It is often said facetiously that the true measure of the success of an advertising campaign is that it compels its target to buy something that is not needed. By this measure, the pharmaceutical industry is the true master of the craft. What else explains the high proportion of the industry’s budget that goes to advertising and marketing spending more for ads than research! But that is a subject for some future blog or comment below. What I will highlight today is the stunningly successful campaign of the industry to induce us to pay $billions for overpriced brand-name drugs when the exact same drug (or one that is as or more safe and effective) is available for a small fraction of the price as a generic product.
What got me going today is the latest of a long series of full page ads in my local newspaper urging me to apply for Pfizer’s $4-CoPay Card that allows me to begin or continue to take brand-name Lipitor® to lower my cholesterol. The CoPay Card promises an out-of-pocket cost to me of from $4 to $50 per month for perhaps one year. The savings depends on whether or not I have prescription drug coverage as part of my health insurance, and how low my co-pays are. As usual, those without any health insurance pay the highest prices. Those of our neighbors do not have anyone negotiating discounts for them are stuck being billed for the full amount of whatever the healthcare industry thinks it can get away with.
Lipitor® may be the most successful pharmaceutical product ever, at least from the industry’s perspective, earning billions-and-billions of dollars for its maker. Some experts speculate that this success stems more from the effectiveness of marketing than any clinical superiority of the drug over available alternatives. It certainly seems that way to me. Unfortunately for Pfizer (the company that enjoyed this bonanza) the patent giving it a monopoly on this drug ran out last summer. I would have expected that the expiration of their patent would have opened the door for multiple generic manufacturers to jump into the market, but that did not happen. What did happen, as best as I can understand, is that Pfizer made a business deal with one of the big generic manufacturers that allowed it to extend its patent protection for another 6 months. Perhaps someone can explain to us as a comment how this can happen and not be an anti-trust issue. In any event, atorvastatin, the generic version of Lipitor®, finally became available on November 30, 2011. As expected this took a big bite out of Pfizer’s fortune.
Despite the new alternatives, Lipitor® continued to own a third of the market share for atorvastatin at the end of December. How can that be? Why would a rational person pay several times more for the same drug? A variety of hypotheses are offered: lazy or uninformed physicians and patients; people who are addicted to the shape and color of the pill; a continuing campaign of mis-information against the safety of generic drugs; the drug rebate system; and other non-rational explanations. Perhaps there are some valid reasons unknown to me that justify the continued prescription of Lipitor®. Indeed, Pfizer has told us in one of their ads that “your physician must have had some good reason to prescribe Lipitor to you.” Presumably this reason is other than the free lunches provided to the physician’s office.
To continue to keep its cash-cow alive, Pfizer arranged a combination of discounts and rebates [Please explain to me below how these are different than bribes or kick-backs.] to medical insurance companies and pharmacy benefit managers to induce them to continue to pay for Lipitor® and making it profitable for Pfizer to offer their $4-CoPay Card. The business deals outlined above are said to be legal and probably yielded Pfizer another $5 billion from the still-standing cow. In my view this result is a measure of the magnificent power of the pharmaceutical industry’s lobbying and the influence of its political cash contributions on our lawmakers. How great for the industry and how sad for the rest of us! I am prompted to ask, “Is anybody on the side of the drug-taker?”
