Data are shown for December 2, 2010, to May 31, 2013. The vertical bar at December 1, 2011, indicates the end of market exclusivity for brand-name atorvastatin, which we refer to as the start of limited generic competition. The vertical bar at June 1, 2012, indicates the start of full generic competition. Predicted monthly prescription fills are calculated from the linear regression model (described in the Statistical Analysis subsection of the Methods section).
eTable.ICD-9–Based Definitions of Demographic and Clinical Characteristics
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Luo J, Seeger JD, Donneyong M, Gagne JJ, Avorn J, Kesselheim AS. Effect of Generic Competition on Atorvastatin Prescribing and Patients’ Out-of-Pocket Spending. JAMA Intern Med. 2016;176(9):1317–1323. doi:10.1001/jamainternmed.2016.3384
In November 2011, the cholesterol level–lowering medication atorvastatin calcium became available in the United States as a generic drug. However, only a single generic form (from a manufacturer that qualified for market exclusivity by challenging several of Pfizer’s patents) and an authorized generic form (a brand-name drug sold as a generic) were available for the first 180 days.
To describe trends in the prescribing of generic atorvastatin after expiration of market exclusivity for the brand-name medication and the effect on patients’ out-of-pocket spending.
Design, Setting, and Participants
A US population-based study used commercial claims data from the Optum Clinformatics research database (UnitedHealth Group) from December 1, 2010, to May 31, 2013. Participants were 1 968 709 adults with commercial insurance who had been prescribed 1 or more statins (13 285 223 statin prescriptions). An interrupted times series model was used to examine the effect of limited and full generic competition on brand-name and generic atorvastatin prescriptions. Data were analyzed from December 1, 2010, to May 31, 2013.
Prescription of brand-name atorvastatin, generic atorvastatin, and authorized generic atorvastatin were distinguished using National Drug Codes.
Main Outcomes and Measures
Total number of prescriptions dispensed per month and out-of-pocket expenditures for a typical 30-day supply of 20-mg atorvastatin during the periods of brand-name availability only, limited generic competition (lasting 180 days after market exclusivity ended), and full generic competition.
Of the 1 968 709 beneficiaries, 1 483 066 (58.8% male and 41.2% female; mean [SD] age, 55.6 [10.2] years) received a prescription for a single statin and were included in the analysis. The introduction of the first generic competitor was associated with a reduction in monthly brand-name atorvastatin fills by 20 896 prescriptions (level change, P = .001), an 18.1% change compared with the month preceding loss of exclusivity. Full generic competition reduced brand-name fills by 54 944 prescriptions (level change, P < .001), a 47.6% change relative to the month preceding loss of exclusivity. During the first 180 days of generic competition, no meaningful difference in monthly out-of-pocket spending was found between brand-name (median, $16.98; interquartile range [IQR], $8.76-$48.66) and generic (median, $19.98; IQR, $7.50-$54.90) atorvastatin. After full generic competition, estimated monthly out-of-pocket spending for generic atorvastatin (median $5.10; IQR, $3.36-$19.98) or authorized generic atorvastatin (median, $5.52; IQR, $3.48-$19.98) was substantially lower than that for brand-name atorvastatin (median, $30.00; IQR, $15.00-$91.38).
Conclusions and Relevance
Among patients with commercial health insurance, delays in generic uptake and high levels of out-of-pocket spending during the first 180 days after atorvastatin lost market exclusivity slowed changes in drug prescribing and decreases in patients’ out-of-pocket costs.
Originally approved in 1996, atorvastatin calcium (Lipitor) marketed by Pfizer was the top-selling prescription drug in the United States from 2007 to 2011, with annual sales of greater than $7 billion.1 During those years, atorvastatin represented approximately one-quarter of all prescribed medications in the class of cholesterol level–lowering hydroxymethyl glutaryl coenzyme A reductase inhibitor (statin) drugs, second only to simvastatin (Zocor), which was available as a generic drug during that time and accounted for approximately 40% of statin sales.2 In late 2011, generic versions of atorvastatin started to reach the market.
Physicians and the public often assume that once a brand-name drug loses patent protection, a number of different generic manufacturers receive marketing approval by the US Food and Drug Administration (FDA) to sell less expensive but chemically and clinically interchangeable versions of the brand-name drug. However, atorvastatin’s transition from brand-name–only availability to a competitive generic market occurred slowly for several reasons. First, the date of generic entry was delayed. An Indian drug manufacturer, Ranbaxy (now Sun Pharmaceutical), was the first company to file an application with the FDA seeking marketing approval for a generic version of atorvastatin. Ranbaxy’s generic product could have launched as early as March 2010 but litigation over Pfizer’s patents delayed its launch until November 2011.3
Second, full generic competition did not occur immediately. The 1984 Hatch-Waxman Act amendments to the Food, Drug and Cosmetic Act4 included a pathway that provides 180 days of generic marketing exclusivity to the first generic manufacturer challenging a potentially invalid pharmaceutical patent. During this period, the FDA cannot approve applications seeking marketing authorization for a generic submitted by other manufacturers. Because Ranbaxy qualified for the 180-day period by challenging several of Pfizer’s unexpired patents on atorvastatin, full generic competition did not occur until May 2012, when 4 other manufacturers received FDA approval to market their versions.
