Update: Senate & Justice Dept. Investigate Generic Drug Prices [Video]

Last week I told you about the CBS News story on skyrocketing generic drug prices. As referenced in that report, the Senate’s Health, Education, Labor, and Pensions Subcommittee on Primary Health and Aging held a hearing on the question, “Why Are Some Generic Drugs Skyrocketing In Price?” on Thursday, November 20th.

NCPA called for hearing

The hearing was first called for by NCPA in January. Subcommittee Chairman Bernie Sanders (I-Vermont) presided. The nine panelists included one independent pharmacist and one patient.

Rob Frankil, NCPA member and President of Sellersville Pharmacy, Inc. in Sellersville, PA, recalled the following case in his prepared statement.

“A recent example from my own experience is the price of Digoxin—a drug used to treat heart failure. The price of this medication jumped from about $15 for 90 days’ supply, to about $120 for 90 days’ supply. That’s an increase of 800%. One of my patients had to pay for this drug when he was in the medicare Part D coverage gap in 2014. Last year, when in the coverage gap he paid the old price. This year he paid the new price. Needless to say, the patient was astounded, and thought I was overcharging him. The patient called all around to try to get the medicine at the old, lower price, but to no avail. This caused him lots of stress and time, and caused us lots of stress and time in explaining the situation, reversing, and rebilling the claim. This example is typical of how these price spikes put consumers and pharmacists in a bad position, often grasping at straws for explanations. And all the while, everyone pays more, including the patient, the pharmacy, and the insurer (often the federal government).”

Frankil went on to discuss how generic price spikes cause serious reimbursement issues for independent community pharmacists, especially when those reimbursements are managed by PBMs. (Download his complete statement)

Carol Ann Riha of West Des Moines, IA, the sole patient to testify, related how her prescription costs had jumped from $849 to more than $1,700 due to price increases. Ms. Riha asked, “How can anyone on a fixed income deal with these vagaries in the system?”

Professor Stephen Schonmeyer analyzed 280 common generic drugs and found that approximately one-third of them had sustained price increases in 2013.

Some panelists discussed the economic forces that have contributed to the rising costs of generic drugs, while others suggested ways to revamp the system. The full list of panelists (plus prepared statements where available) included:

  • Congressman Elijah Cummings (D-Maryland) – Download Statement
  • Stephen W. Schondelmeyer, PharmD, PhD (Professor and Director, PRIME Institute, University of Minnesota College of Pharmacy – Download Statement
  • Robert Frankil, RPh (Independent Pharmacist and NCPA Member) – Download Statement
  • Erez Vigodman (President & CEO, Teva Pharmaceutical Industries Ltd)
  • Arthur Berosian, JD (President & CEO, Lannett Company)
  • Jeffrey Aronin (Chairman & CEO, Marathon Pharmaceuticals, LLC)
  • Carol Ann Riha (Patient)
  • Scott Gottlieb, MD (Resident Fellow, American Enterprise Institute) – Download Statement
  • Aaron Kesselheim, MD, JD, MPH (Assoc. Professor of Medicine, Brigham and Women’s Hospital and Harvard Medical School) – Download Statement

Senator Sanders announced that he was introducing legislation requiring the makers of generic drugs to issue rebates to the federal Medicare and Medicaid programs whenever the cost of their generic drugs increased at a higher rate than the rate of inflation. A similar rebate program is already in effect for brand name drugs.

Click here to watch video of the entire hearing (1 hour, 36 minutes).

Media coverage

You’ll find more in-depth coverage from various media sources listed below.

Justice Department investigating

As reported in the Wall Street Journal article, Justice Department Probes Generic Companies After Price Hike Reports, the Justice Department has subpoenaed sales and marketing personnel from drug makers Lannett and Impax Laboratories on the heels of an investigation into Digoxin price hikes by the Connecticut Attorney General.

Lannett and Impax are two manufacturers that sell Digoxin in the US.

Brand name drug prices continue to rise

The recently updated Rx Price Watch of AARP reports that brand name drug prices are rising as well.

According to the report,

“In 2013, retail prices for 227 brand name prescription drugs widely used by older Americans increased by an average of 12.9 percent. In contrast, the general inflation rate was 1.5 percent over the same period.”

Keeping you informed

I will continue to report on the issue of rising drug prices as stories develop.

