New Study Finds Use of Generic Prescription Drugs Saved Consumers and the U.S. Health Care System $931 Billion Over Past 10 Year

New Study Finds Use of Generic Prescription Drugs Saved Consumers and the U.S. Health Care System $931 Billion Over Past 10 Years
Contact: David Belian 202-249-7124

Savings Reached $158 Billion in 2010, Averaging $3 Billion Weekly

WASHINGTON, D.C. (SEPT. 21, 2011) - The Generic Pharmaceutical Association (GPhA) today released an independently conducted analysis showing that the use of generic prescription drugs in the U.S. has saved consumers and the health care system $931 billion over the last 10 years (2001-2010).

The analysis, conducted for GPhA by the IMS Institute for Healthcare Informatics and IMS Health, shows that in 2010 alone generic drug use generated nearly $158 billion in savings, an average of $3 billion every week.

"These findings could not have come at a more critical time," said Ralph G. Neas, GPhA President and CEO. "The analysis shows beyond doubt that savings achieved through the use of safe and effective generics deliver a huge win to consumers looking to hold down their health care costs. Moreover, the savings provide a winning solution to those in Washington trying to address the sustainability of the nation's health care system, as well as the national economy."

Noting that the Congressional Budget Office recently pointed to the rising cost of health care as the greatest threat to our fiscal future, Neas said, "It is significant that the savings delivered by generics are system-wide and not the result of simply cost shifting. As such, the savings gained through the use of generic medicines benefit both the public and private sectors."

The analysis also pointed to the extraordinary savings delivered by newer generics, those introduced since 2001. The majority of these new generics entered the market before the patents on the counterpart brand drugs expired thanks to patent litigation settlements between the generic and brand companies. "A ban on patent settlements would have the unintended consequence of delaying patient access to lower cost generics, costing consumers, payers and the government billions of dollars," Neas said.

The study also reports that the Medicaid system could save more than $1.3 billion annually by increasing generic use by just two percentage points. Nationally, generics account for only about 70 percent of total Medicaid prescriptions. But outside of Medicaid, generics account for 78 percent of all prescriptions. With Medicaid paying on average 80 percent less for a generic prescription compared to the brand drug, federal and state governments could save more than $600 million for each one percentage point increase in generic usage.

"When the generic drug industry was established by Congress in 1984, it was predicted that generic drugs would save our country $1 billion a year," Neas said. "As this analysis shows, the savings generated by generic prescription drugs are now three times that amount every week. As a result, millions of Americans are able to get the medicine they need at an affordable cost."

GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 78 percent of the prescriptions dispensed in the U.S. but consume just 25 percent of the total drug spending. Additional information is available at

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