Dataset Information

Avoidance of generic competition by Abbott Laboratories' fenofibrate franchise.

ABSTRACT: The ongoing debate concerning the efficacy of fenofibrate has overshadowed an important aspect of the drug's history: Abbott Laboratories, the maker of branded fenofibrate, has produced several bioequivalent reformulations that dominate the market, although generic fenofibrate has been available for almost a decade. This continued use of branded formulations, which cost twice as much as generic versions of fenofibrate, imposes an annual cost of approximately $700 million on the US health care system. Abbott Laboratories maintained its dominance of the fenofibrate market in part through a complex switching strategy involving the sequential launch of branded reformulations that had not been shown to be superior to the first-generation product and patent litigation that delayed the approval of generic formulations. The small differences in dose of the newer branded formulations prevented their substitution with generics of older-generation products. As soon as direct generic competition seemed likely at the new dose level, where substitution would be allowed, Abbott would launch another reformulation, and the cycle would repeat. Based on the fenofibrate example, our objective is to describe how current policy can allow pharmaceutical companies to maintain market share using reformulations of branded medications, without demonstrating the superiority of next-generation products.

SUBMITTER: Downing NS

PROVIDER: S-EPMC3636774 | biostudies-literature | 2012 May

REPOSITORIES: biostudies-literature

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Avoidance of generic competition by Abbott Laboratories' fenofibrate franchise.

Downing Nicholas S NS Ross Joseph S JS Jackevicius Cynthia A CA Krumholz Harlan M HM

Archives of internal medicine 20120501 9

The ongoing debate concerning the efficacy of fenofibrate has overshadowed an important aspect of the drug's history: Abbott Laboratories, the maker of branded fenofibrate, has produced several bioequivalent reformulations that dominate the market, although generic fenofibrate has been available for almost a decade. This continued use of branded formulations, which cost twice as much as generic versions of fenofibrate, imposes an annual cost of approximately $700 million on the US health care sy ...[more]

PMID: 22493409

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Project description:ImportanceDuring the last decade, increases in drug prices for commonly prescribed dermatologic medications have outpaced the rate of inflation, national health care growth, and reimbursements. Among nondermatologic medications, studies have shown a role for robust generic market competition in reducing drug prices. The association between competition and the costs of topical dermatologic generic drugs has not been evaluated.ObjectiveTo characterize the association between changes in drug price and the number of US Food and Drug Administration (FDA)-approved manufacturers among the most commonly used topical dermatologic generic products.Design, setting, and participantsThis retrospective cost analysis of the most commonly prescribed topical dermatologic generic drugs used cumulative annual claims data from the Medicare Part D Prescriber Public User File to identify 597 dermatologist-prescribed drugs with more than 10 claims. The number of manufacturers and the price per unit were identified from the FDA Orange Book and the National Average Drug Acquisition Cost (NADAC) database, respectively, for 2013 through 2016. Drugs that were nondermatologic, were not topically administered, were missing NADAC data, were lacking a generic formulation, or had fewer than 400 claims were excluded.Main outcomes and measuresPrimary outcomes included per-unit drug price and number of FDA-approved manufacturers. Pricing measures were adjusted for inflation and are reported in 2016 dollars.ResultsThe present analysis included 116 topical dermatologic generic formulations, representing 70.5% of the total Medicare Part D dermatologist-coded claims from 2015. Drug formulations with 1 to 2 manufacturers during the study period sustained a median percentage increase in price of 12.7%, whereas those with more than 6 manufacturers had a median percentage decrease in price of 20.5%. Formulations with 1 to 2 manufacturers had a 20.6%, 19.5%, and 33.2% higher percentage increase in price than those with 3 to 4 manufacturers, 5 to 6 manufacturers, and more than 6 manufacturers, respectively. There was a statistically significant inverse association between the percentage change in drug price and median number of manufacturers (Spearman correlation coefficient, -0.26; P = .005).Conclusions and relevanceThe negative association between the change in drug price and the median number of manufacturers of generic topical dermatologic drugs indicates a role for market competition in controlling the costs of generic drug prices within dermatology. These findings support policies that facilitate robust market competition among topical dermatologic generic drugs produced by a limited number of manufacturers.

Project description:ImportancePrice decreases of biologic and biosimilar products in Medicare Part B have been minimal, even with biosimilar competition. Medicare reimburses clinicians for biologics and biosimilars differently than for brand-name and generic drugs, which has generated greater price reductions.ObjectiveTo characterize the nature of price competition among brand-name and generic drugs under Medicare Part B and to estimate the cost savings to the program of subjecting biologic and biosimilar therapies to a similar price competition.Design, setting, and participantsThis cohort study analyzed all brand-name drugs and their approved generic versions as well as biologics and biosimilars that were reimbursed under Medicare Part B from quarter 1 of 2005 to quarter 2 of 2021. Two separate data sets were created: brand-name and generic drugs as well as biologics and biosimilars data sets. Brand-name products with generic versions that were introduced before 2005 were excluded, and so were vaccines.ExposuresNumber of generic and biosimilar competitors over time.Main outcomes and measuresPrice change as a percentage of the brand-name drug or biologic price in the quarter before generic or biosimilar competition. Price change was modeled using a linear, fixed-effects time series regression, with the number of generic or biosimilar competitors as the main covariate. Time was expressed as the number of quarters since the first generic or biosimilar competitor entered the market. Savings were estimated by projecting the regression model of brand-name and generic drug competition to observed biologic and biosimilar competition and by applying the estimated price reduction to actual Medicare spending for those products from 2015 to 2019.ResultsOf the 988 Healthcare Common Procedure Coding System codes identified, 50 (5.0%) met the inclusion criteria for the brand-name and generic drug data set and 28 (2.8%) met the criteria for the biologic and biosimilar data set. The first generic competitor was associated with reduced drug prices by 17.0%, the second competitor with a 39.5% decrease, the third competitor with a 52.5% decrease, and the fourth and more competitors with a 70.2% decrease (price decline was measured from brand-name drug price before the first generic competitor rather than from price established with fewer competitors). If biologics and biosimilars were subject to the same Medicare reimbursement framework as brand-name and generic drugs, Medicare spending on these products was estimated to have been 26.6% lower ($1.6 billion) from 2015 to 2019.Conclusions and relevanceThis study found minimal uptake of biosimilars and limited price reductions for biologics and biosimilars under the current Medicare Part B reimbursement policy. Adopting the bundled biosimilar reimbursement structure for biologic and biosimilar therapies may be associated with substantial savings and encourage greater biosimilar market entry.

Dataset Information

Avoidance of generic competition by Abbott Laboratories' fenofibrate franchise.

Publications

Avoidance of generic competition by Abbott Laboratories' fenofibrate franchise.

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