What Can Hepatitis B Drugs Tell Us About Generic Pricing Games?

by Leslie Small

While the average price that pharmacies pay for a common hepatitis B treatment has seen a steep drop as more generics entered the market, the list price for the drug — which helps determine patient cost sharing — has stayed stubbornly high, according to new research published in JAMA. The study’s authors say their findings “highlight the need for policies that improve transparency around generic drug financing and pharmaceutical benefit manager practices,” but one industry expert points out that there are also private-sector solutions to the problem arising. 

Affordability problems prompt study 

• According to study author Jonathan Alpern, M.D., an infectious diseases specialist with HealthPartners in Saint Paul, Minn., the impetus for examining the market forces surrounding the generic, entecavir, was simply that “patients were having trouble affording the medication.” 
• Alpern and his colleagues found that as the number of entecavir manufacturers increased from one to 11 between 2014 and 2018, the National Average Drug Acquisition Cost (NADAC) for the antiviral drug plummeted from $30.12 to $1.93 per 0.5-mg tablet. But the average wholesale price (AWP) remained constant at $44.43 during that time.  
• That artificially high AWP can have real consequences for patients, the findings of Alpern’s study suggest. For members of commercial health plans, average out-of-pocket spending per 30-day supply of generic entecavir rose from $41 in 2014 to $52 in 2018. For Baraclude, the brand-name version of entecavir, out-of-pocket spending per 30-day supply increased from $118 in 2014 to $165 in 2018.  

Consumers have other options 

• Elan Rubinstein, Pharm.D., principal of EB Rubinstein Associates, tells AIS the results of Alpern’s study reveal a stubborn problem with how drugs are priced. “Generic competition did bring down the net cost of entecavir, even while the list price remained high,” he says. “High list — even 90% higher than net — is standard generic drug industry practice.”  
• However, “the high out of pocket costs for entecavir and other generics is something that, given GoodRx and companies like it…patients can do something about themselves directly, bypassing their PBM and pharmacy benefits altogether,” according to Rubinstein. 
• However, “the awful part is that patients would need to do an end-run of their own pharmacy plan, rather than depend on their pharmacy plan to provide them with a fair price for their generic prescription,” he adds. “In my view, this is a scandal that the PBMs and retail pharmacies co-own, should be ashamed of and should be held to account for.”  

From Radar on Drug Benefits

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