As baby boomers grow older and live longer – with the youngest members of that generation having already passed the half-century mark – perhaps it isn’t surprising that prescription drug use continues to rise.

But of increasing concern to a growing number of healthcare professionals is the skyrocketing cost of prescription drugs, both name brand and generic. In fact, one Mid-South doctor – Dow Stough, MD, a practicing dermatologist for more than 20 years – has actively begun urging lawmakers and drug manufacturers to make medications more affordable.

Stough, who has private practices in Hot Springs, Arkansas, and Dallas, Texas, also is the founder and medical director of Hot Springs-based Burke Pharmaceutical Research. Founded in 2000, Burke Pharmaceutical has grown from a small clinical trials unit within a dermatology practice to what its website says is “a national leader in clinical trials of skin disease.”

“With the increase in price of generic and trade-name drugs, everyone is alarmed,” said Stough, who completed his internship at Baptist Memorial Hospital-Memphis. “Doctors, patients, politicians, the media – everyone is looking into this situation to see what’s going on.”

What's going on is that patients are spending more – much more – on prescriptions.

According to Truveris, a firm that analyzes prescription drug pricing, last year patients spent nearly 11 percent more for name brand and generic drugs than they did in 2013. More recently, a study by the IMS Institute for Healthcare Informatics showed an even higher increase, indicating that spending on medicine in 2014 jumped 13.1 percent over 2013 levels, the highest rate since 2001 when spending growth jumped to 17 percent.

Key findings of the IMS report show:

• Spending on new brands increasedby $20.2 billion in 2014, triple the previous level.
• Over 161,000 patients started treatmentfor hepatitis C in 2014, more than four times the previous peak, and nearly 10 times more than in the previous year.
• Specialty medicines now account for one-third of spending, driven by a wave of recent innovations in treatment for autoimmune diseases, hepatitis C and cancer.
• Specialty medicine spending increased by 26.5 percent to $124.1 billionin 2014.
• Increasing numbers of launches and growth in spending on specialty productsin 2014 were driven by the growing research and development focus on specialty medicines over the past decade

The result was nearly $375 billion spent on prescription drugs in 2014. And with more brand-name drugs retaining their patents, fewer generic treatments were available.

 In an interview with the Wall Street Journal, Murray Aitken, executive director of the IMS Institute, acknowledged, “It was a truly remarkable year. We had an unusual confluence of events.”

With fewer generics available in 2014, those on the market cost 5 percent more than a year earlier. And with a complex system from development to FDA approval to distribution, drug makers are seeing thinner profit margins, explained Stough, who also founded Burke Pharmaceutical research facility.

“The Unites States government has put in regulations that make competition very difficult, and now companies aren’t in it to bring low-cost medicine to patients,” Stough said. “The moment a trade name goes on field, within four months generic trials are going on. The patent life is too short, and the FDA development cost is too high.

“The government allows generics to come on the field before patents run out, and the result is that during the last 20 years, generic drugs in the United States have increased from under 20 percent to 80 percent of all prescriptions.”

Stough maintains that the decreased barriers to generic drug development have allowed generic companies to flood the market with no-name drugs, which, in turn, has resulted in shrinking profit margins for drug developers.

“Normal market forces are not in play, and that’s the problem,” he said. “There’s not enough competition, and filing fees are too high for patents. For the pharmaceutical industry, as prices increase, market share drops, but revenue remains the same.”

As drug prices continue to rise, consumers are the ones paying the cost, Stough said. And while the pricing situation is complex, he does not believe a conspiracy exists between drug developers, lawmakers and medical personnel.

“This is a complicated system, created over years by a series of actions that were intended to drive down drug costs, but had an alternate effect,” Stough said. “Am I an expert? No, but I understand more than I did before I started  researching this, and while 99 percent of doctors may throw up their hands and think there’s a smoking gun, that’s simply not true. There are not five guys in a back room somewhere manipulating the price of drugs.”

Stough, who is in discussions with local medical organizations to present a seminar in Memphis later this year on drug costs, acknowledges that there is no quick fix to the problem. But he does believe that by working together, drug developers, insurers and government officials can effect change.

For starters, Stough thinks fees for FDA approval should be decreased. And patients should be allowed to purchase drugs outside their insurance network if the prescriptions are cheaper elsewhere. And that includes outside the United States.

“We should open up the distribution channels to make Canadian drugs readily available and easily obtainable in the United States,” Stough said. “There are plenty of good foreign drugs, many of the same ones we have here, but under different names, that are

incredibly cheaper than what’s on the market in the United States. Patients should absolutely have access to those more-affordable prescriptions.”

Looking ahead, it’s possible that spending may dip in the next few years as more trade-name drugs lose patent protection and generics arrive on the field, Stough said. But parties involved in all facets of drug development, regulation and distribution must work together to generate benefits for consumers.

“America has the highest prices for prescriptions in the world, and that’s ridiculous,” Stough said. “We created this mess, and the question before us now is are we going to do what it takes to fix it?”

RELATED LINKS:

Stough Clinic, www.singlehair.com

IMS Institute for Healthcare Informatics, www.imshealth.com/institute

Truveris, www.truveris.com