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of drug companies note this post is really just about the us the situation is different in other countries which often have robust price controls asthma and asthma treatment asthma is an inflammatory disease in which the patient s airways constrict often in response to some trigger such as exercise allergy or illness leading to difficulty breathing there are two front line treatments for asthma β 2 agonists such as albuterol salbutamol that induce the muscles of the airway to relax corticosteroids such as fluticasone that reduce inflammation in the airways these treatments work together in that some β 2 agonists are quick acting and therefore can treat an asthma attack immediately whereas the corticosteroids reduce your susceptibility to asthma attacks but are not useful to deal with one already in progress it s quite common for a patient to be on both classes of drugs taking the corticosteroid daily and then a β 2 agonist as needed for instance before exercise or when they feel that they are having trouble breathing these drugs can be delivered systemically but are most commonly inhaled so that they are delivered directly to the affected tissues there are at least three major inhalation routes but historically the most common is via what s called a metered dose inhaler mdi puffer which is basically a specialized kind of spray can that lets you spray the drug right into your lungs these drugs are all quite old the most common β 2 agonist albuterol in the us salbutamol elsewhere was patented in 1966 the first inhaled corticosteroid beclomethasone was patented in 1976 and the most common inhaled corticosteroid fluticasone propionate was patented in 1980 so the basic drug is long out of patent unfortunately this is not the end of the story drug naming when a drug is developed it typically gets assigned at least two names an international nonproprietary name which just describes the compound e g fluticasone inns are assigned by the world health organization according to a fairly complicated system in which each class of drug has a stem prefix or suffix that helps tell you what it is for instance glucagon like peptide glp analogues all end in glutide a brand name which is assigned by the manufacturer e g flovent and is designed to sound appealing when the drug is initially marketed it will of course use the brand name but then generics will typically use the inn name though the drug may also still be sold under the brand name for instance you can still buy advil even though generic ibuprofen is widely available some mostly older drugs will also have names in some older national naming system for example the β 2 agonist salbutamol is known as albuterol in the us another example is the drug brand named tylenol and called acetaminophen in the us paracetamol outside the us and name brand and generics the first thing you have to understand is the lifecycle of a drug when a new drug is first invented the manufacturer will generally file for a patent as a result once the drug is approved the manufacturer will have some period of exclusivity during which only they can sell the drug developing drugs is incredibly expensive as is the process of testing the drug to determine that it is safe and effective this system allows the initial inventor to charge monopoly prices during the lifetime of the patent typically far in excess of the cost of manufacture thus recouping much of the upfront cost of developing the drug 1 eventually the patent on the drug will expire allowing other manufacturers to make the drug themselves in what s called a generic drug the one made by the manufacturer is called the name brand drug importantly the fda allows those other manufacturers to get approval to market the drug without repeating all the studies that the original inventor did instead they just have to go through what s called an abbreviated new drug application anda in which they demonstrate that the drug is bioequivalent roughly that it delivers the same active ingredient at the same rate and dosage as the original drug this isn t to say that the formulation is exactly the same for instance a generic tablet might have different coatings or binders but it s obviously a lot easier to show bioequivalence than the original safety and efficacy trial once the generic is approved it competes with the name brand drug with the effect of driving the price down towards the marginal cost of production for obvious reasons insurers tend to favor generic drugs and there are even state laws that allow or even require pharmacists to substitute generics for name brand drugs unless the prescriber explicitly states not to thus hopefully reducing the risk that the prescriber will write the name brand by habit even when a generic exists a very short primer on the us pharma supply chain to understand what is happening here it helps to have some understanding of the pharma supply chain the figure below from a report by sood et al provides a high level overview the pharma supply chain source sood et al conceptually drugs are distributed through a