Generic HIV Drugs Will Be a Good Thing, Right?

By David Evans and Anne Donnelly

From Project Inform

 

October 25, 2016

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In 2017, the patents for two antiretroviral drugs for HIV that continue to be widely used will likely expire in the United States and generic alternatives at lower market prices could be introduced. Some have long awaited this occurrence, hoping for increased competition and a drive to lower prices for all HIV medications. However, it is an open question whether generic competition, at least in the short term, will actually materialize or if it does, lead to reduced prices. If savings are realized, there is also no guarantee they will be funneled back into other critical HIV services. To explore the possibilities of wider generic availability in the United States, Project Inform co-hosted a meeting with the National Association of State and Territorial AIDS Directors (NASTAD) and the Treatment Action Group (TAG) in Washington, D.C. on September 29 and 30, 2016.

The two drugs going off patent soon are efavirenz -- marketed as Sustiva -- and tenofovir disoproxil fumarate (TDF) -- marketed as Viread. Both efavirenz and TDF are available in combination with other antiretroviral drugs as single tablet regimens (STRs), and some of the other drugs contained in those STRs will not be going off patent. This could have significant consequences, such as the need to break up prescribed regimens into multiple pills with multiple insurance copayments.

Co-sponsors invited a diverse set of stakeholders, including providers, activists, policy makers, health economists and generic manufacturers to the meeting to ensure a broad and lively discussion. The primary segments of the discussion were:

• an analysis of current drug costs across multiple payers (e.g. private insurance, Medicaid, the VA, etc.);
• the potential (if any) to redirect any savings to other HIV services; and,
• what the positive, neutral or negative outcomes might be for people living with HIV and front-line providers when generic HIV drugs become available.

As became clear through early discussions, the drug purchasing systems in the United States are incredibly convoluted, vary significantly by payer source, and are fairly opaque to those seeking to understand or reform purchasing systems.. Appearances can be deceiving. The price actually paid by private and public payers is almost never publicly available as negotiations are protected by privacy agreements. Because of certain purchasing mechanisms , public programs such as Medicaid or public health clinics or hospitals may be paying very little and generating program income on some older brand drugs before they go off patent. This income could significantly decrease with the introduction of generics, depending on a number of factors, including how the generics were priced and whether or not supplemental rebates were negotiated.

Examination of the generic market and payer purchasing systems raised real questions about how much money could actually be saved within a system on generic versions of HIV drugs, certainly in the near future. It is unclear where savings might be possible and how much savings would be generated by the entry of generic HIV drugs into various health care settings. Generic manufacturers and some academic studies have previously stated that significant savings could be generated but a closer examination of generic competition and health care systems made it clear that more analysis is necessary. This is not to say that generic competition is inherently bad or unuseful as a bargaining chip to lower health care costs, but that the system is so complex and everchanging that it will take considerable effort to unravel the potential outcomes of different possible scenarios.

In most cases, there are no mechanisms for savings on drug costs within most health systems to accrue back to other HIV services. Some experimental comprehensive care programs in one state are being attempted, but there is no guarantee that such programs will continue or be could be adopted in other states.

Finally, there is the fear among some advocates and providers that more aggressive cost containment measures, such as the need for a provider to get prior authorization from an insurer in order to prescribe brand name or single tablet regimens drugs, could result in some people with HIV having to take less tolerable or simple regimens and an increase in the time spent by providers and their staff dealing with the ever-changing rules and policies put in place by payers.

Though the participants agreed that the hopes once expressed about the potential for generics to usher in lower drug prices for all HIV medications in the United States are perhaps not grounded in our current reality, the activists and providers who gathered on the second day were determined to identify actions that could be taken now to ensure that benefits might be achieved. In addition, it was decided to further explore what protections might be necessary for patients and their providers to ensure access to standard of care HIV treatment in all health care systems with the entry of generic HIV drugs.

These actions have been prioritized and are being refined by the co-sponsors. They will be outlined in in more detail in recommendations put forward by the co-sponsors and we will work on implementation of some of the prioritized suggestions, which include a modelling project that would help to better understand potential cost savings and/or program income loss with the entry of generic HIV drugs. Project Inform will provide updates on these important efforts as they become available.


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