Affordable Medicines Utilization Act of 2011 encourages use of generic drugs

WASHINGTON — New bipartisan legislation introduced to the Senate last week seeks to offer states incentives to use generic drugs by allowing states to temporarily keep a portion of the savings.

Senators Scott Brown, R-Mass.; Ron Wyden, D-Ore.; and John McCain, R-Ariz., introduced the Affordable Medicines Utilization Act of 2011, saying that the bill would encourage states to take advantage of cost-saving generic drugs.

“With our nation in a financial crisis and as federal and state healthcare expenditures continue to rise, we must ensure that our healthcare programs are efficiently managed,” McCain said. “A recent study found that the federal/state Medicaid program potentially overspends by more than $300 million per year on brand-name drugs when a cheaper generic drug equivalent is available. This bipartisan proposal incentivizes state Medicaid programs to substitute generics for more expensive brand-name drugs, introducing real competition for reimbursement dollars and saving taxpayers’ hard-earned money.”

The bipartisan legislation has received endorsement from the National Association of Chain Drug Stores, stating in a letter that, “The Affordable Medicines Utilization Act of 2011 will provide incentives that will encourage state programs to efficiently use their healthcare dollars through increased use of more cost-efficient generic drugs while at the same time generating savings for not only the state but for the patient as well,” NACDS wrote.

NACDS did, however, caution against "evaluating spending on prescription drugs in a vacuum."