Full disclosure: Up to two years ago, I took Lipitor personally. My physician prescribed it for me several years ago as my first-ever cholesterol-lowering drug. It worked well for me. I had a monthly copay of some $25 to $35, but my insurer (my former employer and co-workers in a self-insured plan) was paying a lot more than that on my behalf– much more than $120 monthly. I was lazy. What brought me to my senses was the $4 Prescription Program of Walmart. Walmart and a few other large pharmacies offer a list of generic drugs available for a monthly price of $4, or a three-month supply for $10. The long list contains tried and true drugs for most categories of disease. As a physician I had a long experience with most of them and it seems to me that the vast majority of patients can be well treated, at the very least initially, with the listed drugs. I asked my doctor to change my prescription of Lipitor® to pravastatin, the generic version of Pravachol®. My doctor had absolutely no problem with changing Lipitor® and another of my regular medicines to the generic ones on Walmart’s list. I now get a whole year’s worth of my cholesterol-lowering medicine for $40. That’s barely more than the previous copay for a single month. As it happens, my regular neighborhood chain drugstore was willing to match Walmart’s price to keep the rest of my family’s business. It was much less expensive for me to pay cash for two of my drugs outside of the structure of my regular health insurance coverage than to submit a claim. My insurer did not have to pay even one cent of the otherwise inflated costs! Of course as a result, I do not get credit for these expenses against my out-of-pocket maximum yearly deductible. How do we allow such craziness to continue? Is there any better reason not to embrace comprehensive healthcare reform? Why do we tolerate our legislators’ rejection of the ability of Medicare and Medicaid to negotiate drug prices on our behalf when other health insurers and the drug companies themselves are willing to engage in such contractual gymnastics?
In 2010, Consumer Reports prepared a rational and eminently medically justifiable analysis of cholesterol-lowering drugs including Lipitor® and others of the most frequently used “statin” group. As of today, at least 4 of this group of 8 drugs are available in a generic form. There is no meaningful medical reason apparent to me why these generic drugs cannot serve all the needs of patients for whom drug therapy of hypercholesterolemia is necessary. Believe me, I would not have switched personally if I thought for an instant that I would have been hurting myself medically! Although most of us who are lucky enough to still have health insurance may appear to benefit from having to pay out-of-pocket for only a part of our drug bills, all of the rest of the otherwise inflated cost of the prescriptions is nonetheless still being paid for by our private or government health insurance– our own personal premium and tax dollars! This is no free lunch! What a gigantic waste! Think of all the other things that could be done with the money.
Therefore, instead of just complaining about the high cost and poor quality of American medicine, I offer a rational, defendable, and simplifying partial solution. I address specifically the category of cholesterol-lowering statin drugs, but I see no reason why the framework should not be extended to every other category of drugs in which generic versions are available. Here it is. Not one single dollar of taxpayer money, nor of the premium paid by or on behalf of the beneficiary of a private or public health insurance program may go towards the purchase of Lipitor®, Mevacor® (lovastatin), Pravachol® (pravastatin), Zocor® (simvastatin), or any other brand-name drug in this group. If there are still people who insist they “need” the brand name, they are free to pay for the drug themselves outside of their insurance plan. There is absolutely no reason for the rest of us to subsidize their folly. If there are doctors who, for whatever reason, insist on continuing to prescribe the expensive brand names, they are free to defend their actions to their medical payers or state medical licensure boards. Perhaps these prescribers know something that the rest of us physicians should know, but do not. Any potential exceptions for medical necessity that might justify the continued prescription of a brand name instead of the generic will be rare enough that they can be handled by existing avenues of individual medical review.
The savings from the the above will be enormous if not stupendous. No one will lose a thing except the pharmaceutical companies, and that will not be a true loss. They and our insurers will be forced to develop more rational and fair business models. These companies need our help to move in that direction and in the end, we will all be better off. If you disagree, tell us why below. If you agree, lets do something about it instead of just complaining or allowing ourselves to be distracted. I will start by writing to my insurers (currently Medicare and Humana) and legislators asking them to stop the waste of my money or to justify current practices. Will you join me? I will post a sample letter later and you can sign-on or write your own letters that will give our insurers, regulators, and legislators the cover they need to change the status quo.
Peter Hasselbacher. MD
Reply by KHPI:
Peter H, you have been drinking the kool-aid served by the pharmaceutical industry. Don’t be embarrassed by that– most everyone else has also been imbibing for as long as the industry has existed. Think of drug companies as tobacco companies and you will be in a better position to resist the disinformation and propaganda. I was once at a Kentucky legislative hearing on generic drugs where a drug detail-person stood to say that she was not an expert on drugs, but went on anyway to say that brand-name drugs were better than generic ones. Our legislators bought into that just as they have been doing for at least the 30 years I have lived here. Kentucky has been extraordinarily generous to the pharmaceutical industry, even as it allowed the industry to help bankrupt Medicaid and many of our families.
