Pharma Blog Watch
Generics vs. Branded Drugs (World of DTC Marketing)
Pharmaceutical companies will do anything to continue sales of successful products, including developing a new product to replace an old one, writes Richard Meyer. But are the new products, such as Cymbalta and Nexium, more effective than the old ones, he asks.
“GM’s union notes that they spent $110 million on prescriptions for Nexium last year. Using the generic brand could have saved over $70 million in a $1.3 billion health plan. Pharma had better take notice, because drug costs are going to come under more and more scrutiny,” Meyer writes.
Drugmakers are so determined to replace blockbuster drugs because they put so much money into developing the market, and it doesn’t take much effort to introduce a new product, he says. A lot of money could be cut from healthcare costs if patients were switched from brand drugs to generics, according to the blog.
“Drug companies need to do a lot more to develop drugs that have clear advantages over generic drugs. They especially need to do head-to-head clinical studies against the older drug to show the difference in patient outcomes,” he writes.
Iowa Sues 78 Drugmakers Over Medicaid Pricing (Pharmalot)
Iowa is following in the footsteps of more than 20 states that have filed lawsuits to recover money they say was overpaid to drugmakers, Ed Silverman writes. Iowa Attorney General Tom Miller said 78 drug companies inflated prices for Medicaid patients, costing the state millions of dollars over several years.
“Iowa’s Medicaid program spent more than $1.6 billion for drugs from 1992 to 2005, the time covered by the lawsuit. Miller doesn’t know how much money the state might have overpaid, but he says the price of drugs paid by Iowa, which is based on an average wholesale price reported by the companies, ended up being far more than what was paid by retail pharmacists,” Silverman writes, citing an article from The Sioux City Journal.
According to Miller, Glaxo reported an average wholesale price of $39.90 for Zantac but sold the same drug to retail pharmacists for $9.80, Silverman says. Another company, Pfizer, allegedly reported an average wholesale price of $169.36 for Xanax but sold it to retail pharmacists for $10.10, Miller said.
“The 167-page complaint, filed in U.S. District Court in the Southern District of Iowa, accuses the companies of violating the federal Medicaid statute, breach of contract, violating the Iowa Consumer Fraud Act, fraud and unjust enrichment,” Silverman writes. Miller said he expects the case to be consolidated with similar state lawsuits pending in federal court.
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