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Time to put pharmacists under the microscope
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In the heart of Sydney, six men in suits meet. Three of the men are from Big Pharma and three are from a large pharmaceutical chain in Australia. The subject of their discussions is the price for which the company will sell their generic medication to the chain. As the Pharmaceutical Benefits Scheme price paid to the pharmacies is set by the Government, every cent they can obtain the drug for below this price is money in the pockets of the pharmacists. They find it easier to negotiate a “good” price with more pharmacies in their group. This advantage has led to the rapid spread of pharmacy chains across Australia. But why does this matter? Doctors determine the medications we receive don’t they? That’s where all the attention is focused, with clear codes of conduct, etc. This is true: the doctors choose the medication but they do not choose the BRAND of medication. Even if a doctor writes a prescription for a generic the pharmacist determines which brand the patient receives unless the patient insists on receiving the brand the doctor prescribed. The pharmacist has another bargaining chip to play in their negotiation over price — the promise to limit the pharmacies in the chain from dispensing other brands, including generics, over a set period. They have found in the past that the line “I don’t have that brand but can get it in for you in three days” works well to direct most patients to the brand of generic they wish to sell. There is no media or any other scrutiny and no code of conduct for such negotiations. Such is the power of the Pharmacy Guild, most people aren’t even aware this process occurs. In another part of Sydney, 120 doctors are ushered into a ballroom where a $100 per head dinner takes place. The guest speaker has been chosen and briefed by the host — Big Pharma — but is an expert in his/her field and answers questions from a knowledgeable audience. Such events occur all over the country. In some regions the only contact the local doctors have with such specialists is via this method. The doctors all leave, having received entertainment valued at less than 0.0005% of their gross income: hardly sufficient to influence their prescribing pattern. The media cover the event and it is reported and scrutinised carefully by the watch dog established to enforce the code that covers such events. Total cost: less than $150,000. There are 4200 pharmacists in Australia, with over 167 million prescriptions issued on the PBS in 2006-2007. One dollar saved on each script via discounted generics puts close to $40,000 in each of their pockets per year. Does this arrangement receive scrutiny? Why should the pharmacist choose the specific generic the patient receives? Why does the Federal Government via the national prescribing service (NPS) advertise for people to choose generic medicines when all the financial benefit for doing so flows into the pocket of the pharmacists and not the people? Does the supply of generic medication, a different size and shaped tablet, each month, cause patient confusion and medication error? With the impending negotiations in relation to the next pharmacy agreement, perhaps this situation can and should be corrected. |
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13 Comments
Along with more scrutiny for pharmacists, let’s have a look at vets. Having just paid $67.50 for a 25ml bottle of Bayer Canaural ear drops (which sell for $AUS22.00 overseas) for my four -legged friend, I am outraged at such rapaciousness. The visit to the vet (about 10 minutes) cost $250.00 all up. Bayer told me they don’t set recommended prices in Australia because vets set their own prices. The pharmacists are babes in the woods in comparison.
As a pharmacist of 20 years I would like to point out that we do not as a matter of policy deliberately set out to decieve, dupe, mislead or rip off the general public (usually they do that just fine all by themselves). I do agree that the generic substitution issue is a health management minefield of confusion, particularly for those who are most easily confused e.g. elderly patients on multiple therapies. It is physically and economically impossible for all pharmacies to keep all generic brands of all drugs commonly available. As a matter of policy, and I can only speak of my own practice in this matter, we attempt to minimise generic brand changing as much as possible and inform the patient of such changes when they occur.The generic medication issue has been driven by governnment policy of cost control and pharmacy as a business is reactive to that. There is no other “secret” agenda other than running an economically viable business that employs many many ” working families”. We don’t delberatley choose any particular brand as deliberate tactic to decieve the public - we choose a range of brands that are economically viable in terms of turnover and cost. There is no documentation that I am aware of that implies some brands are of less or greater efficacy, so these are tools for choosing which brands are stocked. The bottom line is, that when in doubt ask the pharmacist - we usually pretty helpful - and if the one you speak to isn’t - go somewhere else that is.
So $100 is less than 0.0005% of Doctors’ gross income? Wow, that means they must earn $2 million p.a.
Having been state manager for the then major distributor of pharmaceuticals in Australia I can vouch for the sentiments of the story.
Ask your pharmacist next time they offer you the cheaper generic - “How much cheaper?” - the answer will be small - last time it was $1.90 for me - then ask - “how much more do you make in profit than the branded?” - and watch them run. The truth is the pharmacists were getting 30-50% off the price than the comparable branded product. So if the branded was $20 the generic was say $10 - and sold at a couple of bucks lower so an extra $8 would be available - so the incentive is to save money for the client - bah humbug - more profit to the pharmacy.
Also ask how is it that a 25 year old pharmacist can buy a $4 million pharmacy with no assets and minimal income? Happens dozens of times a year in this industry - I pity the poor GPs who are scrutinised to buggery, yet pharmacy has an amazingly powerful voice in the Pharmacy Guild to protect and lobby for it. Worth every penny of subscriptions it receives.
I have concerns over the whole issue of authenticity of generic drugs having come across the problem while living in the US and recently here when the paracetemol I was giving my daughter who had a high fever - a chemist own brand had no impact but when I used the one branded tablet I had left her temperature dropped only to re-elevate when i switched back to the non branded one. It seems that authenticity of drugs is given so little attention - indeed pharmacists in the US successfully lobbied to ensure that no authentication measures such as RFID were put in place as they considered it an unneccessary cost. Tell that to the cancer patients in the US who took an expensive cancer treatment drug which turned out to be fake. There is a lot of work that could be done on the whole issue of market power, authenticity, tendering processes in the pharma area but you need a lot of political will…. So dont expect anything to change anytime soon.