To further protect its revenue, Pfizer introduced an “authorized generic” of the drug (made by Watson, under license from Pfizer) at the same time as Ranbaxy’s version. An authorized generic is a brand-name product sold under a generic name. Pfizer also attempted to maintain market share by aggressively negotiating discounts or rebates with health plans and pharmacy benefit managers in exchange for preferred formulary status or exclusive rights to mail-order services. In December 2010, Pfizer also launched a $4 copayment coupon to steer patients away from generic competitors.2,5,6 We herein analyze the effect of Ranbaxy’s 180-day marketing exclusivity period and Pfizer’s introduction of an authorized generic on patterns of atorvastatin use and out-of-pocket costs for patients with commercial health insurance.
Question How did use of and out-of-pocket spending for atorvastatin change after loss of market exclusivity?
Findings In this analysis of approximately 1.5 million patients with commercial insurance and a prescription for a single type of statin, limited generic competition reduced monthly brand-name prescriptions of atorvastatin by 18.1% relative to the month before generic entry but did not affect out-of-pocket expenditures. Full generic competition reduced brand-name fills by 47.6% and was associated with substantial reductions in out-of-pocket spending for generic versions of atorvastatin.
Meaning Limited generic competition may not have a large effect on brand-name prescription drug use or out-of-pocket costs.
We extracted population-level data on prevalent statin use from the Optum Clinformatics research database, which covers 14 million current beneficiaries insured under UnitedHealth Group.7-10 Eligible patients were 18 years or older, had at least 180 days of continuous enrollment, and had filled a prescription for at least 1 statin (atorvastatin, simvastatin, rosuvastatin, fluvastatin, pitavastatin, lovastatin, pravastatin, combined amlodipine besylate and atorvastatin, combined ezetimibe and simvastatin, combined atorvastatin and ezetimibe, combined niacin and simvastatin, or combined niacin and lovastatin) from December 1, 2010 (1 calendar year before the first generic entry), to May 31, 2013 (1 calendar year after full generic competition). This study was approved by the institutional review board of Brigham and Women’s Hospital and Harvard Medical School, which waived the need for informed consent for the deidentified patient data.
We identified patient and prescription counts of prevalent statin users. We classified atorvastatin users into 1 of the following 3 categories using the FDA’s National Drug Code: (1) brand-name atorvastatin (Pfizer), (2) generic atorvastatin (various manufacturers), and (3) authorized generic atorvastatin (Watson). We used a cross-walk file to convert the 11-digit billing codes available in Optum to the FDA’s 10-digit National Drug Code.11
We used claims-based definitions from the International Classification of Diseases, Ninth Revision, and a comorbidity score (eTable in the Supplement) to assess demographic and clinical characteristics of prevalent users.12 We assessed for clinical characteristics during the 180 days before each patient’s index prescription.
We divided our 30-month study into 3 time segments using 2 policy interventions. The first segment (market exclusivity) ended on December 1, 2011, 1 day after Ranbaxy’s first generic atorvastatin entered the market. The second segment (limited generic competition) continued until May 31, 2012, 3 days after the end of Ranbaxy’s 180-day generic marketing exclusivity period. The third segment (full generic competition) started on June 1, 2012, and continued until the end of the study period. The authorized generic version was available during the limited and full generic competition segments. A very small number of prescription fills were misclassified because of the way we defined our interventions. For example, during the final month of market exclusivity, November 2011, 379 prescriptions (<0.33% of brand-name atorvastatin fills) for authorized generic atorvastatin were filled but not included as data points in our segmented regression analysis because the start of the first policy intervention (limited generic competition) was set on December 1, 2011.
The primary outcome consisted of prescriptions of brand-name, generic, and authorized generic atorvastatin (total number of dispensed prescriptions per month). Our secondary outcome was out-of-pocket spending (defined as the sum of the beneficiary copayment and deductible amounts). We determined the out-of-pocket spending per milligram of dispensed drug by dividing the out-of-pocket amount by the product of the quantity supplied and dosage strength. In contrast to previous reports examining cost outcomes from generic entry using retail or average wholesale prices,13-15 out-of-pocket spending better reflects real costs to patients because few pay the full retail price. We then multiplied the median and 25th and 75th percentiles of spending per milligram of dispensed drug for each segment by the most common strength (20 mg) and days supplied (30 days).
