By Douglas Hoey, RPh, MBA
Usually the introduction of a generic drug is a good thing for most health care stakeholders. Lower prices from non-brand name drugs benefit patients and health plan sponsors, lead to greater availability for patients and, subsequently, better health outcomes. Strangely, that hasn’t been the case with Ranbaxy’s handling of valacyclovir, a generic equivalent to Valtrex originally introduced by GlaxoSmithKline.
Valtrex is a medicine commonly prescribed to treat herpes, chickenpox in children, and shingles in seniors, among other purposes. Ranbaxy Laboratories, Ltd. was the first to introduce a generic equivalent, valacyclovir, into the U.S. Nov. 25, 2009, according to Dow Jones, giving it 180 days exclusivity before competitors can offer rival generics.
In December, NCPA began hearing concerns from members about the lack of valacyclovir’s availability. Its scarcity prompted independent community pharmacists to speculate that Ranbaxy was intentionally cutting their pharmacies and wholesalers out and going straight to large, national chains. Further complicating matters, acyclovir, a similar medication, is also in short supply.
NCPA wrote to Ranbaxy officials last Dec. 17, to protest any effort to put large chains first and freeze out independents. When that happens, patients lose, the letter noted. Independent community pharmacies “serve a disproportionate share of underserved patients—twice as many Medicare and Medicaid patients as the large publicly traded chains–so restricting product access to them is especially harmful to this more vulnerable population.
“We urge you to open up your channels of distribution to increase the availability of valacyclovir to millions of Americans in underserved areas to help pediatric children with chickenpox, seniors with shingles, and others needing the medication to treat their condition,” the letter concluded.
At that time, pharmacy benefit managers were still covering the name brand drug (Valtrex) when a generic wasn’t available and without requiring a prior authorization. This month that’s changing and some public payers, like TRICARE and Medicaid, may not cover name brand drugs if a generic is on the market.
Several wholesalers of varying size told NCPA they don’t have access to valacyclovir at all. So it’s possible that Ranbaxy has, in fact, struck direct-to-pharmacy deals with some large chains. The company employed the same strategy for selling its generic version of the antibiotic Augmentin.
Certainly, Ranbaxy is no stranger to controversy. In late December, the U.S. Food and Drug Administration chided the company over its manufacturing practices and, in 2008, the agency blocked Ranbaxy from importing 30 different generic drugs.
The supply problems have only grown worse. New York City pharmacies in particular report no access to valacyclovir. In Vermont, a pharmacist couldn’t refill a Valtrex prescription for a Medicaid patient. Another Vermont pharmacist told us, “We have been trying to purchase valacyclovir, new generic of Valtrex. My purchase agent in my pharmacy told me that contacts of hers at various wholesalers have told her that Ranbaxy has decided to only sell valacyclovir to chain drug stores. Insurance companies are now demanding that we dispense the generic since it is available. This isn’t right!”
We couldn’t agree more. Some Virginia and Pennsylvania pharmacists also echoed the Vermonters’ experience.
Since Ranbaxy had not responded to NCPA’s letter or taken any steps even to explain the supply shortage, we reached out to the manufacturer again late last week. On Monday, our friends at the Pharmacists Society of the State of New York, Inc. (PSSNY) also contacted Ranbaxy.
PSSNY’s letter says Ranbaxy’s action “poses an access issue to thousands of patients in NYS who live in our very rural and inner city neighborhoods where chain pharmacies DO NOT EXIST.” The group threatened to seek Ranbaxy’s expulsion from the state’s Medicaid program as well as filing a “restraint of trade” complaint with the Federal Trade Commission.
Late yesterday, Ranbaxy belatedly responded to NCPA’s letters. The company cited a shortage of raw materials, including the active pharmaceutical ingredient, as the primary factor behind its inability to meet its customers’ needs during this exclusivity period. Ranbaxy’s response did not address whether the company struck a direct-to-large-chain distribution deal. Its answers also indicated a lack of awareness that, for some U.S. patients, an independent community pharmacy is the only health care provider for many miles around.
If these patients’ independent pharmacies aren’t allowed to provide the drug, then the patient has no alternative to get timely access to treatment for their condition. The situation presents an untenable health problem for patients needing this medication. NCPA is looking at several different remedies to address this problem before more patients are affected and pharmacies are forced to turn patients away.