Record $254 billion in health savings attributed to use of generics in 2014
WASHINGTON — Few factors have played as significant a role in helping curb health care costs over the past decade as generic drugs, a report released Tuesday by the Generic Pharmaceutical Association shows.
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 notes, generic drugs trimmed more than $254 billion from health care spending. Slightly more than a third of those savings were from generics taken by people over 65.
“This new report reinforces that generic drugs are a critical part of any solution to rising costs for patients, payers and for the entire health care system,” GPhA president and chief executive officer 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 find ways to lower the costs of federal and state health programs. GPhA, he stressed, would ensure that the IMS findings were readily available to lawmakers and regulators as they continue to craft laws and policies to keep health care spending in check.
“As policymakers look for solutions to rising health care 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 notes that generics provided significant savings across a wide range of therapeutic classes. For example, it says, 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,” one of the report's authors, IMS Institute executive director Murray Aiken, said. “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. While the nation's largest states — New York, California and Texas — saved the most overall, generics had the greatest impact on per capita Medicaid spending in Kentucky, West Virginia, Maine, Rhode Island and Massachusetts.
“Generic drug manufacturers can proudly point to a legacy of savings and access that brings expensive treatments within reach for millions of people.” the report said. “It is important to note that savings are growing and are expected to continue to grow.”