GPhA: Generic medicines play critical role in holding down healthcare costs
WASHINGTON — The Generic Pharmaceutical Association on Thursday emphasized the savings generic medicines bring to the table in light of rising brand prices.
“Generic medicines are a critical part of system-wide efforts to hold down healthcare costs," stated Ralph Neas, president and CEO GPha. "Indeed, the world’s leading healthcare analytics firm, IMS Institute for Healthcare Informatics, found that generics saved $239 billion in 2013, a 14% increase in savings from 2012, and more than $1.46 trillion over the recent decade," he noted. "Further, the Express Scripts 2013 Drug Trend Report issued in 2014 shows that since 2008, the price of brand drugs has almost doubled, but the price of generic drugs has been cut roughly in half. Generic manufacturers can proudly point to a legacy of savings and access that will continue to bring expensive treatments within reach for millions of people."
GPhA issued the statement in light of examples cited by the Healthcare Supply Chain Association on recent purchases by group purchasing organizations that focused on a handful of generic drugs in a marketplace of more than 12,000 safe, affordable generic medicines. "In fact, thousands of generics have seen significant price erosion over time due to the competitive nature of the marketplace," Neas noted. "One such example is that of Lipitor — for which generics have saved all involved an estimated $7 billion per year. In addition, many generic prices are so low that thousands of stores across the country offer them to consumers for $4 or even for free."
To continue to save American patients and the healthcare system trillions of dollars in drug costs, GPhA believes that policymakers should take the following key steps to increase generic competition:
First, in partnership with the industry, Congress should encourage the timely FDA review of the more than 3,000 generic drug applications that have been filed with the agency. Once those are approved, consumers will have more options than ever, and that will help drive down prices;
Second, Congress should review the abuse of programs designed for protecting patient safety, such as REMS, that some brand companies are misusing as a way to keep generics out of the market. This practice lowers competition and keeps prices high. A recent study by Matrix Global Advisors estimates that countering this misuse could save the health system $5.4 billion; and
Finally, Congress should encourage the FDA to increase competition for cutting-edge biologics by enacting regulations for biosimilar approvals and supporting a naming policy that encourages competition from safe, more affordable biosimilar medicines.
"Taken together, these policies would provide American consumers with more choices, greater access to medicines and billions of dollars in increased generic savings," Neas said.