Blog | Tuesday, July 12, 2011

QD: News Every Day--Generics far more cost-effective than thought


Generic medications appear to be far more cost-effective than previously reported, concluded a team of Harvard professors. But, physicians and patients aren't adopting them wholeheartedly.

Patents of 20 drugs with annual sales of more than $1 billion expired or will do so between 2010 and 2013, including Lipitor and Plavix, the highest- and second-highest revenue producing drugs in the U.S. While highly effective generics provide low-cost options for chronic disease management, they are not always factored into cost analyses, and are sometimes viewed with concerns about their safety and efficacy.

The Harvard team revisited a 2008 study that used brand-name medication costs in an analysis of the cost-effectiveness of strategies to prevent adverse outcomes associated with cardiovascular disease and diabetes. The study found that up to 244 million quality-adjusted life-years could be gained over 30 years with appropriate preventive care. But, the study authors wrote, that "most prevention activities are expensive when considering direct medical costs."

The Harvard team recalculated figures from the 2008 research, using Centers for Medicare and Medicaid Services’ federal upper limit prices, which are the highest amount Medicaid can be charged for generics. The authors identified the most commonly prescribed drug on the federal upper limit list for each drug class and assigned an annual cost by calculating the mean of the available doses and adding two dollars a month for a dispensing fee.

Results appeared in Health Affairs. The authors disclosed research funding from CVS Caremark.

After the cost model was updated with current prices, preventive care using generics appears far more cost-effective than was previously reported. For example, reducing blood pressure in nondiabetic patients costs $7,753 per quality-adjusted life-year with generic medication, vs. $52,983 described in the 2008 study. Glucose control would cost only $1,022 per quality-adjusted life-year with generic pricing, vs. $48,759 reported in the 2008 study

Despite the potential cost savings, the Harvard team cited its previous research that suggested one-fourth of physicians are concerned about the safety and of generic drugs, and that while patients know that generics offer greater value and generally support their use, only a minority prefer to use generics themselves.