Hospitals that have been struggling with shortages and subsequent high prices are now complaining that even after supply gets back to normal prices remain high.
The issue is mainly affecting sterile injectable generics and some blame the policies of the US Food and Drug Administration (FDA) for causing some of these [1]. The agency has been cracking down on manufacturers of ‘older’ generics to make sure that they are meeting modern-day good manufacturing practices (GMP). The only problem with this is that many of these ‘old’ generics are made in old factories. The cost of updating these facilities have caused some generics makers to close sites rather than foot the bill – leading to fewer players in the market – and in some cases causing shortages. Even those that have chosen to make the investment have sometimes had to suspend production for a while, exacerbating the situation, and then once production returns they naturally expect a higher return on their products and have thus hiked the prices to claw back some of the cost of their investment.
Just one example is that of glycopyrrolate, a drug used to dry up secretions prior to surgery. After Daiichi Sankyo, which was one of only two makers of the drug, temporarily closed its factory in 2012 to fix quality control problems, Hikma Pharmaceuticals (Hikma) raised prices on its injectable version more than 800% over the next year. Although both manufacturers are now making the drug again, Hikma’s prices have only fallen slightly and remain more than eight times higher than they were in early 2013.
Hikma has justified its higher prices due to having to cover the cost of increasing supply and shifting production to a new plant in Portugal. Hikma also claims that, after discounts, the drug still does not cost more than US$20 for a typical surgery.
This is not an isolated case, recent staggering price increases on ‘old’ generics by Valeant Pharmaceuticals (Valeant) and Turing Pharmaceuticals (Turing) have prompted the US Federal Trade Commission (FTC) to investigate pharmaceutical companies for possible antitrust violations. While presidential candidate Hilary Clinton has proposed a US$250 monthly cap on out-of-pocket prescription drug costs and other measures to stop what she called ‘price gouging’ by pharmaceutical companies [2]. Senators Sanders and Cummings have also pointed to ‘staggering price increases’ in the range of 390–8,200% across ten products and asked 14 generics makers to submit detailed information on the reasons for this [3]. Then in November 2015 democratic members of the House Committee on Oversight & Government Reform launched the Affordable Drug Pricing Task Force, which its members say will bring about ‘meaningful action to combat the skyrocketing costs of pharmaceuticals’ [4].
Related articles
Generics manufacturers increase investment in injectables
Drug shortages linked to quality control costs
References
1. GaBI Online - Generics and Biosimilars Initiative. US drug shortages – FDA may hinder, but APP may help [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Nov 27]. Available from: http://www.gabionline.net/Generics/News/US-drug-shortages-FDA-may-hinder-but-APP-may-help
2. GaBI Online - Generics and Biosimilars Initiative. Senator calls for FTC to investigate drugmakers for antitrust violations [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Nov 27]. Available from: www.gabionline.net/Policies-Legislation/Senator-calls-for-FTC-to-investigate-drugmakers-for-antitrust-violations
3. GaBI Online - Generics and Biosimilars Initiative. Investigation into huge price increases for generics in the US [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Nov 27]. Available from: www.gabionline.net/Generics/General/Investigation-into-huge-price-increases-for-generics-in-the-US
4. GaBI Online - Generics and Biosimilars Initiative. US politicians form Affordable Drug Pricing Task Force [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Nov 27]. Available from: www.gabionline.net/Generics/General/US-politicians-form-Affordable-Drug-Pricing-Task-Force
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