With No Competition from Generics, Drug Prices Rise

Since 2013, the price of lomustine, an off-patent cancer drug introduced in 1976, has risen by 1,400 percent in the United States. The drug is used to treat brain tumors and Hodgkin lymphoma and has no generic competition, giving seller NextSource Biotechnology significant pricing power.

Lomustine is just one of the at least 319 drugs the U.S. Food and Drug Administration (FDA) has identified as having an expired U.S. patent but no generic copies. As part of a broader effort to encourage lower drug prices and more competition for these drugs the agency has pledged to speed up review of any applications to market generic copies of the drugs on this list.

Generic-drug makers have to carefully choose which drugs to manufacture because there can be significant entry costs associated with obtaining regulatory approval and dedicating manufacturing capacity, according to Rena Conti, PhD, associate professor of health policy and economics at the University of Chicago. Many of the drugs on the FDA’s list are intended to treat rare diseases with small patient populations, and companies may decide it is not worth the investment. Lomustine, for instance, is not widely prescribed. According to the Centers for Medicare and Medicaid Services, Medicare Part D prescription-benefit plans paid for 1,694 prescriptions in 2015.

Some physicians are critical of the price hikes. “This is simply price gouging, period,” Henry S. Friedman, MD, professor of neurosurgery at Duke University School of Medicine, told the Wall Street Journal. “People are not going to be able to afford it, or they’re going to pay a lot of money and have financial liability.”

Source: The Wall Street Journal, December 25, 2017.