GPhA report says generics key to reining in health care costs

WASHINGTON — Annual health care savings from generic prescription drugs rose nearly 10% last year to $227 billion, according to the Generic Pharmaceutical Association (GPhA).

GPhA’s 2016 Generic Drug Savings and Access in the United States report, released Wednesday, tallied the 10-year national savings for generics at $1.46 trillion, representing a gain of 328% from 2005 to 2016.

Of the nation’s 4.4 billion prescription dispensed in 2015, generic drugs accounted for 3.9 billion, or 89%, said the report, which was compiled by the QuintilesIMS Institute for GPhA. That’s up slightly from the 3.8 billion generic prescriptions dispensed, or 88% of the 4.3 billion overall U.S. script count, in 2014.

“Generic drugs are the foundation of any successful effort to lower health spending and increase patient access to affordable medicine,” GPhA president Chip Davis said in a statement. “A diverse group of experts — the federal government, pharmacy benefit managers, consumer groups and others — agree that generic drugs drive system savings, not costs.”

This year’s report noted that although nearly nine out of every 10 prescriptions are generics, they represented just 27% of total U.S. drug spending in 2015, about the same percentage as the previous year (28%).

Chip Davis, GPhA

Branded drugs accounted for 11% of all prescriptions dispensed and 73% of drug costs in 2015. The GPhA report said that, according to separate QuintilesIMS data, branded specialty drugs represent only 1% of prescription but are responsible for 30% of overall drug expenditures.

Generics helped the leading government payers, Medicare and Medicaid, scale back health benefit costs last year, according to GPhA. The report pegged savings in 2015 at $67.6 billion, or $1,737 per enrollee, for Medicare and at $32.7 billion, or $450 per enrollee, for Medicaid.

Savings from generics by payer type in 2015 were 49% for commercial insurance, 30% for Medicare, 15% for Medicaid and 6% for out-of-pocket cash payers, the report said. States, on average, saved $4.4 billion each from generics last year.

By therapy area, the most savings from generic drugs were found in treatments for mental health ($34.4 billion), hypertension ($25.8 billion), cholesterol ($24.5 billion), anti-ulcerants ($19 billion) and nervous system disorders ($16 billion).

The top five generic drugs in terms of dollar savings in 2015 were atorvastatin (Lipitor) at $12.3 billion, ondansetron (Zofran) at $11.30 billion, omeprazole (Prilosec) at $11.2 billion, simvastatin (Zocor) at $7.3 billion and amlodipine (Norvasc) at $5.2 billion.

Looking ahead, the GPhA study also gave a snapshot of the emerging biosimilars market. “Almost 50 biosimilars are currently in development and will likely results in a highly competitve marketplace over the next five years,” the report said.

QuintilesIMS projected global branded biologic medication sales to climb to $390 billion by 2020, accounting for 28% of the worldwide pharmaceutical market. Savings from biosimilars are estimated at $44 billion to $250 billion over 10 years.

Prescription drugs represent 10% of overall health care spending, compared with 32% for hospital care, 20% for physician and clinical services, 8% for home health and home nursing care, 7% for public/private payer administrative costs and 23% for other health expenditures.

“GPhA will continue working with policymakers, regulators and others to bring greater health savings to our country,” Davis added. “This report underscores the importance of policies that build on the generic drug industry’s record of significant savings and promote generic and biosimilar competition.”