The Price We Pay

By LINDA MARSA

Oct. 16, 2000 12 AM PT

TIMES STAFF WRITER

Alden Bohlig spent his life teaching teenagers mathematics, so he knows when the numbers don’t add up. Why spend up to $30 a month for a brand-name arthritis drug when he could pay only $5 by taking the generic version instead?

By substituting generics for his arthritis and other medication he takes regularly, Bohlig says he saves about $85 each month. “Why pay a premium for the same thing?” asks the 82-year-old retired school teacher from Long Beach. “I appreciate that the drug companies invest money in research. But I don’t want to fatten their bank accounts at my expense.”

Bohlig is on to something. Like millions of other Americans, he’s fed up with the rising costs of prescription drugs, which have been growing four times faster than the rate of inflation. These price hikes are a bitter pill for many of the elderly, who consume the lion’s share of prescription drugs, and their plight has become a hot issue in the presidential campaign. But the increases affect everyone, especially those with chronic illnesses and the uninsured.

While health insurers have expanded coverage for prescription drugs, 31% of California’s 7.5 million Medicare beneficiaries and 23% of those younger than 65 still have no drug benefits, according to a recent study. And consumers with coverage are affected more indirectly, through higher co-payments and deductibles, and escalating insurance premium costs.

Largely overlooked in the heated debate over drug spending are simple steps consumers can take today to save money. One recent study found that a 10% increase in generic drug use in the United States would cut drug costs by more than $11 billion annually.

“Every percentage point of increased usage translates into a savings of $1 billion annually,” says Tim R. Covington, a pharmacist at Samford University in Birmingham, Ala., which released the study last month.

As Bohlig discovered, switching to the generic version of prescription drugs can ease some of the sticker shock at the local pharmacy. When there is no generic substitute, other medicines in a family of drugs--say, antidepressants or ulcer medications--may be less expensive. Sometimes, over-the-counter remedies like Motrin or Zantac can be substituted for their costlier, prescription-strength versions.

While Americans may complain about escalating drug prices, when it comes to medications, we usually want a Ferrari, not a Hyundai. Despite an avalanche of evidence to the contrary, there’s a lingering perception that generics are somehow inferior to their brand-name counterparts. So perhaps it’s not surprising that even though about 70% of prescription drugs have generic twins, use of these drugs has remained frozen at 40% to 42% of total U.S. prescriptions since 1993, according to the Generic Pharmaceutical Assn., a Washington, D.C.-based trade group.

Some of the skepticism, says Gary J. Buehler, acting director of the Food and Drug Administration’s Office of Generic Drugs in Rockville, Md., “stems from consumers’ impression that if something costs less, it can’t be as good.” When they go to the drugstore with a splitting headache, the painkiller in the plain wrap just doesn’t seem as potent as the brand name, even though they both have the same active ingredient.

This, more than anything else, is a testament to the powers of the placebo effect. Drug makers subtly reinforce this psychology each time they introduce newer, more expensive drugs, which their ads claim are vast improvements over existing treatments to justify the inevitable price hikes. “But newer doesn’t always mean better,” says Dr. Carol Ben-Maimon, chairwoman of the Generic Pharmaceutical Assn.

Doctors Are Used to Brand-Name Drugs

Doctors are brand-happy, too, and get seduced by the “newer and pricier equals better” sales pitches made by savvy drug makers, according to a study released this month by the Mount Sinai School of Medicine in New York. The researchers found that doctors are often uninformed about the price of medicines and unaware of less costly alternatives that were equally effective.

“So much of what physicians learn about drugs comes from the weekly visits of the Kens and Barbies,” says Robert Seidman, vice president of pharmacy for Blue Cross of California. These are the pharmaceutical company salespeople whose job is to push their products, not those of their rivals. They shower doctors with free drug samples, in part to encourage them to prescribe the product.

Once patients, especially those in fragile health, become accustomed to a particular drug, doctors are reluctant to change a winning formula. Reinforcing brand preferences is the direct-to-consumer advertising of medicines, which boosts brand-name awareness and induces consumers to ask for the drug by name. The ads are everywhere: Television spots extol the wonders of Meridia, an appetite suppressant, or the ulcer drug, Prolisec, while glossy magazine spreads laud the benefits of drugs like Claritin, which combats allergy symptoms.

