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GPhA tallies savings from generic drug use

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Percentage of prescriptions that are generics also higher, report finds

WASHINGTON — The U.S. health care system saved a record $254 billion last year through the use of lower-cost generic drugs, the Generic Pharmaceutical Association (GPhA) reports.

Over the past decade, covering 2005 to 2014, the savings yielded by the use of generics over their more expensive brand-name counterparts totals $1.68 trillion, according to the seventh Generic Drug Savings in the United States report compiled by the IMS Institute for Healthcare Informatics on behalf of GPhA.

Total savings generated by generics use in 2014 rose more than 6% from the $239 billion saved in 2013.

The 3.8 billion generic prescriptions filled in 2014 accounted for 88% of drugs dispensed nationwide (up from 86% the year before) but represented just 28% of drug costs.

That translated into significant savings for the leading public drug benefit programs, Medicare and Medicaid, and in turn for federal and state budgets, beneficiaries and taxpayers, the GPhA report noted.

Last year, Medicare saved $76.1 billion by using generics, for an average of $1,923 in savings per enrollee, while Medicaid saved $33.5 billion, or $479 per enrollee savings, the report said. The highest per-capita Medicaid savings were accrued by Kentucky, West Virginia, Maine, Rhode Island and Massachusetts.

GPhA 2015 Generic Savings Report chart

Source: GPhA, IMS Institute for Healthcare Informatics

“The facts are irrefutable: Generic drugs drive enormous health care savings,” GPhA president and chief executive officer Chip Davis said in a statement. “This new report reinforces that generic drugs are a critical part of any solution to rising costs for patients, payers and for the entire health care system. Safe, effective and more affordable generic medicines mean increased access for the millions who rely on these life-saving therapies.”

For the first time, this year’s report includes state-by-state savings from generics. The study also examines savings from generics in key therapy areas. Of note, the most savings from generic drugs were realized in treatments for mental health ($38 billion), hypertension ($27.9 billion) and cholesterol ($26.8 billion).

Generics taken by older adults (ages 40 to 64) and seniors represent the majority (80%) of the $254 billion in savings in 2014, GPhA pointed out. Medicines taken by seniors accounted for more than a third of the total savings, or $92 billion, and therapies for older adults tallied $111 billion in savings.

“GPhA will continue advocating for efforts that grow savings and eliminate barriers to patient access,” Davis added. “As policymakers look for solutions to rising health care costs, we look forward to working with Congress, the FDA, the patient and provider communities, and stakeholders from all corners of the supply chain to embrace policies that support generic manufacturers’ ability to provide this remarkable level of savings.”


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