GPhA: Generic drugs have saved $931B over 10 years

The Generic Pharmaceutical Association (GPhA) is again pointing to the cost-savings offered by generic drugs. The group has issued an independent analysis showing the use of these meds in the U.S. saved consumers and the healthcare system $931 billion between 2001 and 2010. Indeed, generic use generated nearly $158 billion in savings in 2010 alone--that's an average of $3 billion a week, according to the analysis, which was conducted by the IMS Institute for Healthcare Informatics and IMS Health.

The report also points out that many new generics have entered the market before the patents on the brand version expired thanks to patent litigation settlements. Interesting timing for this news--especially given that President Barack Obama is looking to prohibit patent settlements between generics and branded companies known as "pay-to-delay" deals. Through these deals, branded drugmakers use cash settlements to resolve patent disputes with generics firms.

Although the administration and the FTC have come out strong against such settlements, not everyone agrees an outright ban would help matters. "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," Ralph Neas, GPhA president and CEO, says in a statement. Furthermore, according to the report, "Of the 22 new generic drug launches expected in 2011, settlements made 16 of these possible where the generic will launch prior to patent expiry."

The report contains more good news about generics. The Medicaid system could save more than $1.3 billion annually by increasing generic use by just two percentage points, according to the analysis. Nationally, generics account for only about 70% of total Medicaid prescriptions. However, outside Medicaid, generics account for 78% of all prescriptions. Federal and state governments could save more than $600 million for each one percentage point increase in generic usage, according to the study.

- see the GPhA release
- check out the report