multi tier supply chain from manufacturer to wholesaler to pharmacy retail and then ultimately to the user much like other products e g soda however unlike soda there is a whole parallel financial structure because the end customers the patients do not usually pay for the drugs directly at least not completely instead they will have some insurance plan which pays for much of the drugs often requiring the patient to pay some kind of copay which covers the remainder of the cost the price the patient pays is set by the insurer in part as a function of the arrangements discussed below and is often independent of the pharmacy the patient has the prescription filled at so it s not like shopping for other products in some cases insurers will have preferred pharmacies and offer patients discounts to use those pharmacies but as a general matter pharmacies don t compete directly on price delivered to customers conversely two patients may pay very different prices for the same drug at the same pharmacy instead of paying the price of the drug directly patients will typically be asked to pay a fixed copay which is determined based on a tiered system for instance here are the co payments for one of the blue cross blue shield plans offered to federal employees tier copay generic 5 preferred brand name 35 non preferred brand name 50 of the plan allowance for each purchase of up to a 90 day supply preferred specialty 60 at the center of this parallel structure is what s called a pharmacy benefit manager pbm as suggested by the name a pbm is a company which manages the prescription program for the insurance company their customer and negotiates with the manufacturer and the pharmacy around pricing and exclusivity one key tool that the pbms use is a formulary which is the list of drugs that are preferred for a given health plan generally the health plan will try to induce the patient to select drugs which are on the formulary for instance by offering them a lower copay requiring the patient to try some formulary drug before approving a non formulary drug or refusing non formulary drugs altogether it s obviously advantageous to the manufacturer to be on the formulary especially if the competition is not and so this is an opportunity for price negotiation many of these actual price adjustments happen via rebates recall that the pharmacy buys their drugs from wholesalers and at that point it s not clear which patient will be getting a given unit however the actual price that the patient should be paying and that should be charged to the health plan will vary on a patient by patient basis rebates paid by the manufacturer to the pbm and then distributed along the supply chain provide differentiated per customer pricing while allowing the wholesaler and pharmacy to pay fixed prices obviously this whole structure gives the patient the incentive to choose drugs on the lower tier but that doesn t mean that their incentives are aligned with those of the health plan and the pbm for example consider what happens if the brand name drug is 80 and the generic is 30 but the manufacturer offers the pbm and health plan a rebate to steer the patient towards the brand name drug the patient can be exposed to a higher co pay even though the health plan is actually paying less this is covered in the ftc s report on pbms in addition our review of a number of contracts and internal documents summarizing such contracts reveals that some rebate contracts explicitly premise high rebates on the exclusion of ab rated generics these generic exclusions can be accomplished through ndc blocks of generic equivalents that is a contractual prohibition on payments for generic drugs as identified by their national drug code or ndc number these findings are consistent with public comments that identify the practice of pbms preferring higher point of sale price branded products over generics which may raise out of pocket costs for patients in brand drug manufacturer pbm rebate contracts the price of the branded drug to the payer may in some cases be lower than that of the excluded generic product net of rebates but in other cases the excluded generic may be a lower net price to the payer regardless of whether branded products are less expensive than a generic version net of rebates agreements that exclude generics and biosimilars raise numerous concerns the bottom line here is that the health plans and pbms are not necessarily incentivized to select drugs which lower the patient s ultimate cost asthma inhaler pricing the table below thanks gemini shows the pricing at goodrx for albuterol and a number of the most common inhaled corticosteroids prices vary a lot but this is reasonably reflective of what you would pay without insurance though i ve seen albuterol as low as 18 at amazon these prices are for a single inhaler which is something like 1 4 months supply depending on how high a dose you are on and how often you use it note that albuterol and fluticasone are both generic whereas the other drugs are still brand name medication class standard goodrx price link albuterol sulfate hfa generic 18g β 2 agonist 