Low-cost generics are mixed blessing for diabetes treatment

July 1, 2011

Low-cost generic drug programs pioneered by Wal-Mart and other big-box retailers are a mixed blessing for patients with diabetes.

Key Points

Low-cost generic drug programs pioneered by Wal-Mart and other big-box retailers are a mixed blessing for patients with diabetes. While the cost for common generic medications has fallen to $4 and less, the cost of brand-name products has soared. The loss leader strategy used by big-box, chain, independent, and online pharmacies, has boosted the mean cost of branded diabetes medications by up to 113% since 2008.

"As we begin to rely on generics as cost savers, the money has to come from somewhere," said Ronald Tamler, MD, PhD, MBA, Mount Sinai School of Medicine, New York. "Pharmacies are getting patients in the door with a low-cost generics and making their money on brand-name products."

Dr Tamler supervised a 2010 price survey for the 10 most commonly prescribed diabetes medications in the New York metro area and presented the results as a poster at the American Diabetes Association's 71st Scientific Sessions in San Diego. The 2010 survey updates similar findings from 2008.

The maximum price difference for generic metformin, for example, is $5.66. CVS was the less expensive at $3.33, an independent pharmacy the most expensive at $8.95. Among branded products, pioglitazone (Actos, Takeda) had the largest price gap at $80.62, ranging from $209.38 at Medco by Mail to $290.00 at Kmart. The mean cost difference for generics was $9.28 versus $54.32 for brand-name products.

Most pharmacy retailers have adopted a loss leader strategy, Dr Tamler said. At least 1 retailer is giving away a 30-day supply of metformin to get patients in the pharmacy. At the same time, pharmacies are increasing prices on branded Rx products to make up for declining generic prices. The survey found that Wal-Mart has raised branded prices 32% since the 2008 survey, independents by 34%, and Kmart by 35%.