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>Civica Rx will require hospitals to commit to long-term contracts to buy the medications at fixed prices, even if another generic company drops its prices lowe

>Civica Rx will require hospitals to commit to long-term contracts to buy the medications at fixed prices, even if another generic company drops its prices lower. Liljenquist argues that the long-term stability will be more attractive than the short-term temptation of getting a deal. Just a guess: existing high-priced generic pharma companies will react by offering similar long-term contracts. They'll try to do an end run around Civica Rx. I will admit that I'm puzzled that the FDA has not reacted to the high prices and shortages by allowing more competitors to be licensed to create various drugs and to enter the market quickly and easily.

pkaye 8y ago
Being a renal patient, I take a whole bunch of medications. One of the medicines I take became generic 1 year ago and now it is only $5/month under my insurance. Meanwhile another one became generic 4 months ago but it is still $90/month under my insurance. I just cant wait till next year when hopefully my insurer renegotiates the second one down. I think when 3-4 generics manufacturers start selling a medicine, the prices go down a lot.
- refurb 8y ago
  The first generic drug approved gets 6 months of exclusivity where no other generic drug can be approved by the FDA. As such, the first generic is typically ~10-20% lower than the branded drug. Once the 6 months expire, other generic manufacturers pile in (assuming it's a big enough market) and the price drops 80-90%.
  - chadash 8y ago
    > The first generic drug approved gets 6 months of exclusivity where no other generic drug can be approved by the FDA. Not quite. The first patent that files a lawsuit challenging a patent on the non-generic drug and wins said lawsuit gets 180 days exclusivity. This rule was established to incentivize generic companies to challenge drug patents and get their products to market sooner. In the case where the patents aren't being challenged, there's no exclusivity for generic drugs. In practice, this 180 day exclusivity is a very big deal to generic companies, because typically the first to market among the generics will have a big edge in capturing the market (once a drug has a generic, pharmacies will typically automatically fill prescriptions for the brand name drug with the equivalent generic unless the doctor specifies not to).
    - jrowley 8y ago
      In the state of California pharmacies are legally required to fill the generic unless the doctor specifies otherwise.
    - refurb 8y ago
      You can get 180 exclusivity even if you don't challenge the validity of the patent. From the FDA guidance[1 - page 6]: When filing an ANDA, the sponsor can do one of the following 4 things to gain 180 exclusivity: (1) indicate no patent exists in the Orange Book (paragraph I cert), (2) that the patent has expired (paragraph II cert), (3) that the patent will expire on said date (paragraph III cert) or (4) that the patent is invalid, unenforceable or will not be infringed (paragraph IV cert) But you are correct in that it's the status of the patent and how it relates to the filing that drives the 180 day exclusivity. My comment was a simplification, since I can't think of anyone who would file and not do that. [1]https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM536725.pdf https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegula...
nharada 8y ago
> Just a guess: existing high-priced generic pharma companies will react by offering similar long-term contracts. They'll try to do an end run around Civica Rx. If they do this then won't Civica Rx have done exactly what they wanted to do?
- HillaryBriss 8y ago
  yes, probably. but the situation makes me think about the way OPEC nations tried to fight back against Texas shale oil production: lower the price per barrel for a while and squeeze highly leveraged shale producers and their financiers -- make it more risky for them. I wonder about the longer term equilibrium.

pkaye 8y ago

Being a renal patient, I take a whole bunch of medications. One of the medicines I take became generic 1 year ago and now it is only $5/month under my insurance. Meanwhile another one became generic 4 months ago but it is still $90/month under my insurance. I just cant wait till next year when hopefully my insurer renegotiates the second one down. I think when 3-4 generics manufacturers start selling a medicine, the prices go down a lot.

refurb 8y ago
The first generic drug approved gets 6 months of exclusivity where no other generic drug can be approved by the FDA. As such, the first generic is typically ~10-20% lower than the branded drug. Once the 6 months expire, other generic manufacturers pile in (assuming it's a big enough market) and the price drops 80-90%.
- chadash 8y ago
  > The first generic drug approved gets 6 months of exclusivity where no other generic drug can be approved by the FDA. Not quite. The first patent that files a lawsuit challenging a patent on the non-generic drug and wins said lawsuit gets 180 days exclusivity. This rule was established to incentivize generic companies to challenge drug patents and get their products to market sooner. In the case where the patents aren't being challenged, there's no exclusivity for generic drugs. In practice, this 180 day exclusivity is a very big deal to generic companies, because typically the first to market among the generics will have a big edge in capturing the market (once a drug has a generic, pharmacies will typically automatically fill prescriptions for the brand name drug with the equivalent generic unless the doctor specifies not to).
  - jrowley 8y ago
    In the state of California pharmacies are legally required to fill the generic unless the doctor specifies otherwise.
  - refurb 8y ago
    You can get 180 exclusivity even if you don't challenge the validity of the patent. From the FDA guidance[1 - page 6]: When filing an ANDA, the sponsor can do one of the following 4 things to gain 180 exclusivity: (1) indicate no patent exists in the Orange Book (paragraph I cert), (2) that the patent has expired (paragraph II cert), (3) that the patent will expire on said date (paragraph III cert) or (4) that the patent is invalid, unenforceable or will not be infringed (paragraph IV cert) But you are correct in that it's the status of the patent and how it relates to the filing that drives the 180 day exclusivity. My comment was a simplification, since I can't think of anyone who would file and not do that. [1]https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM536725.pdf https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegula...

nharada 8y ago

> Just a guess: existing high-priced generic pharma companies will react by offering similar long-term contracts. They'll try to do an end run around Civica Rx. If they do this then won't Civica Rx have done exactly what they wanted to do?

HillaryBriss 8y ago
yes, probably. but the situation makes me think about the way OPEC nations tried to fight back against Texas shale oil production: lower the price per barrel for a while and squeeze highly leveraged shale producers and their financiers -- make it more risky for them. I wonder about the longer term equilibrium.