Forbes (4-5-99) Medecine Bitter medicine
Consumers in the $94 billion prescription drug
market are mostly indifferent to price. What will
happen when they all become budget conscious?
Drug problem
By Alexandra Alger
THE NEW ARTHRITIS DRUG Celebrex racked up
881,000 prescriptions in its first eight weeks, the
hottest drug launch since Viagra.
Marketed by G.D. Searle and Viagra-maker Pfizer
Inc., Celebrex is the first in a new class of drugs
known as Cox-2 inhibitors that promise potent pain
relief without bad side effects. Current medications
such as ibuprofen can cause ulcers and internal
bleeding in some patients.
But hold on—fewer than 5% of patients experience
the most severe side effects from current drugs.
The new Cox-2s aren't any better at killing pain.
And Celebrex is far more expensive—$76 for a
month's supply at retail, compared with $24 for
prescription generic ibuprofen. Yet Celebrex
already claims 16% of prescriptions for arthritis
pain, second only to ibuprofen (at 28%). Cox-2
drugs' share will go only higher if Merck &Co.'s
entry, Vioxx, wins approval later this year. Some
health plans fret that half of arthritis patients could
switch to the costly new drugs.
Why would doctors rush to prescribe the latest
meds for patients who may not need it? The simple
answer is that doctors pay no mind to costs at all.
Drug companies spend billions plying docs with
free samples and ebullient literature about their
latest elixirs. Consumer ads stoke demand from
patients themselves. And drug-benefit
plans—aimed at keeping costs down—only drive
demand higher; why not take a Cox-2 when it
costs you the same $10 "copay" as an older drug?
"The plain fact is that physicians don't know the
cost of the very drugs they are prescribing," says
Dr. Alan Blum of Baylor College of Medicine in
Houston. In 1993 he cowrote a small study
showing that most docs have little idea of the
prices of 20 popular drugs they recommend. One
of his colleagues recently prescribed the antibiotic
Ceftin for an uninsured woman with pneumonia.
She balked at the $200 price, got sicker and
ultimately received free samples. Even Blum
admits that in terms of a cheaper alternative, "I
wouldn't even know where to look."
Physicians often prescribe higher-priced drugs
even when an identical copy—the generic—is
available, usually at a small fraction of the cost.
Generics now account for 40% of prescriptions but
would be 75% if they were prescribed every time
they could be, says Roger Williams, a deputy
director at the Food & Drug Administration. Indeed,
generics wouldn't even get 40% of the market if not
for laws that permit pharmacists to substitute them
for brand names unless the doctor insists
otherwise.
Physicians say they prescribe what's best. For
Cox-2 drugs, safety is an important factor. More
than 20 million patients have severe arthritis. Some
13 million use ibuprofen and other nonsteroidal
anti-inflammatory drugs regularly. Of those, 2% to
4% have severe stomach problems; 15% have
milder side effects such as nausea and heartburn;
up to 17,000 die from drug complications annually.
"The numbers are small, but why take a chance?"
says Dr. Bevra Hahn, president of the American
College of Rheumatology. In her Los Angeles
practice, she prescribes Celebrex to any patient
whose insurance covers it.
For health plans, the problem is figuring out who
really needs it. Blue Cross of California, with 4
million members, gets 200 new requests for
Celebrex every day—but only 3 qualify.
Even for patients with cost concerns, including
those who lack drug coverage—56 million
Americans—doctors can show stunning
indifference to price. Belinda Franks of Albertville,
Ala., has been trying to get doctors to trim her
ailing mother's drug bills, which exceed $200 a
month.
"When I ask them if there are cheaper drugs, they
say, 'No, not really,'" she says, frustrated. "They
don't seem to want to help."
Other times patients are the ones who ignore the
costs. It is why Prilosec, a treatment for severe
heartburn known as gastroesophageal reflux
disease, is a top seller with $3 billion in
sales—even though the generic form of Zantac, at
half Prilosec's price, works fine for many patients.
"It's probably overprescribed," admits Dr. Sally
Ling, an internist with Kaiser Permanente in
Overland Park, Kans. "People come in and they
want 'the little purple pill.' "Many doctors relent,
rather than risk losing the patient to a rival, says
Peter Penna, head of pharmacy services for Cigna
Healthcare.
Drug of choice
Doctors often recommend the most expensive
medications when cheaper ones might do the
job.
Drug
1998
prescrip-
tions
(000)
Median
retail cost
(30 days)
SEVERE HEARTBURN
Prilosec
ranitidine
24,000
12,700
$114.00
51.00
ANTIBIOTIC
Augmentin
cefaclor
16,400
3,600
73.60*
40.00*
CHOLESTEROL
Pravachol
gemfibrozil
11,500
5,200
64.00
23.00
HYPERTENSION
Norvasc
verapamil SR
21,000
10,300
40.65
20.70
ANTICOAGULANT
Coumadin
warfarin sodium
14,600
2,800
22.20
17.60
* Ten-day supply.
Sources: DP Hamacher & Associates; NDC Health
Information Services; IMS Health.
What to do? HMOs are starting to demand higher
copays, which might curb some demand for the
hottest products. Coventry Health Care in Nashville
is working on a Web site to let doctors easily pick
cheaper choices. If drug costs keep going up,
Coventry may have to cap pharmacy benefits or
cut doctor reimbursement, warns James (Rusty)
Hailey, a Coventry vice president.
The U.S. drug industry has grown fat on the
price-is-no-object attitude that prevails among both
doctors and their patients. Someday, almost
inevitably, that is destined to change. Prescription
drugs now account for a big chunk of the increase
in the nation's health-care bill. If insurers and
health maintenance organizations find some way
to penalize doctors or patients for using the
costliest and newest drugs, then drug
manufacturers are going to feel the pinch.
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