Generics Generated Over $200 Billion in Savings in 2017

As the nation grapples with ways to lower healthcare costs, access to generics plays a large role in saving patients, and the health system, money at the pharmacy counter. In 2017 alone, generics generated $265 billion in savings, according to a report from the Association for Accessible Medicines.

Savings for Medicare and Medicaid alone totaled $82.7 billion and $40.6 billion, respectively.

In 2017, generics accounted for 9 of every 10 prescriptions filled in the United States, and 93% of these prescriptions were filled at $20 or less. While brand name drugs accounted for just 10% of prescriptions, they were responsible for 77% of prescription spending. Due to high costs, those prescribed brand name drugs were 2 to 3 times more likely to not pick up their prescription after calling it in.

Looking by drug class, the biggest savings were seen in mental health, which saved $42 billion from generic drugs, followed by $34 billion for cholesterol and $31 billion for hypertension. By patient condition, savings totaled $48 billion for mental illness, $47 billion for heart disease, and $17 billion for epilepsy.

Savings by state averaged $5.2 billion, ranging from $354 million in Alaska to $23.2 billion in California.

In recent years, the gradual introduction of biosimilars to the market has provided another outlet for prescription cost savings. In the 8 years since the passage of the Biologics Price Competition and Innovation Act (BPCIA), 12 biosimilars have been approved, most recently a second biosimilar to Amgen’s reference filgrastim (Neupogen), used to treat neutropenia.

With biologics often coming with hefty price tags, “biosimilars have the potential to improve the quality of life for American patients while at the same time saving the health system billions of dollars each year—provided that the right policies are in place to nurture a robust marketplace,” states the report.

However, despite 12 FDA approvals, just 4 biosimilars have entered the US market, as others are tied up in pending litigation. Under the BPCIA, drug innovators are provided 12 years of market exclusivity to make up for research and development costs. And even when that 12-year period has ended, biosimilars still have hurdles to climb.

The report gave the example of adalimumab (Humira), used to treat rheumatoid arthritis and Crohn disease, which comes with a list price of $38,000. Despite its primary patent being expired, the 2 FDA-approved biosimilars to the drug are being blocked from entering the market through the patent process. In the meantime, the price of the reference Humira continues to rise, increasing 122% over the past 5 years.

To learn more about biosimilars, visit The Center for Biosimilars^®, a sister site of The American Journal of Managed Care^®.