Aug 6, 2019

Drug companies are creating generics to compete with their own products

Photo: Phil Ashley/Getty Images

Drug companies are increasingly trying to maximize their profits by creating generics to compete with their own brand-name products, Kaiser Health News reports.

Why it matters: "Authorized generics" can be just as profitable, if not more profitable, than the branded drug. They also can stifle competition from other generics, leading to higher prices for patients.

By the numbers: There are almost 1,200 authorized generics in the U.S., according to the FDA. Last year, there was about one new authorized generic a week.

  • For every $1 invested into an authorized generic, there's a return of $51, according to research firm Cutting Edge Information.

What they're saying: A spokesperson for PhRMA told KHN that authorized generics increase competition, which "reduces prices and results in significant cost savings."

The other side: They can “stave off generic competition and make sure that generics can’t get much of a foothold when they do get to market,” Robin Feldman, a professor at the University of California Hastings College of the Law, told KHN.

  • And because authorized generics often aren't subject to rebates, their net price could end up being higher than the net price of the original branded drug.

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The fight over the future of our most expensive drugs

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The market designed to create competition for biologics — typically our most expensive drugs — has been slow to take off, but some experts say that even its best-case scenario doesn't do enough to lower drug prices.

Why it matters: While wonks debate the future of biosimilars in policy journals and on editorial pages, the argument is reflected in the political divide over whether enhanced drug competition or price regulation is the best way to address drug prices.

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How Democrats want to limit drug prices

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The Democratic presidential candidates' plans to lower drug prices are much more aggressive than what the party has supported in the past.

Between the lines: There are big differences among the candidates' platforms, but the entire debate has shifted to the left.

Go deeperArrowAug 8, 2019

Hospitals' drug bills are likely going up in 2020

Health systems should expect a 4.57% increase in their drug spending in 2020, according to a new analysis by Vizient, a health care performance improvement company.

Why it matters: Some of the most expensive drugs on the market are administered in hospitals and doctors' offices, and they're folded into a patient's overall hospital bill.

Go deeperArrowAug 7, 2019