Data were analyzed from December 1, 2010, to May 31, 2013. We used interrupted time series models to evaluate the longitudinal effect of limited and full generic competition on atorvastatin use. Segmented regression analysis of time series data has been previously described in pharmaceutical research and allows one to determine whether observed changes in the level or the trend of prescription drug dispensations should be attributed to a policy intervention or to chance alone.16 We created indicators for each time segment and an indicator for calendar month and then used these indicators in a linear regression model to predict use of brand-name, generic, and authorized generic atorvastatin. For the latter 2 outcomes, we used a model that began on the first intervention. We adjusted for first-order and higher-order autocorrelation of error terms using PROC AUTOREG in SAS statistical software (version 9.4; SAS Institute Inc) with a lag of up to 12 months. We tested for serial autocorrelation of error terms using the Durbin-Watson statistic. All analyses were conducted on SAS statistical software. We considered P values of less than .05 as statistically significant.
Our analytic cohort included 1 968 709 beneficiaries who filled 13 285 223 statin prescriptions during the study period. After excluding those who had fills for more than 1 type of statin (n = 485 643), our cohort included 1 483 066 individuals (58.8% male and 41.2% female; mean [SD] age, 55.6 [10.2] years). Their characteristics are shown in Table 1. Of these, 12.9% had a diagnosis of coronary artery disease or ischemic heart disease during the covariate assessment period, suggesting that most received statins for primary prevention of cardiovascular disease.
Part A of the Figure shows the change in levels and trends of monthly brand-name atorvastatin prescriptions during the study period. A level change refers to an increase or decrease in the number of prescription fills after the intervention (limited generic competition or full generic competition). A trend change refers to an increase or decrease in the slope of the segment after the intervention compared with the segment preceding the intervention. Limited generic competition was associated with a reduction in monthly brand-name atorvastatin fills of 20 896 prescriptions (level change, P = .001), an 18.1% change compared with the month preceding loss of exclusivity. In the next 6 months, brand-name atorvastatin prescriptions declined by 1346 prescriptions per month, although the difference was not significant compared with the numbers during the baseline segment (P = .33).
Full generic competition was associated with a reduction in monthly brand-name atorvastatin fills of 54 944 (level change, P < .001), a 47.6% change relative to the month preceding loss of exclusivity. Subsequently, the rate of prescription fills further declined by 3006 prescriptions per month (trend change compared with the segment of limited generic competition, P = .04).
The first month of full generic competition was associated with an increase in prescription fills for generic atorvastatin (Figure, B) of 40 037 (level change, P < .001). Subsequently, the trends in the rate of prescriptions during the segment of full generic competition and the segment of limited generic competition were similar (P = .63).
Full generic competition was associated with an increase of authorized generic prescriptions (Figure, C) of 23 367 per month (level change, P = .002). During the segment of limited generic competition, use of authorized generic atorvastatin decreased by 121 prescriptions per month. After full generic competition, use of authorized generic atorvastatin increased by 1201 prescriptions per month; however, the trend change comparing this segment with the segment of limited generic competition was not significant (P = .48) (Table 2).
We conducted sensitivity analysis to examine whether any underlying trends or monthly or seasonal variation in statin use or hyperlipidemia diagnoses were found in the Optum Clinformatics research database. No apparent trends needed to be accounted for in our analysis.
Total out-of-pocket expenditures for brand-name atorvastatin ranged from a high of $5.41 million in January 2011 to a low of $161 000 in May 2013. By contrast, out-of-pocket expenditures for generic atorvastatin started at $1.04 million in December 2011 and peaked at $1.96 million in January 2013 before falling to $1.75 million in May 2013.
Table 3 summarizes the estimated out-of-pocket spending for a 30-day supply of the most common formulation (20 mg) of brand-name, authorized generic, and other generic atorvastatins during the 3 study segments. During the market exclusivity segment, the median monthly out-of-pocket spending was $17.50 (interquartile range [IQR], $10.02-$49.98). During limited generic competition, out-of-pocket spending for brand-name atorvastatin (median, $16.98; IQR, $8.76-$48.66) was similar to spending for the authorized generic (median, $19.98; IQR, $7.50-$54.90) and Ranbaxy’s generic (median, $17.70; IQR, $4.98-$51.48) atorvastatin. During full generic competition, out-of-pocket spending for brand-name atorvastatin (median, $30.00; IQR, $15.00-$91.38) was substantially higher than spending for the authorized generic (median, $5.52; IQR, $3.48-$19.98) or the other generic (median, $5.10; IQR, $3.36-$19.98) atorvastatins.
