The Winnipeg Free Press wrote a very interesting article on the expiring of Drug patents. We have summarized and highlighted for you the contents of the article below.
The cost of prescription medicines used by millions of people every day is about to plummet. The next 14 months will bring generic versions of seven of the world’s 20 bestselling drugs, including the top two: cholesterol fighter Lipitor and blood thinner Plavix. The magnitude of this wave of expiring drugs patents is unprecedented. Between now and 2016, blockbusters with about $255 billion in global annual sales will go off patent, notes EvaluatePharma Ltd., a London research firm. Generic competition will decimate sales of the brand-name drugs and slash the cost to patients and companies that provide health benefits.
Top drugs getting generic competition by September 2012 are taken by millions every day: Lipitor alone is taken by about 4.3 million Americans and Plavix by 1.4 million. Generic versions of big-selling drugs for blood pressure, asthma, diabetes, depression, high triglycerides, HIV and bipolar disorder also are coming by then. The flood of generics will continue for the next decade or so, as about 120 brand-name prescription drugs lose market exclusivity.
The impact of the coming wave of generics will be widespread — and swift. Insurers use systems that make sure patients are switched to a generic the first day it’s available. Many health plans require newly diagnosed patients to start on generic medicines. And unless the doctor writes “brand only” on a prescription, if there’s a generic available, that’s almost always what the pharmacist dispenses.
While there is great likelihood that some drug costs are decreasing due to these patents expiring, the adjustment is only reducing the anticipated trend level. Basically, overall drug costs will likely increase, but not as much as the last few years.
Great West Life has reduced their trend factor from about 16% to about 12.5% for upcoming renewals. Other carriers will likely follow suit. We will continue to monitor these changes and keep you informed.