The campaigns have earned billions for the industry. The 25 most-advertised medicines accounted for 40% of the rise in retail drug spending in 1999. But these drugs aren’t necessarily superior to rivals--they’re just better promoted.

Despite generics’ dowdy image, they really do behave in the body like their glittery, brand-name counterparts and are subject to the same regulatory scrutiny by the FDA. They must contain the same active ingredient as the brand-name product, and generic drug makers have to prove their product is just as safe and effective with the same quality, purity and potency.

“Our testing assures that the products are interchangeable,” says the FDA’s Buehler.

About the only time problems could crop up is with the tiny handful of drugs that have narrow therapeutic margins. What this means is that the rate at which the drug is absorbed into the blood stream has to be carefully monitored, and small variations can make a huge difference. If too much is taken up, the drug could be toxic, while too little can hamper its effectiveness.

“Once someone is stabilized on a particular drug regimen, it’s best to stick with that product,” says Fred G. Weissman, associate dean for academic affairs at the USC School of Pharmacy.

Generic Costs Tied to Patents on Formulas

The reason why generics are cheaper has nothing to do with quality--it’s just the way the patent laws work. Normally, a brand-name company spends anywhere from $300 million to $500 million to shepherd a new drug through the lengthy development process. Consequently, drug makers are granted a 20-year patent on these novel formulas, which gives them the exclusive right to sell the drugs while the patent is in effect so they can recoup their investment.

When the patent expires, however, other companies can sell generic versions that have been cleared by the FDA. Since generic manufacturers aren’t starting from scratch, their development costs are a fraction of those of the innovators. An injection of good old-fashioned capitalistic competition helps, too: Having more than one product on the market also drives down the price. The savings can be substantial. The average cost of generic drugs in 1999 was $18.45 versus $61.33 for a comparable brand name, which can add up to hundreds of dollars a month for people taking several medications. On specific drugs, the differences are even more striking. The antibiotic Keflex has a $50 price tag while its generic counterpart Cephalexine costs about $7.

However, some widely used drugs, such as Prozac and Claritin, are still under patent protection and continue to command top dollar. But even if their drug of choice is still under patent, consumers can find cheaper drugs that do the job. Prices on other medications that have the same method of action on the body and are part of the same class--the so-called “me, too” or copycat drugs--may be less. Prilosec, for example, a top-selling antacid, costs $4 per pill. But tablets of Prontinex, the newest member of this drug family, costs $2.50 per pill. “ ‘Me, toos’ can represent modest advances--perhaps they have fewer side effects, or you only have to take them once a day instead of every eight hours,” says Samford University’s Covington. “But not always. A lot of times, copycat drugs aren’t any better, and they have to compete purely based on cost.”

With drug prices skyrocketing, there is a growing recognition that using generics makes good financial sense. Many health care plans, like Blue Cross of California, offer financial incentives, such as higher co-payments for brand-name drugs, to members who use generics. A few health plans require members to foot the entire bill for brand-name drugs.

Kaiser Permanente, the giant health plan, has a different approach for its Southern California members, who pay the same co-payment for generic or brand-name drugs. Kaiser doctors, however, are encouraged to prescribe the least costly drug when appropriate. As a result, about 60% of drugs dispensed to Kaiser members are generic--nearly 50% more than comparable rates nationwide. This statistic is revealing because it illustrates a change in doctors’ prescribing behavior in a tightly controlled health care organization such as Kaiser in an effort to counter the marketing muscle of the giant drug companies.

The National Consumer League, a consumer group headquartered in Washington, D.C., has also mounted a campaign to educate consumers about the benefits of generics and has a pamphlet that answers some of the most commonly asked question about these drugs on its Web site (https://www.nclnet.org).

Patients will have more choices soon, as a number of widely prescribed drugs lose patent protection and generic versions reach the market. Patents have expired or are due to lapse within the next year on such drugs as Prozac, Prilosec and the blood pressure medications Vasotec, Hytrin and Zestril.

