What's the deal with generic Concerta?
March 3, 2012 10:49 PM   Subscribe

What's the deal with Generic Concerta?

As of 2011 Concerta is now available as a generic drug (Methylphenidate ER OSM). My insurance company didn't recognize the generic during 2011 so it actually cost me less to stick with the name brand. The generic and name brand versions are both made by the same manufacturer, to my knowledge.

As of this year my copay for either "formulation," generic or name brand, has increased by $20. Whereas last year the name brand cost me $30, I'm paying $50 this year, even if I go with the generic, which my formulary claims is "tier 1" while the "copay calculator" on my website confirms that either way I'm expected to pay $20 more.

This doesn't make much sense to me, but Concerta uses a complex osmotic delivery system and the generic drug is almost as costly to my insurer as the name brand. "Almost" is the effective word: before I knew that the generic was supposedly "tier 1" as of 2012 I filled a name-brand script for $50 and saw that it cost my insurance company $322 back in January. Once I switched to the generic, I saw that it cost them $271 in February.

I think there's a very interesting story here. Clearly the drug is expensive but there is no copay incentive or cost savings passed to me as a consumer. It would be petty of me to stick with the name brand at this point because I'd be essentially increasing my burden on my insurer by $50 a month for no tangible benefit (other than petty satisfaction since my employee monthly premium is around $500). I realize that in some cases there can be differences in quality / binders / etc between name-brand and generic, but in this case the drug is identical. Or is it? I've heard different things (they are identical and made in the lab facility [both pills bear an "ALZA" label] or they both share identical osmotic delivery systems patented by "ALZA" and the rest of the pill is handled independently).

From a free market perspective this seems all very silly but it also makes perfect sense: beyond switching to a different medication entirely, it would be highly impractical for me to attempt to change my situation by finding another insurance policy (aka finding a new job or buying coverage out of pocket at an exorbitant rate) so why bother passing the savings on to me?

So I guess my questions would be:

1) Does anyone know the "full story" on how this generic/name-brand agreement came into being, and why an insurer could expect to save $50 on a generic drug manufactured by the same company as the name brand (assuming the generic and name brand truly are identical)?

2)If you take Concerta yourself, does your insurance company provide you any incentive for choosing the generic drug? If so, I'd be curious to know more about your plan. Obviously it's extremely unlikely that I would switch to a different insurance carrier, but this could be useful knowledge if I were to raise this issue with my carrier (over the phone all they can do is run test claims through and say "yep, it costs you $50 either way," so I am awaiting a reply on an email I sent via their website). I would imagine that if I took the "petty" route my carrier could decide to suddenly cover 0% of the name brand drug, which would be caught by my pharmacist when they ran the claim through. (Seriously though, I won't take the petty route, I promise!)

3)Is it possible to enroll for mail-order Concerta? My carrier claims I would save $25 every three months using mail-order. This is based on an automated web-based quote system, so it's possible that I'm being told I'd be saving money when it may not be legal to provide the drug through mail-order.

Concerta is a schedule II drug with no refills allowed - I typically get a month's supply at a time, and occasionally get two scripts, with one marked "do not fill until [today's date+30 days]." My carrier specifically quoted $125 for a 90-day supply but I'm curious how the logistics would work here: it sounds like I'd need to arrange for getting three scripts at a time, and would need to mail them in.

What would happen if the scripts get lost in the mail and my doctor has a "zero tolerance" policy on re-writing scripts due to the high potential for abuse with this medication? To put it another way, would there by any recourse? I'm assuming I'd have to take the same tack as I do with rebates though I don't know how effective the approach would be: scan in the original before sending it off.

I have sent an email to my carrier so I may have a clear answer on item #3 shortly, but questions 1 and 2 are more intriguing :)
posted by aydeejones to Health & Fitness (4 answers total)
I take generic Concerta, and my insurance is provided by my public university. The carrier is Anthem Blue Cross.

I pay $25/month for non-generics, and $5/month for generics. Since I get the generic Concerta, I pay $5 a month. I take several prescriptions - some generic, some not, but I always take the generic when available - I don't know if it's possible to take a non-generic when the generic is available with my insurance coverage.
posted by insectosaurus at 11:26 PM on March 3, 2012

FWIW I interned at ALZA where they used to manufacture Concerta (I think the plant moved to Ireland or something). My department was the transdermal patches (OROS tablets was another department), where they manufactured the generic products on the same exact machines, equipment, employees, etc. So everything is the same in regards to generics.
posted by Mr. Papagiorgio at 12:18 AM on March 4, 2012 [2 favorites]

I don't know about the specifics of this drug, but you're likely dealing with an "Authorized Generic" drug, which is being produced by the exact same people as the name-brand drug.