41 27 goodrx fluticasone propionate hfa generic 110mcg inhaled corticosteroid 181 14 goodrx mometasone asmanex hfa 100mcg inhaled corticosteroid 114 92 goodrx ciclesonide alvesco hfa 80mcg inhaled corticosteroid 281 32 goodrx beclomethasone qvar redihaler 40mcg 80mcg inhaled corticosteroid 311 20 goodrx the question you should be asking at this point is why is this stuff so expensive this is a particularly good question for fluticasone because of the following facts it s generic fluticasone nasal spray is available over the counter and is dirt cheap 5 for bottle with 120 sprays at about half the dose of the fluticasone inhaler so if fluticasone is out of patent why is it so expensive it s a long story so buckle up cfc vs hfa inhalers as i said above asthma inhalers are basically fancy spray cans and like other spray cans they work by having an active ingredient in this case the medication suspended in a propellant under pressure when you actuate the valve the propellant sprays out carrying the active ingredient with it out of the can and into your lungs when these inhalers were first designed they were designed with propellants based on chlorofluorocarbons cfcs 2 which are a widely used class of chemicals that as the name suggests have chlorine and fluorine bonded to carbon cfcs are largely non toxic non flammable fluorine bonds are very strong and have a convenient boiling point so they were used for a lot of purposes including famously as a refrigerant in air conditioners and refrigerators unfortunately it turns out cfcs are actually really bad for the ozone layer you don t need to care about the chemistry but the bottom line is that cfcs make their way up into the upper atmosphere where they react with ozone this is bad news because ozone absorbs ultraviolet light with the result that more uv light gets to the ground with negative results on various biological organisms including you at least if you don t like having sunburn and skin cancer the situation was especially bad over the antarctic where there has been some really clear ozone depletion ozone depletion over the antarctic source nasa this was obviously bad and in 1989 the montreal protocol restricted the use of ozone depleting chemicals for a while metered dose inhalers were exempted from these restrictions but eventually those were restricted as well with the us restricting the use for albuterol in 1998 and other inhalers between 2004 and 2013 these restrictions were made possible by the development of inhalers that used new propellants based on hydrofluoroalkanes hfas once these inhalers were developed it was considered safe to phase out cfc based inhalers evergreening hfa based inhalers were good news for the ozone layer but bad for consumers because the manufacturers of those inhalers patented the new formulations which meant that they were once again able to charge name brand prices because albuterol was already out of patent and generics were widely available this meant that albuterol prices went up that s because the new mdis use a new propellant hydrofluoroalkane or hfa the familiar propellant chlorofluorocarbon cfc could be out of production by the end of 2005 because of environmental concerns the problem is that replacement inhalers powered by hfa cost more in mid july drugstore com listed generic 17 gm albuterol mdis for 14 a similar proventil schering plough mdi listed for 38 and proventil hfa for 40 prices for ventolin glaxosmithkline mdis were similar a 2015 paper by jena et al looked at the real world cost paid by consumers finding that results the mean out of pocket albuterol cost rose from 13 60 95 ci 13 40 13 70 per prescription in 2004 to 25 00 95 ci 24 80 25 20 immediately after the 2008 ban by the end of 2010 costs had lowered to 21 00 95 ci 20 80 21 20 per prescription overall albuterol inhaler use steadily declined from 2004 to 2010 steep declines in use of generic cfc inhalers occurred after the fourth quarter of 2006 and were almost fully offset by increases in use of hydrofluoroalkane inhalers by contrast because fluticasone was invented later and so the patent expired later there wasn t ever a generic version of fluticasone and glaxosmithkline gsk was still selling the brand name version flovent in due course gsk rolled out flovent hfa which was approved in 2004 naturally gsk obtained patents on flovent hfa and the final patent expired in february of 2026 hilariously this patent isn t even for the drug itself instead it s for the dose counter in the inhaler mechanism unfortunately the fda s position appears to be that if the original drug has a dose counter the generic has to as well so you couldn t just get rid of the dose counter and sell a generic discounts rebates and authorized generic...
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title="Educated Guesswork"
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name="twitter:card" content="summary"
name="twitter:creator" content="@ekr____"
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property="og:title" content="Educated Guesswork"

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