AYERST-FUNDED JAMA STUDY's USE OF PRE-WAXMAN/HATCH LAW Rx DRUG PRICES

Executive Summary

AYERST-FUNDED JAMA STUDY's USE OF PRE-WAXMAN/HATCH LAW Rx DRUG PRICES lessens the report's relevance to the current marketplace, National Association of Chain Drug Stores (NACDS) President Robert Bolger maintained in a Nov. 17 letter to the editor of the Journal of the American Medical Association. NACDS considers the study "questionable at best and of very little value in terms of the current marketplace," Bolger wrote. Regarding the timing of the study, Bolger commented: "Why the study is being publicized now is rather perplexing. Why would a company spend so much money to do a study that looks at a landscape that has changed so dramatically in the past two years?" Noting that the published report "examines the marketplace during the narrow time frame of April 1, 1984 to June 30, 1984," NACDS wrote: "This just happens to be a period of time [three months] before congressional enactment of the Drug Price Competition/Patent Term Restoration Act." The NACDS letter was written in response to a study published in the Nov. 14 issue of JAMA. The study examined costs, type of payment, and type of pharmacy involved in the dispensing of approximately 900,000 prescriptions in 1,363 drug stores in 39 states over the three month period ("The Pink Sheet" Nov. 17, T&G-5). The JAMA study focused on 42 Rx drugs: 21 brandname products and their generic equivalents. The authors found that, although pharmacies acquire generic drugs at lower cost than their brandname counterparts, the prices consumers paid for brandname versions of furosemide and conjugated estrogen "were comparable, or the differences were small" in comparison to generic versions. The pioneer versions of those drugs -- Lasix and Premarin, respectively -- represent an early post-1962 drug and a pre-1962 drug. Generic versions have been available for many years, and competition from the generics and more recent drug therapies has driven down the prices of Lasix and Premarin. NACDS cited estimates that the ANDA/patent act "will result in some 150 new generic drug products becoming available." The association noted "industry sources are predicting that these lower priced medications will help save consumers as much as $1 bil. over the next decade."