AAM: Seniors denied access to new, lower-priced generics

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AAM: Seniors denied access to new, lower-priced generics

By Sandra Levy - 09/23/2019

An AAM analysis shows that patients wait up to three years for first generic competitors to costly brands.

The Association for Accessible Medicines released a white paper titled, “Access Denied: Why New Generics Are Not Reaching America’s Seniors.” It highlights striking new data on the treatment of generic medicines in Medicare Part D, resulting in beneficiaries paying more for their medicines even when lower-priced Food and Drug Administration approved generics and biosimilars are available.

AAM finds “first generics” – medicines approved by the FDA as the first competitor to the brand – face increasing challenges to patient adoption, as fewer than 50% of Medicare Part D plan formularies automatically include these lower-priced options immediately after launch and for as long as three years afterward.

“New, discounted generics are a critical public health priority, but when they are delayed onto the Part D plan formularies, America’s seniors pay more out -of-pocket for their prescription drugs. It doesn’t add up,” Christine Simmon, the AAM senior vice president for policy and executive director of its Biosimilars Council, said.

In addition to depriving patients access to more affordable medicines, this practice threatens the long-term sustainability of the generic and biosimilars industry, responsible for delivering $293 billion in savings for the U.S. health care system in 2018 alone despite experiencing ongoing price deflation for 36 of the past 38 months.

“We urge the administration to use its existing authority to require automatic coverage of first generics onto generic tiers, and create a dedicated specialty generics/biosimilars tier, saving the health care system billions annually and ensuring seniors get the full value of generic and biosimilar medicines,” Simmon said. 

Additional Whitepaper findings include:

  • First generics are covered on formulary approximately 10% to 25% of the time in the first year of launch, 25% to 35% in the second year after launch and 55% to 65% in the third year after launch.

  • By the second year after launch, first generic net prices declined by 45% on average, yet plan coverage only improved by 9%-13%. Plans are not proportionally responding to generic price decreases well after the first year of being on the market.

  • Even three years after launch, formularies exclude coverage of first generics approximately 40% of the time.

  • When covered, first generics are placed on brand tiers more than 50% of the time, putting them on the same or similar tier as their higher-priced brand counterparts. This means patients pay the same or more for a generic than for the higher priced brand drug.

“The FDA prioritizes review of first generics and has been approving generic drug applications at a record-setting pace, yet these Medicare Part D design structural flaws mean seniors and taxpayers continue to pay for high priced brand drugs,” Simmon said. “First generics are a bellwether for savings and future generic competition, and policymakers must act now to ensure America’s patients have both.

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