Generics improve access to care, combat rising costs

Few factors have played as significant a role in helping curb healthcare costs over the past decade as generic drugs, a report released by the Generic Pharmaceutical Association showed.

(To view the full Category Review, click here.)



The report, prepared for GPhA for the seventh straight year by the IMS Institute for Healthcare Informatics, shows that since 2005 generics have saved patients $1.68 trillion. In 2014 alone, the report noted, generic drugs trimmed more than $254 billion from healthcare spending. Slightly more than one-third of those savings were from generics taken by people ages 65 years and older.



“This new report reinforces that generic drugs are a critical part of any solution to rising costs for patients, payers and for the entire healthcare system,” GPhA president and CEO Chip Davis said. “Safe, effective and more affordable generic medicines mean increased access for the millions who rely on these life-saving therapies.”



According to the IMS report, 88% of all prescriptions in the United States are filled with generics. However, these lower-cost alternatives to branded drugs account for only 28% of pharmaceutical spending.



Davis said these savings are particularly relevant given lawmakers’ efforts to lower the costs of federal and state health programs.



“As policy-makers look for solutions to rising healthcare costs, we look forward to working with Congress, the FDA, the patient and provider communities, and stakeholders from all corners of the supply chain to embrace policies that support generic manufacturers’ ability to provide this remarkable level of savings,” he said.



The savings that generics can provide federal and state programs are already apparent, the report found, noting that Medicare saved $76.1 billion in 2014 by using generics. That figure, Davis said, translates into an average of $1,923 for every person enrolled in the program. For the joint state and federal Medicaid program, the 2014 savings amounted to $33.5 billion, or $479 per enrollee.



The IMS report also noted that generics provided significant savings across a wide range of therapeutic classes. For example, it said patients saved $38 billion by using generics to treat mental health conditions, while $27.9 billion were saved with generic hypertension drugs and $26.8 billion were trimmed from spending on medications to manage or lower cholesterol levels.



“It is evident that annual spending on many medication classes would soar in the absence of generic competition,” said IMS Institute executive director Murray Aiken. “This underscores the need to sustain the generic drug industry and actively pursue policies that support or grow, rather than undermine, patient and health system savings from generic drugs.”



This year’s report marked the first time that IMS has included state-by-state savings from generics in its GPhA report. Generics had the greatest impact on per capita Medicaid spending in Kentucky, West Virginia, Maine, Rhode Island and Massachusetts.