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June 2016

Promise and Peril for Generic Drugs

Author Affiliations
  • 1Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore, Maryland
  • 2Department of Medicine, Johns Hopkins University School of Medicine, Baltimore, Maryland
  • 3Department of the History of Medicine, Johns Hopkins University School of Medicine, Baltimore, Maryland
JAMA Intern Med. 2016;176(6):733-734. doi:10.1001/jamainternmed.2016.1720

Generic drugs now make up more than 88% of all prescriptions filled in pharmacies in the United States and have provided nearly $1.7 trillion in health care savings in the past decade.1 Yet tensions still persist between brand-name drugs and generics. Fifty years ago, pharmaceutical companies hurled the word generic as an insult—a reference to often unauthorized copies made by small manufacturers with questionable assurances of product utility. Yet the growth of this new industry was already under way, spurred on by waves of patent expirations, Congressional inquiries, and increasing interests of purchasers in less expensive versions of essential medications.2(pp1-136)

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    1 Comment for this article
    Regulated Royalties: Replacing the Hatch-Waxman Act
    Robert J. Sobel, M.D. | Feinberg School of Medicine, Northwestern University
    I continue to struggle with the implication that further manipulating physicians is the answer to our health care problems. What makes brand and generic different: An artificial dichotomy incited by paragraph IV of the Hatch-Waxman Act and its sanctioned litigation concepts. What happens at the level of the patient-physician relationship should take precedence over these constructs. Most certainly this has not been the case over the four plus decades during which this regime has evolved.
    I would strongly contest the analysis cited in reference one from the Generic Manufacturers Association. The money saved can actually be
    recalculated as money lost by the artificially elevated prices that have ensued to make up for the 88% market loss to the generics themselves. I do not believe any analysis of the pharmacopoeia as a whole and its effects on the medical common shows that overall drug spending is not growing faster than the rest of medicine.
    Thus, I continue to advocate for a wholesale restructuring of the pharmaceutical market, eliminating both the unnecessary redundancy, me-too lifecycle manipulations (incalculable losses I would say, as efforts into new agents yet discovered are diverted), and interference industries such as the pharmacy-benefit operations.
    Regulated Royalties (indefinite exclusivity as long as agent maintains FDA approval) would allow for a single regulatory scheme. A fee schedule akin to those already used for the rest of Medicare (would protect all payors by default) could be used, freeing patients and doctors from needing to worry about the price implications of their decisions. Clinical risk-benefit analysis could be the sole variable (this is a big enough challenge). Old and new agents would co-exist on an equal playing field. There would be introductory pricing for new (and maybe experimental) agents to facilitate a balance in cost that fosters not just innovation but also implementation of the proven. I would call for further study and implementation of such a simplified landscape, as opposed to supporting the increased bureaucracy creation currently threatening the smooth function of our healthcare system.

    Robert J. Sobel, M.D.
    Clinical Assistant Professor, Medicine/Endocrinology, Diabetes & Metabolism
    Feinberg School of Medicine, Northwestern University