Generic-drug costs rise sharply

Associated Press

WASHINGTON

Some low-cost generic drugs that have helped restrain health care costs for decades are seeing unexpected price spikes of up to 8,000 percent, prompting a backlash from patients, pharmacists and now Washington lawmakers.

Members of the Senate Aging committee met Thursday to scrutinize the recent, unexpected trend among generic medicines, which are copies of branded drugs that have lost patent protection. They usually cost between 30 and 80 percent less than the original medicines.

Experts point to multiple, often unrelated, forces behind the price hikes, including drug ingredient shortages, industry consolidation and production slowdowns due to manufacturing problems. But lawmakers convening Thursday’s hearing, led by Vermont Senator Bernie Sanders, say the federal government needs to do more to bring down prices.

“These companies have seen the opportunity to make a whole lot of money and are seizing that opportunity,” said Sanders, who is chairman of the Senate Subcommittee on Primary Health and Aging.

Sanders is a political independent who usually votes with the liberal wing of the Democratic party.

One strategy Sanders favors: requiring makers of generic drugs to pay rebates to the federal Medicare and Medicaid drugs plan when the prices of their medications outpace inflation. Those payments are already mandatory for branded drugs but have never applied to generics.

The lower prices of generic drugs make them the first choice for both patients and insurers: Generic drugs account for roughly 85 percent of all medicines dispensed in the U.S., according to IMS Health. Typically, generic-drug prices fall as more companies begin offering competing versions of the same drug.

But recent examples suggest the market forces that have kept generic prices low are not working properly.