When it comes to healthcare savings, generic medicine is anything but ordinary — that is, unless ordinary often constitutes a nearly $1 trillion reduction in industry expense over the last decade, a new paper posits.
According to the fourth annual report released by the Generic Pharmaceutical Association (GPhA), prescription drugs sans the name-brand distinction racked up around $193 billion in savings for 2011 alone, a 22 percent increase from the $158 billion salvaged in 2010. Crunching those numbers results in the United States saving $1 billion every other day when generic medicine is opted for over its name-brand counterparts.
That’s impressive debris, Venkat Krishnan — senior vice president and regional director of the Americas for Ranbaxy Pharmaceuticals Inc. — noted, especially given the rubble the healthcare system currently faces.
"Today, thousands of generic drugs are available in the U.S., and all are manufactured and inspected under the same strict guidelines as brand name drugs,” Krishnan said. “With every prescription filled -- some 80 percent of all prescriptions written in 2011 -- patients taking generics receive the same medicine, with the same quality and result, but at a much lower cost. We [Ranbaxy] are happy to be a part of the solution to the problem of escalating costs facing the U.S. health care system."
As dozens more brand-name prescriptions lose their patented stripes — a group subsisting of popular names such as cholesterol combatant Lipitor, blood-thinning Plavix, anti-depressant Lexapro, asthma and allergy reliever Singulair, high triglycerider Lovaza and diabetes fighting Actos will all see their patents run dry soon — analyzers from IMS Health, the company that conducted the report for GPhA, claim healthcare savings stand to only increase by way of upcoming generic understudies.
“Generic drugs improve outcomes and lower costs," said Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt. "Policymakers can increase access and savings in Medicare, Medicaid and other public programs by fully leveraging PBM tools like flexible formularies and mail-service pharmacy."
Consumers were found to opt for generic drugs over brand-boosted prescriptions 94 percent of the time last year, the report found. A consult of industry co-pay averages — for those who have health insurance, a generic medication costs $6 while brand-name medications cost $24 — provided possible incentives to explain this consumer behavior.
But the question still looms: Are generic medications as beneficial to the patient as they are to the industry’s pocket?
Pharmaceutical companies and health experts alike have long insisted that the medical hazards accompanying generic drugs are the same as those inherent in their name-brand predecessor, but a different type of disparity leaves the scales of justice uneven despite the pill measurements being balanced. A New York Times article published in March of this year brought to light the legal risks not always included in the fine print on generic pill bottles. Due to a Supreme Court ruling last year, generic pharmaceutical companies were deemed not in control of what their labels said and thus could not be sued for failing to alert patients of drug dangers.
As such, understanding of generic prescriptions should be established between physicians and patients at the point of care. Physicians should be aware of both generic medications and their brand-name counterparts as to assure that patient care and education is up to standard. PCMA also recommends physicians become acquainted with pharmacy benefit managers (PBMs) to improve affordability and quality of care.
Interested in the IMS report? Find the full document here.