Ten-year savings hits record at nearly $1.5 trillion according to annual Generic Drug Savings in the U.S. report
WASHINGTON, DC (Sept. 10, 2014) — The Generic Pharmaceutical Association (GPhA) today released a report showing that generic drugs saved the United States health system $239 billion in 2013, a 14% increase over cost savings achieved in 2012, and the largest annual savings to date. The report also calculates that generic medications saved a record of nearly $1.5 trillion over the most recent decade (2004-2013).
"Just last month, we have seen how smart health choices like opting for generic drugs hold the power to move our nation's budget trajectory in a positive direction. In fact, recent Congressional Budget Office (CBO) estimates now predict that Medicare and Medicaid spending is expected to drop by billions over the next decade," said Ralph G. Neas, President and CEO of the Generic Pharmaceutical Association (GPhA). "With more than $239 billion in savings in 2013 alone from generic drugs, it is clear that generics have played a critical part in lowering health cost projections. This track record of savings is unparalleled, and the savings will grow substantially as we enter the era of biosimilars, the next frontier of generic industry innovation. With billions of dollars of savings at stake, this report is a clarion call to lawmakers, regulators and all stakeholders: we must work together to sustain the success of generics today and pave the way for safe, affordable biologic therapies tomorrow."
In recent years, spending on federal health care programs has slowed sharply. In August 2014 the CBO changed its estimates for Medicare spending, projecting a drop of $49 billion (less than 1 percent) from 2015 and 2024, while Medicaid spending is expected to drop by $40 billion (approximately 1 percent) over the next decade. Generic drugs, which provide the same medicine and same outcomes for patients at a lower price, played a key role in the downturn of rising health costs.
Select findings from the sixth annual Generic Drug Savings in the U.S. report:
Cost savings in 2013 alone reached $239 billion, representing a 14% increase over cost savings achieved in 2012.
Generic products saved the U.S. health system $1.46 trillion over the past 10 years.
Nervous system and cardiovascular treatments in the last 10 years account for 58% or $851 billion of cost savings.
All data were compiled by IMS Health on behalf of GPhA.
The timing of the study release coincides with the 30th anniversary of the landmark Drug Price Competition and Patent Term Restoration Act (commonly known as the Hatch-Waxman Act), signed into law in September of 1984, widely credited with creating the modern generic drug industry.
"Thirty years ago," said Neas, "no one could have predicted that generic drugs would save the U.S. healthcare system nearly $1.5 trillion over 10 years alone. The Hatch-Waxman law has yielded hundreds of unprecedented medical breakthroughs by rewarding innovation, and trillions of dollars in savings from encouraging competition."
Click here for the sixth annual Generic Drug Savings in the U.S. report.
Click here for the IMS webinar presentation (PDF only)
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 84 percent of the prescriptions dispensed in the U.S. but consume just 27 percent of the total drug spending. Additional information is available at www.gphaonline.org. Follow us on twitter: @gpha.