‘Abuse of the system’: Health economist on the rising costs of combination drugs

Drugmakers for years have developed combination drugs, medications that combine two or more drugs into a single pill, in an effort to improve convenience for patients. However, the prices of these combination drugs usually cost more than the sum of their generic active ingredients, according to NBC News. 

One example is the generic acid reflux drug Zegerid, manufactured by Dr. Reddy’s Laboratory. Zegerid’s list price is $14,213 for a 90-day supply, significantly higher than the sum of the prices of its main active ingredients: omeprazole and sodium bicarbonate. With a coupon, the two main ingredients would cost just $34 for a 3-month period.

“We’re not talking about transformative new therapies,” Chana Sacks, MD, an internist and medical researcher at Boston-based Massachusetts General Hospital, told NBC when asked about combination drugs. “We’re talking about very small tweaks to medicines that we have been using for these very reasons for years.”

Dr. Sacks authored a study on combination drugs in 2018 in which she found that brand-name combination drugs cost Medicare $925 million more in 2016 than their generic components.

In addition, drugmakers have continued to increase the prices on these reformulated combination treatments.

Vimovo, a combination painkiller manufactured by Horizon, has increased by more than 1,600 percent since 2013, according to NBC News. 

Horizon purchased Vimovo from AstraZeneca in 2013. Its list price was $114 for a two-month supply. Within weeks, the list price was raised to $799, and nine price hikes later, the painkiller costs $2,482 for a two-month supply.

The price hikes have largely gone unnoticed by patients because drugmakers offer financial assistance programs to them, or patients only pay attention to their copay amounts, according to the report.

“It’s an abuse of the system,” Devon Herrick, a health economist who examined drugmakers who reformulate over-the-counter drugs into expensive combination drugs. “Their business model essentially involves gouging insurers and health plans, which ultimately costs consumers,” he wrote in an analysis.

Mr. Herrick sees the financial assistance programs as a way to work around pharmacies that might suggest less expensive options to patients.

“If a drug company has to go around the local pharmacy and sign up independent pharmacies, it’s a case of gaming the healthcare system,” Mr. Herrick told NBC. “They try to circumvent the local pharmacy from saying ‘that’s over the counter.'”

Horizon told NBC News that it works to offer patients low copays for its drugs through various programs, including HorizonCares. It works with specific pharmacies to dispense combination drugs and reduce patients’ out-of-pocket costs to as little as $10.

“Part of our commercial strategy to increase adoption and access to our medicines in the face of these incentives to use generic alternatives is to offer physicians the opportunity to have patients fill prescriptions through independent pharmacies participating in our HorizonCares patient access program, including shipment of prescriptions to patients,” a 2019 quarterly filing from Horizon reads.

https://www.beckershospitalreview.com/pharmacy/its-an-abuse-of-the-system-health-economist-on-the-rising-costs-of-combination-drugs.html