After expiration of market exclusivity for atorvastatin, the top-selling drug in the United States for 4 years, we examined prescription and spending data from a large commercial health insurance company. Using segmented regression methods, we found that prescription fills for brand-name atorvastatin only decreased slightly in the first 6 months, which included the introduction of a single generic and an authorized generic product. After full generic competition was permitted, brand-name atorvastatin fills decreased substantially, with an inflection point occurring approximately 7 months after loss of exclusivity. During the segment of limited generic competition, out-of-pocket costs did not substantially differ for brand-name, authorized generic, and generic atorvastatin. After full generic competition, out-of-pocket costs were substantially lower for the generic drugs.
The end of a drug’s patent exclusivity does not necessarily lead to immediate, substantial changes in patients’ out-of-pocket spending. Prior studies17-23 have characterized the market dynamics accompanying loss of marketing exclusivity for prescription drugs, showing that overall drug prices and brand-name market share tend to decrease with an increasing number of generic competitors.13 Such outcomes, however, can be delayed owing to the 180-day generic marketing exclusivity period and the introduction of authorized generic drugs, as was the case with atorvastatin. Delays in the availability of generic versions may be important because brand-name Lipitor has not been shown to be clinically superior to generic atorvastatin.24 On the contrary, in part because of the lower cost of generic statins, patients initiating therapy to lower lipid levels with these products have better adherence and lower risk for hospitalization and death than patients initiating therapy with brand-name statins.25
When the 180-day generic exclusivity period was conceived, the goal was to provide incentives to generic competitors to challenge potentially invalid patents protecting brand-name products.26,27 In 1984, such a provision was useful to help stimulate the relatively small generic drug market. In recent years, however, many questionable brand-name patents have remained in effect because of litigation settlements between brand-name and generic companies.28 Such settlements can be in the financial interests of brand-name and generic manufacturers, but not of patients, because they allow patents to persist that might have been overturned. The 180-day period can even hinder generic competition. For the blood pressure drug valsartan (Diovan), the company holding the 180-day market exclusivity did not initially receive FDA approval to launch its generic version, in part owing to manufacturing deficiencies. The course of events led to a 20-month delay in generic competition that effectively prolonged exclusivity for the brand-name version; the manufacturer valued the extra sales at $100 million per month.29
Authorized generic drugs might be viewed as a net benefit for consumers by offering a lower-cost option than the brand-name version.13 A 2011 report from the Federal Trade Commission found that entry of authorized generics slightly lowered generic drug prices,15 although we found no difference in patients’ out-of-pocket costs. The Federal Trade Commission also concluded that brand-name manufacturers launch authorized generics to capture revenue from the first generic challenger during the 180-day generic exclusivity period, which could reduce in the long term the incentive for generic firms to challenge potentially invalid patents.15 Our findings suggest that the FDA and Congress should consider whether the 180-day marketing exclusivity period is still useful and should be revised or eliminated.
Our study has limitations. We only examined trends in use and out-of-pocket spending with data from a single commercial claims database and for a single brand-name medication, albeit one of the best-selling drugs in the past 20 years.30 Our findings may not generalize to large public payors such as Medicaid or Medicare Part D or to patients who pay for prescriptions directly. Reports suggest that Pfizer aggressively and differentially negotiated with private payors and pharmacy benefit managers to win preferred formulary status and exclusive rights to mail order services for brand-name atorvastatin.6 The likely intent was to maintain market share as Lipitor’s market exclusivity was set to expire.2,5
Another limitation inherent to segmented times series analyses is confounding by coexisting interventions. For example, other market forces such as Pfizer’s $4 copayment discount card may explain some of the trends of use that we observed. Beneficiaries may have chosen to use brand-name Lipitor if copayment discount cards made their out-of-pocket payments equal to those for generic atorvastatin.
Our analysis of changes in atorvastatin prescribing and costs found delays in generic uptake and high levels of out-of-pocket spending during the first 180 days after Lipitor lost market exclusivity. These delays slowed changes in drug use and decreases in patients’ out-of-pocket costs.
Corresponding Author: Jing Luo, MD, Program on Regulation, Therapeutics, and Law (PORTAL), Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital, 1620 Tremont St, Ste 3030, Boston, MA 02120 (email@example.com).
Accepted for Publication: May 10, 2016.
Published Online: June 27, 2016. doi:10.1001/jamainternmed.2016.3384.
Author Contributions: Dr Luo had full access to all the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.
Study concept and design: Luo, Gagne, Kesselheim.
Acquisition, analysis, or interpretation of data: All authors.
Drafting of the manuscript: Luo.
Critical revision of the manuscript for important intellectual content: All authors.
Statistical analysis: Luo, Donneyong, Gagne.
Obtained funding: Avorn, Kesselheim.
Administrative, technical, or material support: Seeger, Kesselheim.
Study supervision: Avorn.
Conflict of Interest Disclosures: None reported.
Previous Presentation: This study was presented at the 2016 Annual Research Meeting of AcademyHealth; June 27, 2016; Boston, Massachusetts.
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