Generic drugs saved $227B in 2015
Generic Pharmaceutical Association
Generic drugs saved Massachusetts $5.2 billion in medicine spending in 2015, according to the Generic Pharmaceutical Association.
While the cost of prescription drugs plagues healthcare policy makers working to curb spending, the savings generated by generic drugs have continued to grow, according to a recent report from the Generic Pharmaceutical Association.
The report, commissioned by the national trade group and authored by the QuintilesIMS Institute, found that generic forms of brand-name prescription drugs saved $227 billion on prescription drug spending in 2015. Annual savings have increased steadily since 2005, when generic drugs saved $53 billion.
While the majority of drugs prescribed in the U.S. are generic, at 89 percent, these medicines only account for 27 percent of medicine spending, according to the report. Conversely, brand-name drugs make up just 11 percent of prescriptions but account for 73 percent of medicine spending.
Chip Davis, president and CEO of the trade group representing U.S. generic drug makers, called generic drugs the foundation of any successful effort to lower health spending and increase patient access to affordable medicine.
Generic drugs are the active ingredients of brand-name drugs. Manufacturers give them their brand-names, and once patents expire, drug makers are allowed to make and sell them under their generic names without the associated research and development and advertising costs. This results in savings for consumers and insurance companies.
The report gives several examples of generic drugs that produce significant out-of-pocket savings for consumers. For instance, the cholesterol drug Crestor costs Medicare patients $45.39 per month, while its generic counterpart, Atorvastatin, costs $4.88 per month.
State and national policy makers have been vocal about the need to drive down the cost of prescription drugs. Earlier this month, Massachusetts Attorney General Maura Healey underscored the importance of fostering competition in the prescription drug industry, including the availability of generic medicine.
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