FDA Approves Generic Equivalents of Kadian®

Medicare Set-Aside Blog on December 7, 2011 | Posted by


In November 2011, the FDA approved generic equivalents of the brand name product Kadian®, which is an extended-release morphine product manufactured by Actavis Elizabeth LLC. While the commercial introduction of a new generic formulation is perhaps always noteworthy, the approval of a therapeutic equivalent to Kadian® is particularly noteworthy because it is one of the most costly long-acting narcotic products on the market. A schedule II controlled substance indicated for moderate to severe pain when a continuous, around-the-clock opioid analgesic is needed for an extended period of time, Kadian® is available in a wide range of capsule strengths ranging from 10mg to 200mg. The AWPs for Kadian® range from $5.26 to $42.24 per capsule. To highlight the potential cost savings associated with a conversion to the generic equivalent for Kadian®, consider the following scenario for a workers’ compensation claimant prescribed Kadian ® 300mg per day with a life expectancy of 30 years.


 


Scenario #1: Brand Name Kadian® 300mg per day


100mg capsule (manufactured by Actavis, NDC 46987-0324-11) with AWP of $21.1193 per capsule


 Annual cost of regimen = $22,808.84


Cost of regimen over claimant’s life expectancy = $684,265.20


 


Scenario #2: Conversion to Generic Morphine Sulfate Extended-Release 300mg per day


100mg capsule (manufactured by Watson Pharma, NDC 00591-3453-01) with AWP of $18.2471 per capsule


Annual cost of regimen = $19,706.87


Cost of regimen over claimant’s life expectancy = $591,206.10


 


Cost Savings due to conversion = $93,059.10


 


In addition to the scenario depicted above, there two additional points to keep in mind. First, long-acting opioid therapy is generally lifelong in nature and patients generally develop tolerance to the analgesic effects of opioids. Very often, this translates into a potentially endless series of dose increases for drugs like Kadian®. Therefore, the potential cost savings for any workers’ compensation claimant is much greater than the cost savings associated with the scenario above, when taking the potential for future dose increases into consideration. Secondly, at the present time there are only two manufacturers of generic versions of Kadian®. As more generic manufacturers enter the market, competition will force AWPs downward. It is difficult to quantify the potential  impact of future price decreases for these products, but it is almost certainly greater than the example above.