HemOnc Today's PharmAnalysis

HemOnc Today's PharmAnalysis

July 19, 2018
5 min read

Generic drugs may not reduce costs of cancer care as much as expected

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Photo of Stacey Dusetzina 2018
Stacie B. Dusetzina

The availability of generic drugs may not reduce the costs of cancer care as much as anticipated, according to results of a study published in Health Affairs.

Stacie B. Dusetzina, PhD, associate professor of health policy and Ingram associate professor of cancer research at Vanderbilt University School of Medicine, and Ashley L. Cole, doctoral candidate in the division of pharmaceutical outcomes and policy at Eshelman School of Pharmacy at The University of North Carolina at Chapel Hill, examined the pricing and use of imatinib and other tyrosine kinase inhibitors that essentially have transformed chronic myeloid leukemia from a fatal malignancy into to a manageable chronic condition.

“We specifically looked at imatinib because we know that it is a very high-value drug, [it] is used chronically, and the price has increased over time. We expected that generic entry would be of particular interest for this product,” Dusetzina told HemOnc Today.

The first branded version of imatinib (Gleevec, Novartis) was priced at $4,000 per bottle when it came on the market in 2001, and the price increased to nearly $10,000 per bottle by 2015.

A generic version of imatinib came on the market in early 2016, and the expectation was that the cost of the generic would come down considerably following a standard 6-month exclusivity period. However, Dusetzina and Cole determined the price of the generic version only declined by 10% in the 20 months after its introduction on the market.

HemOnc Today spoke with Dusetzina about the study, the possible explanations for why the price of generic imatinib did not decline as much as many assumed it would, the implications of these results, and how the perception among patients and providers that a brand-name drug is superior to a generic drug can be overcome.


Question: How did this study come about?

Answer: We wanted to understand how generic entry of prescriptions would work for very expensive drugs. Recommendations being made about how to increase affordability for prescription drugs have focused on expediting generic entry as a key solution. The idea is that, once the generics are available, patients will switch to those and both patients and their insurers will save money. When we talk about generic entry, we usually talk about examples of commonly used drugs — such as cholesterol-lowering drugs — for which the generic price is a small fraction of the original brand-name drug price. It was not as clear whether the same price reductions could be expected for high-priced drugs that are used by a much smaller number of people, like orally administered cancer drugs.


Q: How did you conduct the study?

A: We used an administrative claims database that records health care transactions among people who have private or commercial health insurance. These records are created whenever someone uses their insurance to pay for a drug and include information about what drug was filled, when it was filled, and how much the insurer and patient paid. We were able to track prescription refills over time for the brand and generic form of imatinib and two other drugs used to treat CML.


Q: What did you find?

A: Not surprisingly, we found the price for the brand-name version of imatinib had increased over time. This is consistent with other studies and trends seen for other brand-name cancer therapies. We also looked at the price reduction when the generic version of imatinib came on the market. After about 20 months on the market, we only saw a small decrease in the price of the generic drug relative to the brand-name version — an 8% reduction during the first year and a 10% reduction during the second year that the drug was on the market. This is quite low even when we think about products that have a few generic competitors. We normally see a much larger price reduction in that timeframe.


Q: Can you offer insights into why the brand - name drug price did not decrease as much as expected once the generic formulation became available?

A: The number of generic manufacturers really matters. Many of the manufacturers of drugs used for orphan conditions or for small patient populations typically have a low number of manufacturers that produce generics. Three competitors entered the market for imatinib during our study timeframe. We think this has something to do with the lack of price reductions because, with only three entrants, there is not enough competition to bring the generic price down. At the end of 2017, immediately outside of the time horizon of our study, another generic entered the market and it actually appeared like it had a significant impact on imatinib prices. In the beginning of 2018, when we used the online resources to look at cash prices that people may pay at the pharmacy, we found the price had decreased substantially to about $2,000 for a 30-day supply vs. the roughly $8,000 we observed through September 2017. Our data also only tell us what was paid by plans and the patient at the time the prescription was filled. If plans received rebates or discounts from the manufacturer after the sale, those amounts are not captured.



Q: What are the implications of these results for patients and insurance providers?

A: We saw a large shift in what drugs physicians were using to treat CML during the study period. In particular, 75% of patients diagnosed with chronic myeloid leukemia who were starting a tyrosine kinase inhibitor started on brand-name imatinib in 2010. By 2015, only 40% of patients were starting on brand-name imatinib. The rest were starting on newer second-generation treatments. When we looked at the drugs people started in 2017, generic imatinib represented only 28% of all new starts, which limits savings for patients and insurers.


Q: You determined a considerable percentage of prescriptions for imatinib during the study period were dispense as written .” Why is this important?

A: We found this to be quite interesting, and we think that there could be a couple of things going on. First, there likely was promotion of branded drug use, encouraging clinicians to dispense as written for branded imatinib. Second, there may be some lingering concern regarding the exchangeability of generics and brands. In this very high-risk situation of cancer — and for drugs that people have used for a long time and trust — providers and patients may be uncomfortable switching to a generic version. There is a need for education and understanding about the exchangeability of these products.


Q: How can the perception among patients and providers that the brand drug is superior to the generic drug be overcome ? If it is overcome, could that help bring prices down?

A: It is hard to say. Although we do observe a large proportion of drugs being dispensed as written, we do not know the motivation behind this. If this is a concern about the effectiveness, perhaps educational efforts that focus on the clinical benefits and any potential challenges would be worthwhile. I know this has been discussed in other areas outside of oncology, and evidence suggest that brands and generics are largely interchangeable. Bioequivalence testing is also required to ensure that the drugs really work as well as one another. Education is the only way that we can counteract these misperceptions.


Q: Is there anything else that you would like to mention?

A: Generic entry is one way that we hope to eventually reduce spending on prescription drugs and help patients have access to more affordable treatments. When we identify challenges like lower-than-expected price reductions or low rates of generic drug use, it makes us wonder if generic entry will be effective for helping to reduce drug spending in the long run. – by Jennifer Southall



Dusetzina SB and Cole AS. Health Aff (Millwood). 2018;doi:10.1377/hlthaff.2017.1684.

For more information:

Stacie B. Dusetzina, PhD, can be reached at Vanderbilt University, 2301 Vanderbilt Place, Nashville, TN 37235; email: s.dusetzina@vanderbilt.edu.

Disclosure: Dusetzina reports no relevant financial disclosures.