases due to a continuous wave of market consolidation within the pharmaceutical industry.

  * Unforeseen safety issues may limit the supply of a generic drug. Hikma Pharmaceuticals, for example, was forced to stop production of doxycycline in 2011 because of quality problems at its plant in New Jersey. The shortage led to an increase of 6,000% in the price of drugs.

  * It can be difficult and expensive for a manufacturer for a generic drug to market first. The average time to the Food and Drug Administration (FDA) for the treatment of an application for generic drugs was 42 months in 2014, compared to an average of eight months to apply for a new standard drugs.

  * A generic manufacturer must prove that his version of a drug product is equivalent to a "reference" existing on the market. When only one company produces a tightly controlled drug and distribution, it can be extremely difficult for other companies to provide reference samples for products.

What you can do 
While Congress, the FDA and other government agencies to explore possible solutions to prevent soaring prices of generic drugs, there are several steps you can take to limit the number of victims in your wallet.

First, when the doctor recommends a drug for you, ask about its cost. In some situations, another drug (cheaper) which has a similar mechanism of action could be safe and effective.

When this is not possible or desirable, you might be able to save money by purchasing generic drugs independent of their health insurance. Websites like GoodRx offer online tools to compare the real drug prices in your area. Discount drug programs or discounts can also help. Note that while these programs may provide some relief, which are often available only for a short period of time (most are not valid after one year), and which can undermine policies to reduce insurance costs - and therefore premiums - down.

Finally, use your voice to help keep this issue a political priority. If you experience a substantial increase in the price of generic drugs, tell your elected officials. 
By: Ameet Sarpatwari, JD, PhD