All of these stories have one lesson in common for independent pharmacies. With prices fluctuating without notice, you need to compare prices of pharmaceuticals before you buy.

TRxADE has created a marketplace where suppliers compete for your business and you have the tools at your fingertips to stay informed and buy competitively. Daily Deals, Opportunity Buys, and Shortage Products comparisons will help keep you ahead of the curve.

If you are a TRxADE member and your pharmacy is not getting the most out of its membership, contact our Membership Assistance Team for help at 800-261-0281.

CBS Exposes Generic Drug Wholesale Price Crisis [VIDEO]

Reporting on a New England Journal of Medicine column, High-Cost Generic Drugs — Implications for Patients and Policymakers, CBS News shined a very bright light on how the lack of competition for some generic drugs has led to skyrocketing prices.

NCPA surveyed pharmacies on the issue in 2013 and reported that 77% of pharmacists noted a rise in generic prices at least 26 times in the preceding six months.

Read more

Does Your Independent Pharmacy Suffer from Less Than 2020 Vision?

According to futurist David Houle, we live in the “shift age,” a time of disruptive change characterized by the rapid emergence of new technologies, new efficiencies, and new thinking that will displace legacy systems.

Certainly, disruptive change has been a constant for independent community pharmacies since the emergences of large chain pharmacies, supermarket pharmacies, PBMs, mail pharmacies, online pharmacies, Medicare, Medicaid, PPNs, the Affordable Care Act, more regulations, and lower reimbursements to name just a few.

Houle contends that organizations of all sizes that do not shift their strategic thinking from planning for the next fiscal year to envisioning their future for the next four to six years out will struggle mightily to survive. That brings us to 2020, and your vision of your pharmacy.

Independent pharmacy specialties and services that differentiate

With all their advantages, major pharmacy retailers are saddled with the disadvantage of all needing to be the same. Many independent pharmacies have turned to specialization and value added services as a way of differentiating themselves from their larger but more generic competition.

Deep understanding of patients and community has led to many different types of specialties and value added services. Here are just a few:

  • Compounding (exclusively)
  • Compounding (hybrid maintaining full pharmacy practice)
  • Medical Therapy Management
  • Medical supplies & equipment
  • Pharmacy plus homeopathic remedies and dietary supplements
  • Pharmacy plus upscale personal care items
  • Pharmacy plus pet pharmaceuticals (including veterinary compounding)
  • Prescription synchronization
  • Free delivery

Is there a specialty in your pharmacy’s future?

Disintermediation – eliminating the middle man to save time and money

As David Houle explains in the video below, disintermediation is a disruptive change that began in the 90s when the Internet allowed us to eliminate intermediaries in many of our transactions, including stock and air travel purchases, that will increase dramatically during the shift age.

(This video is meant only to illustrate David Houle’s concept of disintermediation in the shift age. No endorsement by David Houle is expressed or implied.)



Disintermediation is key to taking back control of your time and your margins.

For an independent pharmacy, the development of direct online pharmaceuticals ordering was a first, transitional stage in the disintermediation of the pharmacy-seller supply chain. But for those using more than one or two suppliers, the ordering process had to be repeated for each supplier, while purchasing from or selling to other pharmacies could be handled only by phone and fax.

TRxADE is a disintermediation agent of the shift age, giving independent pharmacies free access to compare wholesale drug prices and purchase directly from multiple suppliers with no middle man in the way.

Pharmacies started using TRxADE to save time and money in 2010. In its first four years, 2,000 independent pharmacies joined TRxADE. At the current rate, that number will more than double in the next 12 months.

TRxADE’s 2020 vision includes helping more than half of all independent pharmacies in the United States save on 10-20% of their drug purchases. We are well on our way.

What is your vision of your pharmacy in the year 2020?

What will your pharmacy look like in 2020? Has your pharmacy already made substantial changes? Will there be more?

Please share your vision in the comments.

Obsolete Ordering Routines Cost Independent Pharmacies up to $553/hour

Emergence of the “opportunity market” for independent pharmacies

As in all industries, entrepreneurs have stepped up to provide new opportunities to independent community pharmacies with innovative, customer-focused technology based platforms.

TRxADE, and companies that attempt to follow its lead, provide independent pharmacies with “opportunity markets” – ways to save money by purchasing pharmaceuticals from sources other than their primary or backup suppliers.

Does that mean these services are trying to replace your primary supplier? Not at all. Read more