By Henry Ehrlich
Two weeks ago we greeted FDA approval of Teva’s competitor to EpiPen with two cheers, or maybe the sound of one hand clapping. But would it be sufficiently competitive to drive down the cost? New copycat drugs tend to be priced in the ballpark of the old, and if the price is already outrageous, it may not feel like much of a boon to the beleaguered patient.
Now, the great medical website STAT has come forward with analysis that puts my own armchair economics in the shade entitled, “Does a generic Epipen mean lower prices? Don’t hold your breath.” It was written by Jonathan D. Alpern, M.D., assistant professor of medicine at the University of Minnesota and his colleague William M. Stauffer, M.D., professor of medicine.
Among the findings: At least two manufacturers are necessary for significant cost savings, with each new entry resulting in incremental price reductions. Another study found that substantial price drops require up to three generic manufacturers. Teva is not enough competition. We need more.
STAT drew on a litany of examples. Syprine (trientine hydrochloride), a 1960s drug for treating Wilson’s disease made by Valeant, which rose from $652 in 2010 to $21,000-plus in 2015. It was pricing like this that made Valeant a stock market darling for years before it was overtaken by scandal. Teva’s task is complicated by the fact that it is a “complex generic.” I.e. the drug is a machine as well as a medicine.
The article concludes on a down note: “Meaningful generic competition, although theoretically a solution to excessive drug pricing, has yet to arrive on a scale that will substantially decrease rising drug prices, including EpiPen. Without other competitors, history tells us not to expect significant cost savings anytime soon for this much-needed medicine.”
Graphic by Smore.com