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Join us at 11 a.m. CT (12 p.m. ET/9 a.m. PT) on Thursday, June 9, for a live hour-long chat about generic drugs, and how patients and consumers will soon benefit from huge savings from key brand name drugs losing patent protection. The chat will be moderated by Chicago Tribune health care reporter Bruce Japsen and feature panelist Michael Kleinrock.

The topic of generic drugs is on the verge of taking on perhaps its greatest importance in decades as blockbuster drugs like the cholesterol pill Lipitor, the anti-clotting drug Plavix and the diabetes pill Actos lose patent protection and become available in cheaper generic copies. In the next two years, six of the nation’s top 10 best-selling drugs will lose patent protection and are expected to be available in generic form. Many of these drugs are important to the daily lives of U.S. consumers and patients around the world when they were launched in the 1990s--in a golden age for the pharmaceutical industry that saw breakthrough treatments come on the scene for the nation's most chronic conditions such as diabetes, high cholesterol and high blood pressure.

Chat topics addressed will include information on when these generics will become available and what illnesses they treat. Other topics will include how much consumers can expect to save on their health insurance co-payments as well as out of-pocket costs for those without medical coverage.

Hospital sales and buyouts are changing the face of medical care in communities across the country with mergers escalating to levels not seen in more than a decade. Hospitals say the deals are needed to create economies of scale so they can focus their spending on investing in new buildings, the latest medical technology and electronic health records to improve patient care and customer service. But some employers and health insurers worry the days of hospital care being dominated by larger players will lead to monopolies and potential price increases for consumers.

Michael Kleinrock is the director of research development for IMS Institute for Healthcare Informatics, a global health market research firm that works in the public and private sector. He is an expert at providing objective, relevant research that addresses today's health care issues in ways that can improve patient care.

If you are unable to make the chat and would like to send your question in advance, e-mail Bruce Japsen at bjapsen@tribune.com.

Big savings on generic drugs

(06/09/2011)

  

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10:47

[Be Right Back Countdown]

10 minutes  Thursday June 9, 2011 10:47

10:58

Bruce Japsen:  Welcome to today's chat on generic drugs. Joining us today is Michael Kleinrock of IMS Institute for Healthcare Informatics and we are talking about the coming flood of generic drugs that will soon be hitting the market for U.S. consumers. I'm Bruce Japsen, the health care reporter at the Chicago Tribune, your host for today's chat. Michael, could you please give us an idea of just how large this impact will be to the drug industry and U.S. consumers. Thursday June 9, 2011 10:58 Bruce Japsen

10:59

Michael Kleinrock:  Over the next five years, the largest ever group of products will face generic competition, that’s $102Bn of current drug sales over the next five years. Typically patients switch to generics very quickly and generic prices are typically 90% cheaper than the brand. This represents an unprecedented level of savings for American consumers. Thursday June 9, 2011 10:59 Michael Kleinrock

11:04

[Comment From MiriamMiriam: ]  It is my understanding that after a generic version of a brand drug has been out for six months, and more makers of the generic drug enter the market, the cost for that generic drug will drop due to increased competition. I am taking a drug that has been in generic form for about two years and there is now more than one maker of the generic, but the cost of the drug has increased by more than one-third in just one-quarter since last year. Why is that? Thanks. Thursday June 9, 2011 11:04 Miriam

11:07

Michael Kleinrock:  Firstly, multiple generics can enter the market immediately, except in a specific case where the first generic company won a legal challenge to the patent. That's a provision of the 1984 Hatch-Waxman law that encourages generic companies to challenge patents and launch generics sooner. To the second point, pricing of all products, brands and generics is not regulated in the US market, so the companies involved have every option to change price and sometimes this does happen. Thursday June 9, 2011 11:07 Michael Kleinrock

11:09

Bruce Japsen:  So in the case if Lipitor losing its patent protection at the end of November, people who pay out of pocket will start to get a discount in December but that will then drop significantly more by later in 2012 and beyond as more generic competitors start producing the product. Thursday June 9, 2011 11:09 Bruce Japsen

11:11

Michael Kleinrock:  In the case of Lipitor, we'd absolutely expect some savings for patients as soon as generics are available, though there is expected to be a limited number of generic-makers for this product early due to Hatch-Waxman exclusivity. Later in 2012 and beyond we would expect costs for Liptior to come down significantly. Thursday June 9, 2011 11:11 Michael Kleinrock

11:13

[Comment From RobRob: ]  with the increase in generics coming to the market, would you expect the overall cost to go down? The reports from the drug companies speak to overall drug cost. Thursday June 9, 2011 11:13 Rob

11:14

Michael Kleinrock:  Absolutely, overall drug costs will go down, although demand continues to increase. We'd expect overall drug spending to increase at around 0-3% over the next five years, which is the lowest ever period of spending growth. Thursday June 9, 2011 11:14 Michael Kleinrock

11:15

[Comment From Tina PoiteventTina Poitevent: ]  I see that Actos will be generic soon but, someone close to me also takes Cymbalta, any ideas as to when it is going to be available in generic form? Thursday June 9, 2011 11:15 Tina Poitevent

11:16

Michael Kleinrock:  Actos in August 2012 and Cymbalta not until July 2014. Thursday June 9, 2011 11:16 Michael Kleinrock

11:16

[Comment From Mort JorgensenMort Jorgensen: ]  Do you know of any effective strategies that employer groups utilize/implement to educate members on generic drug alternatives? Thursday June 9, 2011 11:16 Mort Jorgensen

