Generic drug delays cost U.S. payers millions

Jun 19 2014

Problems surrounding an Indian company's launch of generic versions of three blockbuster drugs have preserved millions in revenue for the brand-name makers, reports The Wall Street Journal. Meanwhile, Swiss pharmaceutical giant Novartis projects its overhaul will boost profits, and the impact of a $1,000-a-pill drug to treat hepatitis C is examined.

The Wall Street Journal: Drug Delays Cost U.S. Health-Care Payers Millions Of Dollars
Delays to an Indian company's generic versions of three blockbuster drugs annually cost U.S. health-care payers millions of dollars-;and preserve millions of dollars in revenue for the makers of the brand-name versions. AstraZeneca's heartburn drug Nexium is the most recent big drug to face delays to its generic version. Key patents on the U.K. company's "purple pill," which ranks among the world's best-selling prescription drugs, expired at the end of May, but manufacturing problems at India's Ranbaxy Laboratories have prevented the launch of an expected generic rival (Plumridge and McLain, 6/17).

The Associated Press: 1,000-A-Pill Sovaldi Jolts U.S. Health Care System
Leading medical societies recommend the drug as a first-line treatment, and patients are clamoring for it. But insurance companies and state Medicaid programs are gagging on the price. In Oregon, officials propose to limit how many low-income patients can get Sovaldi. Yet if Sovaldi didn't exist, insurers would still be paying in the mid-to-high five figures to treat the most common kind of hepatitis C, a new pricing survey indicates. Some of the older alternatives involve more side effects, and are less likely to provide cures (6/17).

The Wall Street Journal: Novartis Business Overhaul To Lift Profitability
Swiss pharmaceutical giant Novartis on Wednesday offered details of how its sweeping business overhaul would boost its performance, saying its core operating profit margin would have been more than two percentage points higher if the changes had been implemented last year. Basel-based Novartis is in the midst of a series of transactions worth roughly $25 billion that includes the sale of its vaccines business to GlaxoSmithKline and its animal health business to Eli Lilly. Novartis is also buying Glaxo's oncology business as part of the deals (Revill, 6/18).

Meanwhile, the cost of inpatient hospital care grew faster than outpatient care -

Modern Healthcare: Inpatient Prices Rise Faster Than Outpatient Prices
U.S. consumer prices for inpatient hospital care grew faster than outpatient hospital prices last month as overall hospital prices increased 0.3%, the latest seasonally adjusted federal data show. The Consumer Price Index, a measure of inflation produced by the U.S. Bureau of Labor Statistics, tracks the changes in prices paid by commercial insurance companies. Last month's 0.3% increase for hospital prices was slower than the 0.5% price bump in April and the 0.8% price growth in March. It was faster, however, than the 0.1% in May 2013 (Evans, 6/17).