The formulation/packaging aren't necessarily exactly the same, though this is often the case, especially in the first few years after the name-brand goes off-patent.

There are a few reasons why a pharmaceutical company might want to do this. For starters, they'll only begin doing it once a generic competitor becomes available -- this doesn't necessarily happen immediately after the name-brand goes off-patent. If the drug in question is difficult to formulate or manufacture, or there's not much interest in producing a generic equivalent, generic versions of the drug might take a bit longer to show up. The name-brand pharma company is obviously going to milk the opportunity to score a few months of extra sales with their substantial name-brand price premium.

The moment that the generic hits the shelves, the name-brand manufacturer launches its own generic version. After all, why not compete? This has a few very specific microeconomic effects when there are only one or two generic competitors to the name brand -- namely, the name-brand manufacturer is able to continuously undercut the generic competitor until the competitor is no longer willing to reduce its profit margin. The name-brand company has already been producing the drug in quantity for several years, and is likely to be able to do so more efficiently than the new generic manufacturer. The authorized generic can be sold at a price that is still (barely) profitable for the first-party, but not making any money for the generic company. This makes the generic drug business far less lucrative than it otherwise might be, and discourages competition.

In the case of Concerta, it seems likely that the price competition was only able to push the cost of the drug $50 below the name-brand's price. Odds are, the generic company is having difficulty producing the drug at reasonable costs, and wasn't willing to continue the pricing war with the authorized generic without risking profitability.

These macroeconomic effects are magnified when there is only exactly one (non-authorized) generic competitor, as a few odd quirks in US patent law come into play here. In a few special cases, when a drug loses its patent, the first generic version of the drug to be ready to market is granted a 180-day exclusivity period to mitigate many of the downsides described above that would discourage generic drugs from being manufactured in the first place. However, under the eyes of the law, the "Authorized Generic" is not necessarily considered a generic drug, as the manufacturer owns all of the patents and has already been certified to manufacture the drug. Thus, the 180-day exclusivity period is not entirely exclusive, though prices do tend to be kept a bit higher during this period than they otherwise would in a free-for-all.

As for the rest of your question, there's no real debate that American insurance policies are often incredibly idiosyncratic, and slow to adapt to changes. I used to have a policy where generics only cost $5 less than the retail brand; obviously, this virtually never actually covered the actual difference in cost, though I guess that it attempted to guide the consumer's hand in their behavior; it seems unlikely that this price differential was terribly effective. Your insurance company could also be waiting for the (possible?) 180-day exclusivity thing to run out before actually setting a policy for generic Concerta.

Although you're free to make decisions based on ethics, there may be non-public agreements between your insurer and pharmaceutical companies that are resulting in the name-brand and authorized generic being sold to the pharmacy at the exact same price. I have no idea if this actually happens, but it seems plausible. The world of healthcare financials is weird; don't assume that free-market economics are actually taking place.

I'm 99% sure that it's illegal to procure Schedule II drugs by mail. Call your doctor and/or insurance company to see if there's a way to avoid being hit with a copay every month, given that patients taking non-schedule-ii drugs can take advantage of that loophole to save a significant amount of money.

I believe that doctors are allowed to write a prescription for a 90-day supply of a Schedule II drug, although I'm not clear on the logistics of actually filling that prescription; it looks like you may need to visit the pharmacy every 30 days, and that the subsequent two visits are absolutely not to be referred to as "refills" (even though they seemingly are refills). My google-fu was failing me here; maybe someone else can clarify this...
posted by schmod at 11:16 PM on March 4, 2012 [2 favorites]

When we were insured by Cigna earlier this year, we were able to get generic Concerta (two 32-mg pills a day for my son) absolutely free of any copayment, ninety days' worth at a time, from the mail-order pharmacy. They really push the generics! Surely a better deal for us than for our insurers. Fortunately, it seems to be working just fine for my son.

It was a huge pain to get ADHD pills back when we thought you couldn't mail-order them. Every single month we had to pick up a new prescription for them. Fortunately, though, it turns out there's no problem with the standard mail-order pharmacy for these drugs, at least in Texas, though I did have to sign for delivery. This is completely legal and by-the-book, using the pediatrician's prescription and our regular mail-order pharmacy, nothing like ordering from another country or without a prescription. The one-month prescription has to be filled within a week of receipt, but the three-month prescription has much more leeway and was good for a full three weeks after the date on which the prescription was written.
posted by artistic verisimilitude at 7:37 AM on March 5, 2012

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