Generic Pharmaceutical Association Reports Record Cost Savings

A Generic Pharmaceutical Association (GPhA) report shows that generic drugs saved the US health system $239 billion in 2013, which is a 14% increase over cost savings achieved in 2012 and the largest annual savings to date. The report also calculates that generic medications saved a record of nearly $1.5 trillion over the most recent decade (2004-2013).

“It is clear that generics have played a critical part in lowering health cost projections," said Ralph G. Neas, president and CEO of the GPhA, in a press release. "This track record of savings is unparalleled, and the savings will grow substantially as we enter the era of biosimilars, the next frontier of generic industry innovation. With billions of dollars of savings at stake, this report is a clarion call to lawmakers, regulators, and all stakeholders: we must work together to sustain the success of generics today and pave the way for safe, affordable biologic therapies tomorrow.”

In recent years, spending on US federal healthcare programs has slowed sharply. In August 2014, the Congressional Budget Office changed its estimates for Medicare spending, projecting a drop of $49 billion (less than 1%) from 2015 and 2024, while Medicaid spending is expected to drop by $40 billion (approximately 1%) over the next decade. Generic drugs played a key role in the downturn of rising health costs, GPhA said in a press release. The sixth annual Generic Drug Savings in the US report also found that nervous system and cardiovascular treatments in the past 10 years account for 58% or $851 billion of cost savings.

All data were compiled by IMS Health on behalf of GPhA. The timing of the study release coincides with the 30th anniversary of the landmark Drug Price Competition and Patent Term Restoration Act (commonly known as the Hatch-Waxman Act), signed into law in September of 1984, which is widely credited with creating the modern generic-drug industry.

Source: GPhA