Improving Patient Care

What Every Physician Should Know About Generic Drugs

Are generic drugs second-class medicine or prudent prescribing?

Phil Mohler, MD, and Steve Nolan, PharmD

Covered in FPM Quiz

The United States spent $121.8 billion on prescription drugs in 2000, a 17.3 percent increase from the previous year, making pharmaceuticals the fastest growing portion of the health care budget.¹ The Congressional Budget Office estimates that consumers save 8 billion to 10 billion dollars per year at retail pharmacies by using generic drugs.² But are generic drugs prudent prescribing or second-class medicine? Are we physicians being pushed by managed care organizations to prescribe cheaper drugs that are not in the best interests of our patients? What are the roles for generic drugs in 2002?

Most physicians are not extremely sophisticated about generic drugs, or drug costs in general. In a study of 178 residents and faculty in a community-based family practice residency, physicians were asked about the cost of 50 commonly prescribed outpatient medications.³ The results were as follows:

• Brand-name (or innovator) drug costs were underestimated 90 percent of the time.
• Generic drug costs were overestimated 90 percent of the time.
• The faculty were only modestly more accurate than the residents in their responses.
• Ninety-four percent of physicians reported that regular information on drug costs would help them prescribe more cost effectively.

A review of the literature regarding the attitudes of pharmacists, physicians and consumers toward generic medications, published in 2001 as part of a series by Kirking, et al in the Journal of the American Pharmaceutical Association, included the following findings:

• Hospital and community pharmacists generally support generic medication use but have concerns about generic substitution in drugs with narrow therapeutic indices. They feel pressure from managed care plans and, to a lesser extent, from patients to use generics.
• Physicians appear to be neutral to modestly positive about the use of generics. They admit that their knowledge of generic names and allowable variation in products is limited. They too perceive pressure by managed care plans and patients to use generics.
• Consumers are generally positive toward generic-drug usage. They are influenced to use generic medications by consultation with clinicians and availability of prescription drug coverage.

A rose is a rose is a rose

According to the Food and Drug Administration (FDA), a generic drug is identical or bioequivalent to its brand-name counterpart in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. The current FDA criterion for bioequivalence for both branded and generic drugs is a 0.8 to 1.2 confidence interval. Tighter confidence intervals would result in many branded and generic products not being bioequivalent to themselves.

But are generic and branded drugs interchangeable in the case of narrow-therapeutic-ratio (NTR) drugs? These drugs (such as warfarin, quinidine, procainamide, theophylline, lithium, phenytoin, carbamazepine and valproic acid) are used in clinical situations where small variations in tissue levels might result in sub-therapeutic or toxic clinical outcomes. The FDA makes no distinctions between standard and NTR drugs when it comes to interchangeability. NTR drugs do require frequent adjustments and careful patient monitoring, regardless of whether a brand-name or generic product is being used. However, the FDA does not recommend that physicians perform additional testing when switching NTR drugs or any other drugs, whether from branded to generic, generic to branded, or generic to generic.⁴

Becoming generic

When a patent on a drug expires, the FDA generally grants a single generic-drug manufacturer the exclusive right to produce the generic drug for six months. This generic typically costs 20 percent to 25 percent less than the brand-name drug. (Recently, when Prozac became available as generic fluoxetine, the retail price fell from $85 to $68 per month.) After six months, multiple generic manufacturers often enter the market and costs plummet 50 percent to 80 percent.

Generic products are less expensive because they do not require lengthy clinical trials to prove their safety and effectiveness and because they are infrequently marketed to physicians and consumers. Generics are allowed into the market as a means of encouraging competition, lower prices and innovation within the industry.

Of course, the introduction of generic products isn't necessarily good news for innovator pharmaceutical companies and their market share. To retain market share, some companies employ strategies that seem motivated more by business concerns than by clinical concerns, such as releasing "improved" brand-name versions of their products. For example, as the patent on Prozac (fluoxetine) was expiring, its manufacturer rolled out Prozac Weekly, a once-a-week, 90mg tablet. Similarly, as Prilosec's (omeprazole) patent expires, its maker has introduced Nexium, Prilosec's isomer. These are just two examples among many.

Bottom line

While brand-name drugs certainly play an important role in medicine, generic drugs are a cost-effective alternative. Pharmaceutical costs are increasing faster than any other portion of the health care budget, and this increase has been cited as a primary reason health insurance premiums around the country increased 11 percent in 2001.⁵ Physicians are in the driver's seat when it comes to controlling these costs.

Not only are generic drugs cost-effective, but they are safe. Generic drugs are bioequivalent to their brand-name twins, and because generics tend to be older, they are generally less risky than new drug therapies. As new drug approval times have steadily decreased over the past 10 years,⁶ adverse reactions such as those seen with Rezulin and Baycol have become more of a concern. Generic drugs offer sound treatment options for our patients.

Dr. Mohler practices with Family Physicians of Western Colorado in Grand Junction, Colo. Dr. Nolan is a clinical pharmacist on the Rocky Mountain HMO Pharmacy staff. Conflicts of interest: none reported.

Send comments to fpmedit@aafp.org.

1. Report details national health care spending increases in 2000 [press release]. Baltimore, Md: Centers for Medicare & Medicaid Services; Jan. 8, 2002. Available online at www.cms.hhs.gov/media/press. Accessed Feb. 7, 2002.
2. How increased competition from generic drugs has affected prices and returns in the pharmaceutical industry. Washington, DC: Congressional Budget Office; July 1998. Available online at www.cbo.gov/showdoc.cfm?index=655&sequence=0. Accessed Feb. 7, 2002.
3. Ernst ME, Kelly MW, Hoehns JD, et al. Prescription medication costs: a study of physician familiarity. Arch Fam Med. 2000;9:1002-1007.
4. Nightingale SL. Therapeutic equivalence of generic drugs. Letters to health practitioners. Rockville, Md: Food and Drug Administration; Jan. 28, 1998.
5. Kaiser Family Foundation/Health Research and Educational Trust. Employer Health Benefits Survey. Menlo Park, Calif: Kaiser Family Foundation; 2001.
6. Approval times for priority and standard NDAs: Calendar years 1993-2001. Rockville, Md: FDA/Center for Drug Evaluation and Research; last updated Jan. 24, 2002. Available online at www.fda.gov/cder/rdmt/NDAapps93-01.htm. Accessed: Feb. 7, 2002.