Off Patent Drugs

When a new drug is developed it is usually given a patent by the US Patent Trademark Office. This patent is generally for a 20 year period, during which time the patent holder is in control of who may manufacture, market and distribute the drug as well as the pricing of the drug.

The patent is generally applied for and granted during early stages of drug trials and so the drug may not be approved by the Federal Drug Administration (FDA) for a number of years after the initial patent date. In that situation a patent extension of up to 5 years could be applied for.

The US Patent Trademark Office will grant patent extensions that give the drug manufacturer a maximum of 14 years to market a drug.

Once a patent expires, other manufacturers may apply to the FDA to market a similar medication using the once protected formulation.  These medications are called “generics”.

This is pretty big news at the moment as one of the most lucrative drugs ever produced is about to have its patent expire. The drug in question is Lipitor, which has had sales in excess of $10 billion per year for the past few years.  To call it a blockbuster is an understatement.  It is a pill taken by millions of Americans every day to help control cholesterol.  The cost per month has been in the $120 ~ $150 range for those people who are not fortunate enough to have prescription drug coverage.

What does this mean for you the consumer when a drug like Lipitor does come off patent?

It can mean drastically lower costs.

Here are a few examples of other drugs that have recently had their patents expire and are now available in a generic version.  All prices were obtained from the wonderful Medicare web-site located at

Xalatan which is a common eye drop used for those with glaucoma has a price of around $95 per month while the generic version, Latanoprost is available for $10 per month.

Aricept which is used for memory loss was priced at $275 per month and the generic called Donepezil is only $54.

Flomax which is used for the treatment of enlarged prostate is around $135 per month with the generic, Tamsulosin costing only $20 or so. I always thought that Flomax deserved a prize for being the most appropriately named medication of all time.

The above examples are just a few that show prices can drop 80% or so when a generic version becomes available.

However, this does not mean that the brand name drug will necessarily drop in price.  The prices I quoted for the above three examples are the prices they are currently charging and I am unsure of what their prices were before the generic versions became available.

What it does mean is that you, as a consumer are being given an opportunity to try a generic drug, which has to meet all the same stringent FDA rules and guidelines. If you find you have no adverse side effects you can end up saving significant amounts of money each year.

Please do not worry about the pharmaceutical companies making profits as a new cancer treatment drug was recently approved by the FDA and it has a monthly cost of $9,600 or over $115,000 for a years supply.

Prescription drugs are on my mind constantly at the moment as we have the fast approaching Medicare Part D Annual Enrollment Period starting in less than 45 days on October 15th and running through December 7th.

Plan designs and costs are not currently available but will be around October 1st, and if you are currently enrolled in a plan please keep your eyes open for a very important package of information from your current plan.  This package is your Annual Notice Of Change (ANOC) and it contains all the details of your plan for 2012.

This package needs to be reviewed closely to ensure that your current plan will still be adequate for your needs for 2012.  It will show you what your premiums, co-pays and deductibles will be, but more importantly it will provide a formulary (list of drugs) that you should review to ensure all your medications will be covered.

But I digress as that will be a subject that I will cover in more detail in next month’s column.