Generic drugs in the US are too cheap to be sustainable, experts say

Generic drugs are the singularity of American healthcare – they are too cheap. And it’s driving some manufacturers out of business altogether.

Drug prices regularly sparks recrimination and outrage on Capitol Hill, such as a recently announced investigation by Senate Democrats and Bernie Sanders into the price of albuterol inhalers.

“There is no rational reason, other than greed, as to why GlaxoSmithKline charges $319 for Advair HFA in the United States, but just $26 for the same inhaler in the United Kingdom,” Sanders said in a statement.

Americans pay on average 2.5 times more for prescription drugs than other wealthy, developed nations, according to a recent Rand Corporation report. But averages hide important details. In this case, they shield the wide disparity between brand-name drugs and generics.

Patent-protected drugs drive most drug spending and cost $20 per day on average. But generic drugs are actually a little cheaper in the US than in other nations. And, in the opinion of many experts, they are too cheap to be sustainable.

“It’s great to keep costs down and keep [insurance] premiums down,” said Inmaculata Hernandez, a professor at the University of California San Diego Skaggs School of Pharmacology, an expert on pharmacy policy. “But we’ve seen it’s just too low for manufacturers to have sufficient incentives to manufacture drugs.”

Recent shortages have been announced in rolling headlines, and cancer drugs in particular have caught the attention of Capitol Hill. Methotrexate injections for severe autoimmune disease and cancers are in shortage. So is fludarabine, a drug oncologists have long depended on and which is now important in CAR T-cell treatment, the pioneering technology that teaches the human immune