Regulatory Focus™ > News Articles > 2019 > 1 > Mail Order Pharmacies Can Lessen Generic Usage, Study Finds

Mail Order Pharmacies Can Lessen Generic Usage, Study Finds

Posted 17 January 2019 | By Zachary Brennan 

Mail Order Pharmacies Can Lessen Generic Usage, Study Finds

Although nearly 90% of all drugs dispensed in the US are now generic drugs, a new study published in Therapeutic Innovation & Regulatory Science explores the determinants of generic substitution across therapeutic classes and found that in five of eight studied classes, patients using a mail order pharmacy had significantly less generic substitution than patients filling at retail pharmacies.

The research, funded by a grant from the US Food and Drug Administration, said that the use of a mail order pharmacy rather than a retail pharmacy and less generic substitution “was most extreme” for stimulant and thyroid hormone drugs, but also for anticoagulants, ophthalmic drugs and estrogens.

So why is there an association between the use of mail order pharmacies and less generic substitution?

The researchers from Johns Hopkins University, the Palo Alto Medical Foundation Research Institute and the US Food and Drug Administration’s Office of Generic Drugs said part of the issue is that pharmacy benefit managers (PBMs) can negotiate lower prices on brand products for the large mail order pharmacies (e.g., CVS Caremark) and the very large retail chains (e.g., Walgreens) because they are such large purchasers.

“The same negotiations for generic products are often done by the pharmacies, rather than the PBM, since there are often, although certainly not always, multiple sources of product and the pharmacies can choose between manufacturers,” the study says.

Mail order pharmacies also receive rebates from manufacturers based on their ability to affect a drug’s market share for a large number of consumers.
 
“Additionally, a mail order pharmacy is sometimes the ‘preferred pharmacy’ for a prescription drug plan and is able to dispense branded drugs more cheaply because of the negotiation of the PBM on behalf of the drug plan,” the researchers write.
 
The researchers also found that for two additional classes of drugs studied, there is no relationship between pharmacy type and generic use. In addition, state substitution laws and patient consent laws were found to be “largely inconsequential regarding generic substitution.”
 
In the study’s conclusion, the researchers said that mail order pharmacies, as often required by pharmacy benefits managers, “lessen generic use for many classes. These pharmacies may require additional regulatory oversight if this adversely impacts patients.” The authors also called for further investigation into the impact of mail order pharmacies and PBMs on generic drug usage.
 
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