Federal investigators will look into generic drug price hikes

Increases raise concern about patient access, pharmacy operations

Mimicking a trend that’s been going on in recent years with brand-name drugs, reports have now surfaced that costs for most generic medications are also going up, prompting federal investigators to look into the issue.

At the urging of Sen. Bernie Sanders (I-VT) and Rep. Elijiah Cummings (D-MD), the Office of the Inspector General (OIG) of the U.S. Department of Health & Human Services (HHS) said it will conduct an investigation of generic drug price increases on the Medicaid drug rebate program.

“It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs,” Sanders said in a prepared statement. “Generic drugs were meant to help make medications affordable for millions of Americans who rely on prescriptions to manage their health needs. We’ve got to get to the bottom of these enormous price increases.”

A recent analysis from CMS found that 10% of generic drugs more than doubled in price from 2013–14 and that one-half of all generic drugs went up in price that same year.

APhA has repeatedly indicated concern about the impact of generic price increases on patient access and pharmacy operations to federal legislators and agency officials, and said it is pleased that HHS is undertaking additional study of the problem.

In a letter that HHS OIG sent to Sanders and Cummings on April 13, the agency said it will review the pricing of generic drugs from 2005–14 to determine the extent to which quarterly average manufacturer prices increased faster than inflation.

Last November, the senators held congressional hearings to examine generics pricing and asked generic drug manufacturers to submit pricing data, which they declined to do, noting Congress did not have the authority to request that information. HHS OIG, however, does have the authority since federal law requires drug manufacturers to provide pricing data to HHS.

The lawmakers have also introduced twin bills in the House and Senate that they said will help ease the burden on patients when drug prices increase. Just like brand-name drug companies pay a rebate to Medicaid, the bill would also require generic drug manufacturers to pay additional rebates to state Medicaid programs for any medicine that increases in price faster than the inflation rate. The lawmakers said the Congressional Budget Office found this could save Americans $500 million over 10 years.