11:18

Bruce Japsen:  Employers are starting to do more and more to educate consumers. They are providing brochures, holding seminars and in an increasing number of cases, even eliminating co-payments so generics are essentially given to employees at no-cost. They view this as a way to improve compliance and keep their workers healthy and out of the more expensive hospital setting. Generics should save money across the health care system Thursday June 9, 2011 11:18 Bruce Japsen

11:19

Michael Kleinrock:  Absolutely true Bruce. We're even seeing cases where lower or zero co-pays result in untreated patients seeking care. Costs are a key driver of non-treatment, so this period of patent expiries will have a greater impact on health generally than just the costs for individuals, though that part is key, particularly in the current economy. Thursday June 9, 2011 11:19 Michael Kleinrock

11:21

[Comment From Mort JorgensenMort Jorgensen: ]  Given the loss of brand drug revenue, how do you expect pharmaceutical companies to react and how will that reaction change their physician marketing strategies? Thursday June 9, 2011 11:21 Mort Jorgensen

11:23

Michael Kleinrock:  Pharmaceutical companies have been preparing for this for some time. They've already made significant cuts to numbers of sales reps, mostly when they have patent expiries without new products to be discussed with doctors, and we'd expect this to continue. Thursday June 9, 2011 11:23 Michael Kleinrock

11:25

Bruce Japsen:  Michael, what are some of the key brand name drugs that are facing patent expirations in the coming years? Thursday June 9, 2011 11:25 Bruce Japsen

11:25

Michael Kleinrock:  Six of the top 10 drugs will face generic competition this year and next. That¿s $25Bn in 2010 spending on those six drugs and about 14.5mn Americans taking those medicines which include Lipitor, Plavix, Nexium, Advair Diskus, Actos, Seroquel. Thursday June 9, 2011 11:25 Michael Kleinrock

11:27

[Comment From Mort JorgensenMort Jorgensen: ]  Public PBMs have been very aggressively communicating to shareholders the superior margins of generic drugs and the positive impact that will have on their EPS - how long do you think margins on relatively inexpensive generics can stay superior? Thursday June 9, 2011 11:27 Mort Jorgensen

11:29

Michael Kleinrock:  An interesting feature of the market is that even though patients save significantly, generics are a key margin and profit driver for Pharmacy Benefit Management companies, wholesalers and drugstores. The win-win is an important part of the system for sure. There is both a bubble in new generics that lasts through 2013 for PBMs, but for the foreseeable future there will be a high level of generic usage, and that will support these businesses for some time to come. Thursday June 9, 2011 11:29 Michael Kleinrock

11:30

[Comment From RobRob: ]  With these new drugs coming to market primarily focused on chronic conditions, do you see the utilization of mail order pharmacies increasing or decreasing? Thursday June 9, 2011 11:30 Rob

11:33

Michael Kleinrock:  Rob, that's an interesting question. Mail order pharmacies are both a key mechanism to control costs for PBMs, and offer patients lower costs. There are pressures to increase mail order usage and there are competing factors that see patients going to drugstores. Cost versus convenience appears to be the conflict, and it's unlikely that we'll see dramatic shifts to more mail order over the next few years. Thursday June 9, 2011 11:33 Michael Kleinrock

11:37

< Thursday June 9, 2011 11:37

11:41

Bruce Japsen:  Mort. Though mail order pharmacies continue to report increased usage in mail order, the corner drugstores have made moves to be more competitive such as Wal-Mart selling generics $4 a month. Walgreens, CVS and all retailers are offering unprecedented discounts for generics. Thursday June 9, 2011 11:41 Bruce Japsen

11:44

Bruce Japsen:  Michael, since I wrote a rather lengthy story on generics a few weeks back, I have had many e-mails about a popular and expensive drug's patent expiration. That is the popular blue-diamond shaped pill Viagra. When does the patent for Viagra expire. Thursday June 9, 2011 11:44 Bruce Japsen

11:46

Michael Kleinrock:  Viagra's patent is expected to expire in March 2012, along with those for Seroquel, Lexapro, Geodon, Boniva and several others. Thursday June 9, 2011 11:46 Michael Kleinrock

11:49

Bruce Japsen:  Michael, our poll is showing an overwhelming majority of our live viewers are looking forward to the introduction of a generic drug. How does that compare with your research at IMS? Thursday June 9, 2011 11:49 Bruce Japsen

11:51

Michael Kleinrock:  We see a dramatic story here. When a generic is available for their drug, patients get their prescription as a generic 93% of the time, which has risen steadily over the last decade. There are a number of drugs where doctors prefer not to substitute a generic, but for the most part, we see nearly complete switchover to generics, often within six months of the patent expiry. Thursday June 9, 2011 11:51 Michael Kleinrock

11:53

Bruce Japsen:  Given the huge amount of brand name sales that will be threatened by patent expirations and generic drug launches, do you think that overall health care costs will slow or perhaps even fall in the next two to three years. After all, there is $300 billion or more spent on drugs in the U.S. Thursday June 9, 2011 11:53 Bruce Japsen

11:56

Michael Kleinrock:  Actually there are a number of factors that will see the market continue to grow. There are still drugs that are relatively new to the market that are growing and gaining broader usage. Overall while branded drugs will see declines due to these generic effects, demand continues to grow for medicines, partly due to population and demographic issues such as the baby boom, and through newer drugs. This will still mean historically low rates of growth of around 0-3% over the next five years. Thursday June 9, 2011 11:56 Michael Kleinrock

11:58

Bruce Japsen:  Thanks to Michael Kleinrock of IMS Institute for Healthcare Informatics for joining us today for our health chat about generic drugs. Please join us at noon on Tuesday, June 21, for our next Chicago health chat when Tribune reporter Judith Graham hosts a discussion on Alzheimer's disease. Hope to see you then. Thursday June 9, 2011 11:58 Bruce Japsen

11:59