ANN ARBOR---Debate over substituting one drug product for another isn't new—by some accounts, it goes back at least 100 years, but it has intensified in recent years with drug companies, insurers and health care providers at odds over rising pharmaceutical costs.

Manufacturers of brand-name pharmaceuticals trying to generate profits on the drugs they invented are loathe to give over market share to cheaper generics, but insurers trying to drive costs down often push providers to prescribe and dispense generics and encourage patients to take generics through higher copays on brand-name medications.

A group of University of Michigan researchers conducted an in-depth look at the issues of brand-name medications vs. their generic equivalents, and they are publishing their findings in a seven-article series in the Journal of the American Pharmaceutical Association (http://www.aphanet.org/JAPhA/japha.html). Three of the pieces appear in the current September/October issue.

"We feel there's a lack of knowledge on the part of employers, insurers, and providers regarding generic drugs and that these changes in prescription drug benefit programs should be made based upon a better understanding of the issues," said Duane Kirking, lead investigator on the project, of the motivation for the team's research. The Blue Cross Blue Shield of Michigan Foundation provided $50,000 in funding toward the research.

Among their findings:

• In spite of changes in the marketplace and projections for massive growth, generic drugs appear to have stabilized at about 40 percent of prescriptions and 10 percent of pharmaceutical sales. Kirking said he doesn't expect that share to change substantially, because even as manufacturers bring more generics to market, brand-name manufacturers introduce more new (and often more
  effective) drugs, which enjoy patent protection before they have to face competition from generics.
  
• The science demonstrating that generics are, in fact, bioequivalent to the name brands with which they compete has improved greatly. One argument opposing generics has traditionally been that they are not a true substitute, but now it is easier to tell if that is true scientifically, Kirking said.
  
• Significant restructuring in the pharmaceutical industry has led to cases where the same company makes a brand-name drug and its generic equivalent, or owns a subsidiary that does, while those companies that make only generics are merging and consolidating.

Kirking, who is professor and chair of the Department of Social and Administrative Sciences in U-M's College of Pharmacy and a research scientist in health management and policy at the U-M School of Public Health, said many people in the health care industries looked to generics as a quick-fix way to cut costs. For a number of reasons, that is not realistic, he said. For example, a number of the most expensive medications are still under patent so no generics exist, and once the end of the patent draws near, clever pharmaceutical manufacturers reformulate—such as providing a 12-hour pill instead of one that works for four hours—and get a patent on the new and improved drug.

Kirking said therapeutic interchange might prove to play a bigger role in balancing the desire to reduce costs with the need to provide effective medication. Therapeutic interchange involves moving a patient from one drug to a different but related drug, as opposed to its chemical twin generic. This can be helpful both because very similar drugs sometimes have very different prices, as well as because one drug might not have a generic equivalent, but a related drug might. That could lead to first moving the patient from one brand-name medication to another, then to the generic equivalent of the second. However, the issues surrounding changing the actual drug entity are even more complex than a generic switch.

While drug advertising aimed directly at consumers has developed name recognition among patients, often they can be won over to generics fairly easily if there is a financial incentive, Kirking said. They might ask for the brand-name drug but they will switch to the generic if they find the brand-name version will cost them more out of pocket.

If the switch to generics is part of a program implemented by a pharmacy benefits manager, these conversations can happen quickly. Kirking said that when well-known anti-depressant Prozac went off patent in early August, movement to the use of the generic product occurred even faster than the typical
generic penetration rate of about 75 percent in six months.

The Journal of the American Pharmaceutical Association published U-M articles in July/August on the historical issues of generics and on the economic and structural trends in the generic market. This issue has articles about the issues and concerns of patients, physicians and pharmacists. The series will conclude with articles in the November/December publication about the scientific and regulatory environment of generic pharmaceuticals and the legal issues of whether pharmacists should dispense generics.

Also involved in the project are Frank Ascione, professor of social and administrative sciences and associate dean for academic affairs; Caroline Gaither, associate professor, social and administrative sciences; and Lynda Welage, associate professor, clinical sciences, all at the U-M College of
Pharmacy. In addition, Welage serves as a clinical pharmacist for U-M's University Hospitals, and Ascione holds an appointment as a faculty associate at the U-M Institute of Gerontology.

For more information on U-M's College of Pharmacy, now celebrating its 125th anniversary, visit http://www.umich.edu/~pharmacy/.

© 2002 The Regents of the University of Michigan
Updated August 21, 2002