AAM: Generics saved $253B in 2016, $1.7T in past decade
WASHINGTON — Generics continue to play a key role in the healthcare system, according to the the Association for Accessible Medicines’ recently released ninth annual Generic Access and Savings in the U.S. report, compiled by the QuintilesIMS Institute for the AAM (formerly the Generic Pharmaceutical Association). The report highlights that generic drugs saved the healthcare system $253 billion in 201, bringing 10-year savings to $1.67 trillion.
The report also highlights that Medicare saved roughly $1,883 per enrollee ($77 billion and Medicaid saved $37.9 billion, or $512 per enrollee, as a result of using generics. On a state-by-state business, the therapeutic categories that saw the most savings were mental health, with $44 billion in savings; hypertension, which saved $29 billion; and cholesterol, which saw $28 billion in savings.
The costs savings of generics — which made up 89% of dispensed U.S. prescriptions in 2016 but only 26% of total drug costs — as well as biosimilars, the AAM said, act as a driver for access to treatment for patients.
“Access is a value we uphold at every opportunity,” GPhA president and CEO Chip Davis said. “All of our work, from promoting marketplace competition to advocating strategic enhancement of the Food and Drug Administration’s generic drug and biosimilar approval process, comes down to the promise of putting treatments within the reach of patients.”
The report also includes data from researchers who looked into abandonment behaviors of patients with regard to both branded and generic products, finding that new patient’s abandon branded drugs at a 266% higher rate than they do generic drugs. And while branded products make up 20% of approved claims, 40% of all abandoned claims are for new patients.
When patients abandon a branded medication, 14% switch to generic within 30 days of initial approval. The report noted that copays play a key role in abandonment, and highlighted that 90% of generic copays are less than $20, while only 39% of branded copays are lower than $20. More than their impact on patients having access to medication, the report noted that ensuring patient access to generics can also have positive effects on the industry.
“The savings created by generic copies free up resources to invest in new treatments — creating headroom for innovation — and resulting in significant progress against some of the most costly and challenging diseases,” the Pharmaceutical Research and Manufacturers of America said.
In order to continue the savings from generics, AAM in the report outlined it’s five-point plan — promoting access to quality generics, creating policies recognizing the different dynamics of branded and generics markets, ensuring an intellectual property framework that balances innovation and competition need, ending practices that delay generics development, and the increase in use of affordable generics among all patient populations.
“Affordable medicines are inherently more accessible,” David said. “Every dollar saved at the pharmacy counter is a dollar that can be spent on life’s essentials and other pursuits — or put away for future use.”
To read the full report, click here.