Dispensing generic versions of brand-name prescription drugs saved the U.S. health care system $139.6 billion in 2009 and more than $824 billion over the past decade, according to an IMS Health study commissioned by Generic Pharmaceutical Association (GPhA).


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GPhA: Generics saved U.S. nearly $140 billion last year

July 27th, 2010

WASHINGTON – Dispensing generic versions of brand-name prescription drugs saved the U.S. health care system $139.6 billion in 2009 and more than $824 billion over the past decade, according to an IMS Health study commissioned by Generic Pharmaceutical Association (GPhA).

For the study, IMS Health provided and analyzed brand and generic prescription drug sales data for the 10-year period of 2000 to 2009, GPhA said.

"Generic pharmaceuticals continue to be one of the best buys in health care," GPhA chairman Paul Bisaro said in a statement. "While prices for name-brand prescriptions continue to rise year after year, generic prices have remained generally unchanged and in some cases have even declined as more competition enters the market. It is clear from the IMS analysis that increasing access to generics would significantly reduce the nation’s overall health care bill."

GPhA noted that the new analysis builds on a study released in May 2009 showing that the generic drug use saved the U.S. health care system nearly $750 billion from 1999 to 2008. The association said the new analysis is key this year because it spotlights the correlation between increased savings and greater use of generic pharmaceuticals at a time when regulators are implementing new health care reform laws and Congress continues to pursue savings in health care spending.

"This new analysis shows beyond a doubt that generic use is a proven way of bending the health cost curve downward," Bisaro explained. "Policies that encourage greater use of generic medicines can help states afford the cost of implementing expanded Medicaid coverage under new health care reform laws. In fact, data from the Centers for Medicare and Medicaid Services show that each two percentage point increase in generic use in Medicaid saves the system an additional $1 billion annually."

The high cost of prescription drugs has forced many Americans to make hard choices, according to Sen. Debbie Stabenow (D., Mich.).

"Too many families across the country are faced with the decision of whether to put food on the table or pay for their medication," Stabenow said in a statement released by GPhA. "This study confirms what we already know: Generic drugs will lower health care costs for families. I was pleased to author a provision in the new health care law to give seniors enrolled in Medicare Part D more opportunities to sample affordable, generic drugs free of charge. I will continue fighting to give consumers more access to safe and effective generic drugs."

GPhA added that the study's findings suggest that, going forward, greater savings could be achieved through the implementation of such initiatives as increasing funding of the Food and Drug Administration's Office of Generic Drugs to ensure the timely review and approval of new generic pharmaceuticals; eliminating "evergreening' of biologic drug patents to facilitate access to more affordable generic versions of lifesaving biologic medicines; and ensuring access to generics by continuing to allow generic manufacturers to settle patent challenges and bring generics to market sooner.

"Millions of Americans suffer from diseases — like cancer, Alzheimer’s, arthritis and multiple sclerosis — that require the use of expensive biologic drugs to treat. We all know that generic drugs can help Americans save money at the pharmacy counter. But what today's report from IMS Health makes crystal clear is that generic drugs have saved the U.S. health care system billions of dollars each year," Sen. Sherrod Brown (D., Ohio) commented. "If we were able to offer generic alternatives to expensive biologic drugs, these savings would multiply exponentially. That’s why I'll continue to fight to ensure generic alternatives to biologic drugs are available to consumers as quickly as possible. Patients and taxpayers simply cannot afford needless delays in access to affordable medicines."

GPhA reported that three-fourths of all prescriptions dispensed in the United States are now filled using generics, but they account for only 22% of the total dollars spent on prescription drugs.

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