Having been state manager for the then major distributor of pharmaceuticals in Australia I can vouch for the sentiments of the story.
Ask your pharmacist next time they offer you the cheaper generic - “How much cheaper?” - the answer will be small - last time it was $1.90 for me - then ask - “how much more do you make in profit than the branded?” - and watch them run. The truth is the pharmacists were getting 30-50% off the price than the comparable branded product. So if the branded was $20 the generic was say $10 - and sold at a couple of bucks lower so an extra $8 would be available - so the incentive is to save money for the client - bah humbug - more profit to the pharmacy.
Also ask how is it that a 25 year old pharmacist can buy a $4 million pharmacy with no assets and minimal income? Happens dozens of times a year in this industry - I pity the poor GPs who are scrutinised to buggery, yet pharmacy has an amazingly powerful voice in the Pharmacy Guild to protect and lobby for it. Worth every penny of subscriptions it receives.
Here’s a link to see what has happened in regard to transparency in pricing & moving Pharmacies from relying on maximising generic discounts to being paid set fees for dispensing generics. Let’s not forget how much generics save the PBS & in turn taxpayers even if a generic doesn’t represent a substantial discount to the patient.
http://www.health.gov.au/internet/main/publishing.nsf/Content/Strengthening-your-PBS.htm
IMHO you lack insight into developments in pricing of generics over the last few years.
lottery may be but on of my regular medications in generic form is at least ten dollars cheaper than the patented version.
I now a pharmacist who earns well in excess of $1m per year. He knows that he is overpaid for what he does and knows that the gravy train will end eventually.
The government needs to step in now and allow the major supermarket chains and other competitors to set up their own pharmacies in their shops so as to drive down the cost of script to everyone.
” Does the supply of generic medication… cause confusion..” Enormous confusion, sometimes life threatening, especially for elderly patients being discharged from hospital who will usually be given a generic. The patient often will think this to be a new medication on which they have been comenced and effectively begin overdosing themselves. If they do not have have a regular family physician with whom they can liaise, and the whole sysytem militates against continuity of care, then there is a recipe for disaster.
In my experience, generics are often of dubious quality, especially anti convulsants and other neuroleptics.
So generic medicines are inferior eh ?
Food for thought maybe then in a recent study in the Journal of the American Medical Association.
This analyzed data from 47 studies of generic and brand name cardiovascular drugs published between 1984 and 2008 and the lead author concluded “we found no evidence that brand-name drugs are any better in terms of clinical outcomes than generic drugs.” The analysis focused on clinical outcomes for patients such as heart rate, blood pressure, illness, and death. Brand-name drugs were not found to offer any advantage for patients’ clinical outcomes.
The research also reviewed editorials and commentaries published during the same period and discovered that over half of them voiced negative views on substituting generic drugs, but that some of these views were expressed by those with financial connections to drug companies.
I’ve seen patients have problems with both brands and generics. Lets face it, we live in a cash limited world (personally and governmentally) and wasting money (whoever’s it is) on brands which are no better is a nonsense. In some countries the relative costs of brands and generics are stark and you may have the the choice of treating one person with the branded drug or 20 with the generic equivalent - enough said !
I am going to begin retraining as a pharmacist this year, and have been trying to get my head around the Australian pharmaceutical industry for a while.
Having read posts and articles on Australian pharmacy sites, and by seeking out pharmacists, it seems to me that many pharmacists are unhappy with the ‘corporatisation’ of their profession. Many pharmacists (employees in community pharmacies) are unhappy with the workloads they are expected to handle and the little time this allows for patient consultations; they feel like script-filling automatons.
It would be the owners of pharmacies (who must currently be pharmacists themselves) who would benefit from the increased profits that may flow from the generic substitution deals discussed in this article, not the many pharmacists who are employed by them.
I think there is an important role for the pharmacist in our health system, however I’m worried that the Pharmacy Guild is more concerned with the interests of pharmacy owners than with pharmacists more generally, and that this is giving the profession a bad name.
To David Monash: Yes I’m a pharmacist, about to put an end to your whining. No one points a gun to every patient’s head and demands that they take the generic. It is simply a choice that is offered and the consumer will ALWAYS have the final decision as to which brand they wish to have. Yes it is true that the profit margins are greater for generic medications than original brands, I fail to see a problem with that when some of the savings are ALWAYS passed down to the patient as per the price which are dictated by the government and not pharmacists. Secondly, to say that doctors can not specify which brand a patient takes is plain wrong. Either you don’t write very many prescriptions, or you don’t pay attention to what is pre-printed on each and every prescription pad you receive. There is a box that you can tick which says “brand substitution not permitted”. If you tick that box, the patient is not allowed to have another brand if it is against their wish. Generics save money, you can’t deny it, for pharmacists, the government and the general public. As our population gets older and requires more medication than ever, our latest PBS costs are actually decreasing and it is contributed in no small part to the wide use of generic medications. So please, a little less ignorance goes a long way.
To Yasmin King & John James: All generic medications are tested to have the same safety, quality and efficacy before they are approved by the TGA which is our governing body for medicines as a generic to the originating brand. To do so requires the companies that make these generics to conduct tests and trials costing millions of dollars. Dubious quality? The only thing that is dubious is the old placebo effect of the generic product.