Insurers balk at pricey generic version of ancient GSK heart drug

The heart drug digoxin--a generic version of GlaxoSmithKline's ($GSK) Lanoxin--used to cost just pennies a pill, making it a prescription that insurance companies were more than happy to cover. Not anymore. The three companies that make generic digoxin have been increasing their prices, causing the cost of the drug to nearly double in the last year.

That's causing problems for patients and their doctors as some insurers now want them to pre-approve its use. Digoxin is a centuries-old drug that millions of Americans use every day to control abnormal heart rhythms, according to The New York Times. While the average price per month for the drug is still only about $50, the website GoodRx found that some pharmacies are charging as much as $1,000, according to the Times. That's causing copays to rise so much that some patients are calling their doctors to complain.

What's the problem? Often drug shortages cause prices to spike, but that's not the case with digoxin. In January, Switzerland's Covis began making an "authorized generic" of digoxin--a version that was sanctioned by GSK. Such authorized copies are often priced higher than other generics. So just before the launch, the other two makers of generic digoxin, Lannett and Global Pharmaceuticals, began boosting their prices, according to the Times.

Generic drugs have long been considered the white knights to combat skyrocketing health costs. In January, the Centers for Medicare and Medicaid Services (CMS) reported that for the fourth year in a row, the growth of healthcare spending was relatively modest, rising just 3.7% in 2012 to reach $2.8 trillion. Generic drugs comprised 77% of all prescriptions that year--up from 70% the year before--leading the report's authors to pinpoint generics as a major catalyst for controlling healthcare spending. By then, some of the biggest blockbusters of all time had gone generic, including Pfizer's ($PFE) Lipitor, Merck's ($MRK) Singulair, and Bristol-Myers Squibb ($BMY) and Sanofi's ($SNY) Plavix.

But lately consumers have been the victims of the generics industry's vagaries--and not just with digoxin. After the FDA banned products emerging from four manufacturing plants belonging to Indian generics giant Ranbaxy earlier this year, the company was unable to launch its cheap version of AstraZeneca's ($AZN) heartburn drug Nexium, which lost its patent protection in May. The manufacturing snafus have also delayed Ranbaxy's generic copies of Novartis' ($NVS) heart drug Diovan and Roche's ($RHHBY) antiviral Valcyte.

As for digoxin, rising prices continue to cause headaches for patients and doctors. Barry Lindenberg, a cardiologist in Schenectady, NY, told the Times that in January he received a three-page form from an insurance company demanding pre-approval to prescribe digoxin. He responded by writing on the form: "ARE YOU KIDDING ME?"

- read the NYT story (sub. req.)