GPhA Welcomes Bipartisan Policy Center Proposal to Save Billions Through Increased Use of Generics

Published Online: Friday, April 19, 2013

WASHINGTON, DC (April 19, 2013) — Yesterday’s Bipartisan Policy Center (BPC) report, entitled “A Bipartisan Rx for Patient-Centered Care and System-Wide Cost Containment”, contains a smart, forward-looking and no-cost recommendation that could save the government billions.

The report, focused on finding practical solutions and incentives for a more sustainable health care system, calls for the greater use of generic drugs, which are a safe, affordable and proven method for lowering health costs. The BPC proposal calls for stronger incentives for Medicare low-income subsidy beneficiaries to use lower-cost drugs, along with incentives for Part D plans to provide generic alternatives. The Center estimates the savings from this provision for FY2014-2023 at $44.3 billion. GPhA included a similar provision in its “Prescription for Sequestration Pain” letter in March, calling on Congress to use generic drugs to help lower health costs, which are a contributor to the federal deficit.

“This proposal highlights the dramatic cost savings that policies encouraging generic use can have. When the government takes full advantage of generic drugs, it results in major savings. This is evident in the Veteran’s Administration, in TRICARE, and others. The Medicare low-income subsidy population can benefit similarly, saving billions by employing these measures,” said Ralph G. Neas, President and CEO of the Generic Pharmaceutical Association.

In addition to reimbursement shifts that could save billions, the BPC also highlights the need to close the loophole in the current REMS policy, a regulatory program designed to reduce consumer misuse of high-risk drugs that is being taken advantage of by brand companies seeking to prevent generic competition. BPC estimates this small change would result in more than $753 million from FY2013-2022.

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