Why Some Patients Overpay for Specialty Generic Drugs

Crosson and Kesselheim discuss the pricing dynamics of generic drugs in the US pharmaceutical market, focusing on the case of imatinib, a lifesaving anticancer drug. The Hatch-Waxman Act of 1984 was intended to increase brand-name drug manufacturers' revenues by extending exclusivity periods while facilitating the approval of generic versions. However, the study by Dusetzina et al finds that the expected post-Hatch-Waxman trends in pricing for imatinib have not been realized. Despite a more competitive generic market, the price charged by pharmacies for Medicare patients remains high, resulting in significant out-of-pocket costs. They suggest that insurers may not be paying as much as it seems, and the rise in fees paid by pharmacies to insurers after the point of sale may contribute to this discrepancy. Additionally, vertical integration among insurers, pharmacy benefit managers, and specialty pharmacies may reduce pressure to lower prices. They highlight the need for reforms to address high out-of-pocket costs for patients and mentions potential solutions such as the Inflation Reduction Act of 2022 and the emergence of novel pharmacies that offer lower prices.