On August 25, 2023, the Office of Generic Drugs approved a total of 14 different applications for lisdexamfetamine dimesylate products after the expiration of a patent on August 24, 2023. (This is the first time in a long while where I remember this many applications being approved on a single day.) While this is good news for patients that have experienced a shortage situation with the brand name drug Vyvanse, it could signal a race to the bottom of pricing for the generic products that have just been approved.
The issue of drug shortages has been linked to low prices for generic drug products and their razor-thin margins. Often when this many players enter a market after patent expiry, prices of the generic can fall fast, with some historically falling to 90% of brand price within 30 days. Will lisdexamfetamine dimesylate products have the same fate? And if so, is it possible that some holders of approved applications seeing the writing on the wall won’t even enter the market, or will others be forced to stop selling the drug only months after approval, if prices drop to a level where it is no longer profitable for them to manufacture and sell the drug?
Many articles have pointed to drug pricing of generics and the downward price pressure coming from insurance companies, wholesalers, and pharmacy benefit managers as one factor in causing drug shortages. A recent article in The Hill (here) mentions these downward price pressures and quotes Marta Wosińska, health economist and senior scholar at the Brookings Schaeffer Initiative on Health Policy, as noting the US is “paying a price for its successful generic medication framework, which places a ‘tremendous’ degree of downward pressure on manufacturers to sell at lower prices”. She notes that one failure in the supply chain system is the “inability of the market to observe and reward quality.”
It will be very interesting to observe what happens with the market dynamics of lisdexamfetamine dimesylate over the next few years. Will we be observing future drug shortages of this product once the price declines? Will quality be a factor that defines the market winners? Or will we be right back at ground zero? Only time will tell.