In our now-and-forever-global economy, the distinction between made-in-America and made elsewhere is not very sharp. Raw ingredients for high-priced brand-name drugs may well come from foreign sources. The actual brand-name pills themselves are often manufactured on somebody else’s shores. Hopefully our Food and Drug Administration (FDA), which has oversight on drugs sold in the United States, will help keep us all safer. Of course, if we abolish the FDA along with the Commerce, Education, and that other one, all bets are off! What we need to worry more about than contaminated drugs is the ongoing capture of the FDA by the pharmaceutical industry it regulates.
Finally, why would you assume out-of-hand that American-made drugs would be safer than foreign-made ones? I have written about this before on this policy blog. To reinforce the point, in today’s paper we learn that Pfizer, the manufacturer [but where?] of Lipitor® had to recall 1 million packages of their widely used oral contraceptive Lo/Ovral-38® and the generic version they also make because they messed up the order of the pills in the blister packs such that the woman would not receive the active drug at the appropriate time. Let us also not forget, that Pfizer had to recall Lipitor® on more than one occasion because of manufacturing problems. The Lipitor® pills were not in fact made by Pfizer at all, and in the reports available to me, Pfizer would not name where the pills were made! So much for the transparency that is the keystone of quality.
Finally, in response to your obviously benighted belief that you are not paying that much extra for your personal brand-name drugs, I must remind you that the more you and your likeminded doctors and friends write and fill prescriptions for brand-name drugs, the higher your insurance premium will be. Your insurer is not doing you any favors: it only spends your money for you.
But Dr. Hasselbacher, aren’t generic drugs that might be from a foreign country of worse quality than American drugs? Why should I take a chance, especially if my insurance pays for it?
Kudos to Kroger too.
My wife sent me to Kroger today to pick something up and it occurs to me that I should also give a plug to Kroger for their generic drug program. Drugs from their specified list cost $4 for a 30 day supply, and $10 for a 90 day supply. Kroger also provides lovastatin and pravastatin, two of the generic cholesterol-lowering drugs discussed above.
I suspect that both Walmart and Kroger lose money on these drugs. That is certainly the reason that Kroger requires you to walk into the store to pick up your drugs and thus be exposed to their other offereings. I can’t blame them for that. Somebody or some process always has to pay. If the generics are really that inexpensive to purchase wholesale, then I must ask our insurance companies, “why do you charge so much more copay for generics?” Perhaps our insurance companies want us to pay cash for as many drugs as possible to help their bottom line. Please prove me wrong so I can sleep better.
Kroger, the sign in your store seemed to advertise that “hundreds” of drugs are available in the $4 program. I have a recommendation for you. Let your pharmacist professionals guide your marketing people. The list of available drugs on your website has only 128 unique drugs to my count, and some of these are combination drugs. Many of the individual drugs are available in different dosages which seems to me to confusingly inflate the number you do advertise. For example, thyroxine is available in 10 different dosages. I didn’t count them as 10 individual drugs, and you don’t have to count them either to win my approval for your program. I encourage you to add as many different drugs as possible. I realize this will cut into your profits because you can get bigger payments and co-payments from insurance companies for generic drugs if you process the prescription through their systems. [Aside: If you really want me to beat the drum for you, put atorvastin, the generic form of Lipitor® on your $4 list! You too Walmart. I count 131 drugs on your list. How about a contest to see who will add more? ]
I am interested in why both of you have to charge more for the $4 program in some states. What is the valid reason for which a state government would “protect” its public against your good works? Are the local drug store lobbies stronger in those states? Please leave a comment below and educate us.