Generic Drugs Saved Consumers USD 193 Billion

Generic drugs have saved consumers, state and federal governments, and healthcare systems more than USD one billion every second day in 2011, according to a new report.

The Generic Drug Savings Analysis report, conducted by IMS Health (Parsippany, NJ, USA), and funded by the Generic Pharmaceutical Association (GPhA; Washington DC, USA) spotlights the savings in an effort to encourage policymakers to protect and spur use of their products through an upcoming critical US federal budgetary debate.

Among the findings of the report are that generic drugs have saved the US healthcare system roughly USD 1.07 trillion from 2002 to 2011; savings in 2011 increased 22% over the prior year, making it the largest year-over-year increase since 1998. Savings could also continue to skyrocket, since certain major drugs such as cholesterol drug atorvastatin (Lipitor) and antipsychotic olanzapine (Zyprexa) only became generic late in 2011, and other high-profile drugs such as the blood thinner clopidogrel (Plavix) continue to have generic versions.

The report also found that the greatest one-year savings growth rate came from cancer treatments, which produced USD 10 billion in savings in 2011, more than three times higher than the USD 3 billion saved in 2010. In addition, nearly 80% of the four billion prescriptions written in the US in 2011 were dispensed using safe and effective generic versions of their brand name counterpart drugs.

The report also highlights the effectiveness of the Hatch-Waxman Act, a 1984 legislation largely credited with creating the modern-day generic drug industry. The act creates incentives for companies to file generic drug applications with the US Food and Drug Administration (FDA) sooner, by giving 180-day marketing exclusivity to the first company that files. However, brand drug supporters say the incentives provided in Hatch-Waxman have worked too well and have harmed the innovation of new drugs by stifling company profits and, in turn, new drug development.

As a result, a Health Affairs report from November 2011 called on the US Congress to review the balance of incentives for brand-name and generic drug development. The generic industry claims that as unnecessary, since more new drugs were developed in 2011 than in any year in the past decade.

Related Links:
IMS Health
Generic Pharmaceutical Association