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1154     SECTION X  Special Topics


                 through mandatory reporting by drug manufacturers and vol-  “specialty drugs” represent one third of the drug spending in the
                 untary reporting by health care practitioners. Practitioners may   USA.
                 submit reports on any suspected adverse drug (or medical device)   Because the US Congress currently prohibits price negotiations
                 effect using a simple form obtainable from http://www.fda.gov/  by the largest purchaser of drugs (Medicare), the public has no
                 medwatch/index.html. The FDA is expected to use these data to   protection from excessive pricing by manufacturers. Currently,
                 establish an adverse effect rate. It is not clear that the FDA has suf-  only the Veteran’s Administration and the largest private pharmacy
                 ficient resources at present to carry out this mandate, but they are   benefits manager (PBM) agencies are able to negotiate prices, and
                 empowered to take further regulatory actions if deemed necessary.   as a result, drug expenses constitute a large and growing burden to
                 A similar vaccine-reporting program is in place to monitor vaccine   patients, Medicare, and private health insurers.
                 safety (VAERS, vaccine adverse event reporting system). The FDA
                 homepage can be found at https://vaers.hhs.gov.     Generic Prescribing
                   The FDA has also increased requirements for labeling on drugs
                 that carry special risks. Dispensers of medications are required to   Generic  drug  dispensing  represents  10%  of  the  total  US  drug
                 distribute “Med Guides” to patients when these medications are   expense but 90% of the drugs dispensed. Prescribing by generic
                 dispensed. These guides are generated by the manufacturers of the   name offers the pharmacist flexibility in selecting the particular
                 medications. In addition, pharmacists often provide patient edu-  drug product to fill the order and offers the patient a potential
                 cational materials that describe the drug, its use, adverse effects,   savings when there is price competition. For example, the brand
                 storage requirements, methods of administration, what to do   name of a popular sedative is Valium. The generic (public non-
                 when a dose is missed, and the potential need for ongoing therapy.  proprietary) name of the same chemical substance adopted by
                                                                     United States Adopted Names (USAN) and approved by the FDA
                 SOCIOECONOMIC FACTORS                               is  diazepam.  All  diazepam drug  products  in  the  USA  meet  the
                                                                     pharmaceutical standards expressed in the United States Pharma-
                 The Cost of Prescriptions                           copeia (USP). However, there are several manufacturers, and prices
                                                                     vary. For drugs in common use, the difference in cost between the
                 Multiple factors are involved in the pricing of pharmaceuticals.   trade-named product and generic products varies from less than
                 Research costs, marketing costs, production costs, shipping costs,   twofold to more than 100-fold. For drugs with a limited market
                 regulatory costs, and profit all contribute to a drug’s price. Insur-  (eg, pyrimethamine, Epi-Pen), the incentive for generic manufac-
                 ance companies pay for the drug because an extensive formulary   turing and marketing is very low, so only one or two generics (or
                 is mandated by regulations. Federal law and regulations require   none) may be available, and price competition is low or absent.
                 Medicare Part D pharmacy and therapeutics committees to make   In most states and in most hospitals, pharmacists have the
                 prescription drug coverage decisions based on scientific evidence   option of supplying a generically equivalent drug product even if a
                 and standards of practice, and also to prevent discrimination in   proprietary name has been specified in the order. If the prescriber
                 a patient’s drug therapy. Because these companies are publicly   wants a particular brand of drug product dispensed, handwritten
                 owned, the shareholders exert a strong influence to maximize   instructions to “dispense as written” or words of similar meaning
                 profits. While the cost to make the drug may be 20% (or less)   are required. Some government-subsidized health care programs
                 of the wholesale price, the aforementioned costs contribute to   and many third-party insurance payers require that pharmacists
                 the cost of the drug to the pharmacist or physician. Greed and   dispense the cheapest generically equivalent product in the inven-
                 the excessive influence of shareholder funds (as opposed to the   tory (generic substitution). However, the principles of drug prod-
                 interests of consumers) add another component of cost and have   uct selection by private pharmacists do not permit substituting
                 sometimes resulted in startling increases in the price of long-  one therapeutic agent for another (therapeutic substitution); that
                 established drugs (which have no current development costs)   is, dispensing trichlormethiazide for hydrochlorothiazide would
                 as well as newer ones. In the case of pyrimethamine, a simple   not be permitted without the prescriber’s permission even though
                 and long-established drug used for toxoplasmosis, the US price   these  two  diuretics  may  be  considered  pharmacodynamically
                 increased from approximately $13/tablet to $750/tablet in 2015   equivalent. Pharmacists within managed care organizations may
                 when a new company acquired the rights to this drug. In 2016,   follow different policies; see below.
                 the price of the formulation of epinephrine most commonly used   It cannot be assumed that every generic drug product is as
                 for anaphylaxis (Epi-Pen) increased from $50 to $300 per single   satisfactory as the trade-named product, although examples of
                 dose, even though no changes were made in the drug, the vehicle,   unsatisfactory generics are rare. Bioavailability—the effective
                 or the injection unit.                              absorption of the drug product—varies between manufacturers
                   A more complex situation applies to the pricing of new, com-  and sometimes between different lots of a drug produced by the
                 plex molecules that, unlike the above examples, required massive   same manufacturer. Despite the evidence, many practitioners
                 research, development, and manufacturing investment, eg, the   avoid generic prescribing, thereby increasing medical costs. In the
                 new agents used for hepatitis B and C. These agents are extremely   case of a very small number of drugs, which usually have a low
                 expensive in the USA ($75,000–$120,000 for one course of treat-  therapeutic index, poor solubility, or a high ratio of inert ingredi-
                 ment), but the manufacturers justify the cost as being less than   ents to active drug content, a specific manufacturer’s product may
                 the alternative (which is often a liver transplant). In fact, these   give more consistent results. In the case of life-threatening diseases,
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