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Take the Generic Drug, Patients Are Told — Unless Insurers Say No

News  |  By ProPublica  
   August 08, 2017

In recent months, some insurers and benefit managers have insisted that patients forgo generics and buy brand-name drugs. “It’s Alice-in-Wonderland time in the drug world,” says one physician.

This article first appeared August 06, 2017 on ProPublica.

by Charles Ornstein, ProPublica, and Katie Thomas, The New York Times

It's standard advice for consumers: If you are prescribed a medicine, always ask if there is a cheaper generic.

Nathan Taylor, a 3-D animator who lives outside Houston, has tried to do that with all his medications. But when he fills his monthly prescription for Adderall XR to treat his attention-deficit disorder, his insurance company refuses to cover the generic. Instead, he must make a co-payment of $90 a month for the brand-name version. By comparison, he pays $10 or less each month for the five generic medications he also takes.

"It just befuddles me that they would do that," said Taylor, 41.

A spokesman for his insurer, Humana, did not respond to multiple emails and phone calls requesting comment.

With each visit to the pharmacy, Taylor enters the upside-down world of prescription drugs, where conventional wisdom about how to lower drug costs is often wrong.

Consumers have grown accustomed to being told by insurers - and middlemen known as pharmacy benefit managers - that they must give up their brand-name drugs in favor of cheaper generics. But some are finding the opposite is true, as pharmaceutical companies squeeze the last profits from products that are facing cheaper generic competition.

Out of public view, corporations are cutting deals that give consumers little choice but to buy brand-name drugs - and sometimes pay more at the pharmacy counter than they would for generics.

The practice is not easy to track, and has been going on sporadically for years. But several clues suggest it is becoming more common.

In recent months, some insurers and benefit managers have insisted that patients forgo generics and buy brand-name drugs such as the cholesterol treatment Zetia, the stroke-prevention drug Aggrenox and the pain-relieving gel Voltaren, along with about a dozen others, according to memos and prescription drug claims that pharmacies shared with ProPublica and The New York Times. At the same time, consumers are sounding off on social media.

Now it appears the practice is spreading to biosimilars, the competitors for expensive, complex biologic drugs that are beginning to arrive on the market.

Consumers have become increasingly angry over what they pay for drugs, and that outrage has caught the attention of lawmakers from both parties. Democrats have identified lowering drug prices as a pillar of their economic agenda, and President Donald Trump has raised the issue repeatedly. But for now, solutions have proved elusive.

The continued success of the brand-name drug Adderall XR, long after generic competitors arrived on the market, is a case in point.

Dr. Lawrence Diller, a behavioral pediatrician in Walnut Creek, California, said he began noticing "very odd things" going on with Adderall XR and other attention-deficit drugs about two years ago. He began receiving faxes from pharmacies telling him that he had to specify that patients required brand-name versions of the drugs.

Consumers taking other medications said they had experienced the same phenomenon. Lisa Hopkins, a disabled food and nutrition supervisor in Pennsylvania, went to fill a prescription for the anti-inflammatory Voltaren gel this year.

Hopkins, 52, said her pharmacist told her that her drug plan, CVS's SilverScript, denied her claim because it was for a generic.

"I said to the lady at the insurance company, ‘That's really, really odd to me,'" Hopkins said. "She said, ‘Yes. It's happening more and more that the name brand is covered but the generic isn't.'"

Hopkins has osteoporosis and bulging spinal disks and has been on disability for almost a decade. She is covered through Medicare and receives extra help from the government for her medications, lowering her out-of-pocket costs. That means that when her drugs cost a lot, taxpayers pay the bill. By law, Medicare cannot negotiate directly with drug manufacturers and instead gets a share of any rebates collected by insurers and benefit managers, like CVS Caremark, which operate Medicare's drug plans.

In an email, a spokeswoman for CVS Caremark, Christine Cramer, said consumers never pay more in the rare instances in which the company favors a brand-name drug over a generic. "This generally occurs when there is limited or no competition among generics," she said.

Pharmacists say they are noticing the trend, too, and it takes time to understand the denied claim and pursue a remedy, including sometimes calling the doctor. While favorable treatment for a brand-name drug doesn't happen all the time, it is startling when it does, said Robert Frankil, president of Sellersville Pharmacy Inc. in Pennsylvania, which owns two pharmacies.

"There's only one reason why they're requiring you to use a more expensive product," Frankil said. "Because somewhere down the road, somebody is earning more money."

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.


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