Off-brand alternatives are a major boon
WASHINGTON - The use of generic prescription drugs has risen to a current rate of $1 billion every other day, saving the U.S. healthcare system more than $1 trillion over the last 10 years (2002-2011), according to a report released Aug. 2 by the Generic Pharmaceutical Association (GPhA).
The Generic Drug Savings study was conducted for GPhA by the IMS Institute for Healthcare Informatics, a division of IMS Health.
"The remarkable findings demonstrated in this report are a testament not only to the generic industry's tremendous accomplishments over the past decade, but to the even greater achievements that are still to come," said Ralph G. Neas, president and CEO of GPhA, in a statement.
According to the study, savings from generics in 2011 increased 22 percent over the prior year. The report also found that in 2011, nearly 80 percent of the 4 billion prescriptions written in the U.S. were dispensed using generic medicines, while accounting for only 27 percent of the total drug spending.
"The biggest thing driving the use of generics is the quality of the medicines that have lost patent protection," said Michael Kleinrock, research director at the IMS Institute for Healthcare Informatics. "When you have really good drugs that were used by millions of people, and then a generic comes to market, the system in the U.S. is very much to transfer the prescription from the brand to generic very quickly."
Kleinrock notes that many consumers are watching for generic options, which are also actively being promoted by managed care plans.
"Eighty percent of U.S. prescriptions are dispensed generically, and 94 percent of the time when generics can be used, they are," he said.
The recent patent expiration of several blockbuster brand name drugs such as Lipitor and Plavix will push generic savings to new levels, according to Kleinrock.
"This year and next year are going to be the two biggest years ever in terms of savings from patent expiries," he said. "This is a very big deal."
The lower cost associated with generics has benefits that extend beyond the individual patient, said Kleinrock, because it often makes it financially possible for patients with chronic illnesses to stay on their medication when they may not have been able to afford the brand name version. The consistent use of maintenance drugs aids in improving a patient's prognosis and drives down the use of healthcare services, he said.
"I can't put too much emphasis on this point," said Kleinrock. "When a patient has a chronic condition and doesn't stay on their medicine, this can really drive up costs in the whole system."
Mark Laffoon, senior director sourcing operations, pharmacy, at supply contracting firm Novation, says the savings achieved through the use of generics is a major boon with no clinical drawbacks.
"The primary impact of generic drugs is the cost savings achieved through lower prices," he said. "There is little impact because the generic drug is clinically the same as the branded drug."
Kleinrock agrees.
"There has been a long history of anxiety, I would call it, around whether generics are really safe and similar to brands," he said. "Based on everything we've seen and can measure, the vast majority of generics are absolutely as scientifically identical as possible."