Generic drugs

Generic Drugs Authorized “Insufficient” to Improve Affordability of Medicare Part D

20 October 2021

2 minutes to read

Source / Disclosures

Disclosures: The authors do not report any relevant financial disclosures.

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Generic drugs licensed for insulin and direct-acting antiviral agents may reduce out-of-pocket expenses for patients, but are unlikely to save money for Part D plans or Medicare, according to the data.

“Compared to brand name drugs, authorized generic versions of direct-acting antiviral agents for hepatitis C and insulin are said to have resulted in lower out-of-pocket expenses for Medicare beneficiaries.” Stacie B. Dusetzina, PhD, associate professor of health policy and Ingram associate professor of cancer research at Vanderbilt University School of Medicine in Nashville, Tennessee, and colleagues wrote in JAMA Internal Medicine. “However, coverage for authorized generic drugs was limited for some Part D beneficiaries, with many beneficiaries covered by plans covering only brand name drugs. For Part D plan sponsors, this decision likely reflects rational economic behavior, as the net prices (after rebates) of brand name drugs in these classes may be similar to or lower than the net prices of authorized generic drugs.

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As Healio previously reported, manufacturers of insulin and direct-acting antiviral agents for the treatment of hepatitis C have recently introduced authorized generic alternatives to their patented branded products at a time when brand name drugs faced no immediate threat of generic competition. Authorized generic drugs have list prices at least 50% below the list price of brand name drugs; the announcements followed close scrutiny in Congress on high drug prices.

In a cross-sectional study, Dusetzina and colleagues analyzed data from the Medicare Prescription Drug Plan form and third quarter 2020 pricing information files and Medicare Part D enrollment for September 2020. Researchers assessed the coverage of four branded formulations of direct-acting insulin and antivirals and their authorized generic formulations: sofosbuvir and velpatasvir fixed-combination tablets (Epclusa, Gilead), ledipasvir and sofosbuvir tablets (Harvoni, Gilead), insulin lispro (Humalog, Eli Lilly) and insulin aspart (Novolog, Novo Nordisk).

“We selected these drugs because we believe they are the only ones to have launched generic formulations authorized more than a year before the expected expiration of the patent and have faced no traditional generic competition in the third quarter of 2020. “the researchers wrote.

The main results were the weighted coverage of the formulary by beneficiaries of branded products and authorized generics; disbursements by the beneficiary; and the prepayment plan, manufacturer and Medicare expenses on branded products and authorized generics.

As of the third quarter of 2020, 97% of beneficiaries were on plans that covered only brand name drugs or both brand name drugs and authorized generics. About 3% of beneficiaries were on plans that covered only authorized generic drugs.

The researchers found that the list prices of authorized generic drugs were 67%, 62% and 50% lower than the list prices of Epclusa, Harvoni and each branded insulin product, respectively. “Medicare beneficiaries using licensed generics could save $ 270 per year for 12 vials of Humalog and $ 2,974 for a full treatment of Harvoni,” the researchers wrote.

The plans, however, have limited incentives to encourage the use of authorized generics; discounts for brands likely exceed savings available with authorized generics, especially for beneficiaries whose spending reaches the Medicare Part D coverage gap.

“Ultimately, the availability of licensed generic options for products that do not face traditional generic competition is insufficient to improve affordability for Medicare beneficiaries,” the researchers wrote. “The results of this study suggest that efforts to change Medicare Part D benefits should also ensure that incentives for plans and beneficiaries are properly aligned and that beneficiaries are not paying too much for drugs that are better.” value for their health plan and Medicare program. “

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Joan J. Dean

The author Joan J. Dean