Generics Help Hold the Line on Healthcare Costs

Improving lives for less-that’s the tagline from the press release from the Generic Pharmaceutical Association (GPhA) describing the results of an IMS

of the savings produced by generic medicines. The study, Generic Drug Savings in the US, found an impressive $1 trillion in savings over a ten-year period (2002 through 2011). In 2011 alone, the US saved $192.8 billion by using generic medicines. This represents a 20% increase in savings over 2010, driven by patent expirations for a few significant drugs such as Zyprexa (olanzapine), Levaquin (levofloxacin), Advair Diskus (fluticasone propionate) Concerta (methylphenidate), and Lipitor (atorvastatin).

The study looked at 2750 drugs for which there was both a branded and a generic version available on the market. Generic central nervous system and cardiovascular drugs accounted for more than half of the savings generated in 2011, and the greatest increase in savings came from oncology drugs, which generated $10 billion in savings in 2011, compared with $3 billion in 2010.

GPhA used this data to advance support for its goals in support of unimpeded access to generics. GPhA advocates an increase in funding for FDA’s Office of Generic Drugs to ensure the timely review and approval of new generic pharmaceuticals, a fairly noncontroversial goal. It also supports continuing to allow brand and generic manufacturers to settle patent litigation out of court and bring generics to market before brand drug patent expirations. According to the conclusions outlined in the IMS report, “While the settlement issue has engendered opposition from some who contend such generic-brand agreements are anticompetitive, the federal courts and Congress have repeatedly recognized that settlements can be desirable options in patent litigation. The record is clear: settlements allow generic drugs to come to market long before patents on the counterpart brands expire, resulting in billions of dollars in annual savings.”

Generics manufacturers Watson Pharmaceuticals and Mylan took the opportunity to preen a bit, issuing releases (here and here) praising the study and their own contributions to the generics market. PhRMA put the best spin possible on the results, pointing out in their own press release that those generic savings were made possible by a steady stream of innovator products that eventually go off patent.