Last month, a bill was introduced in Congress by Sens. John McCain (R-Ariz.) and Charles Schumer (D-N.Y.) to speed approval of generic drugs. The bill, the Greater Access to Affordable Pharmaceuticals Act, is aimed at closing legal loopholes that enable pharmaceutical companies to extend their patent protection and prevent competition.

“They use legal maneuvers to delay the approval of competing generics,” says Travis Plunkett, legislative director for the Consumer Federation of America, a consumer watchdog group in Washington, D.C., that supports the proposed legislation.

Similarly, the Federal Trade Commission said last week that it will investigate whether brand-name and generic drug makers have conspired to delay the sale of less expensive medications. In at least one instance, a brand-name drug maker has paid a generic drug firm millions of dollars to not produce competing products.

Meanwhile, consumers don’t have to blindly follow orders when their doctor writes up a prescription for an expensive medication. They should ask their physician or pharmacist about the most cost-effective drug to treat their disorder. They might discover the less glamorous generic does the trick, which would make prescription drug costs easier to swallow.

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How 10 Top-Selling Generics Stack Up Against Brand Names

Prescription drugs don’t have to be prohibitively expensive. Here’s a look at the cost of generic drugs compared with their brand-name counterparts. Brand-Name Therapeutic Use Price Generic Name and Price

1. Pain Relief

Lorcet (30 tablets): $40.83

Hydrocodone (30 tablets): $14.39

2. Blood Pressure

Tenormin (30 tablets): $32.66

Atenolol (30 tablets): $4.29

3. Blood Pressure

Lasix (30 tablets): $5.98

Furosemide (30 tablets): $5.49

4. Antibiotic

Amoxil (30 capsules): $6.73

Amoxicillin (30 capsules): $6.40

5. Asthma

Proventil (inhaler): $32.66

Albuterol (inhaler): $11.24

6. Pain Relief

Darvocet-N (30 tablets): $23.47

Propoxyphene N-APAP (30 tablets): $8.21

7. Antibiotic

Keflex (30 capsules): $49.71

Cephalexin Monohydrate (30 capsules): $7.46

8. Anxiety / Panic Disorder

Xanax (30 tablets): $27.10

Alprazolam (30 tablets): $5.49

9. Pain Relief

Motrin (30 tablets): $7.13

Ibuprofen (30 tablets): $5.49

10. Pain Relief

Tylenol/Codeine 3 (30 tablets): $12.66

Acetaminophen-Codeine 3 (30 tablets): $6.33

Sources: Prices from Drugstore.com; drug rankings from Drug Topics

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More Competition Coming for Popular Prescription Drugs

Many popular drugs will soon lose patent protection, which means they will no longer have a market monopoly. In most cases, less costly generic drugs hit the market soon after patents expire.

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BRAND NAME GENERIC NAME USE PATENT EXPIRES Pepcid famotidine duodenal ulcers Oct. 17, 2000 Prozac fluoxetine HCL depression Feb. 2, 2001 Prilosec omeprazole duodenal ulcers April 1, 2001 Mevacor lovastatin cholesterol June 15, 2001 Zestril lisinopril hypertension Dec. 30, 2001 Axid nizatidine duodenal ulcers April 12, 2002 Relafen nabumetone arthritis Dec. 13, 2002 Blaxin clarithromycin respiratory infections May 23, 2003 Diflucan fluconazole infection Jan. 28, 2004 Claritin loratadine allergies April 21, 2004

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Source: Generic Pharmaceutical Assn.

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Drugs That Need Careful Consideration

Narrow therapeutic index drugs (NTIs) must be carefully monitored in each patient to ensure they are safe and effective. Here’s a list of the most common NTIs.

Brand Name: Tegretol

Generic: Carbamazepine

Use: to control seizures

Brand name: Theo-Dur

Generic name: Theophylline

Use: oral bronchodilator to treat asthma, bronchitis, emphysema

Brand Name: Lithonate

Generic Name: Lithium Carbonate

Use: treats manic depression

Brand name: Coumadin

Generic name: Warfarin sodium

Use: anticoagulant (blood thinner)