Generic Drugs Slash Out-of-Pocket Costs

Published Online: Wednesday, May 18, 2011
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The savings potential of generic drugs is often discussed in broad economic terms, instead of where it counts for most people—their own wallets. The latest numbers from IMS Health crystallize the direct savings patients pocket when they have access to less expensive generic alternatives.

In their annual study of prescription drug trends, “The Use of Medicines in the United States: Review of 2010,” IMS analysts reported that the average copayment for a generic drug was $6.06 per prescription, compared with $23.65 for a preferred brand drug and $34.77 for a nonpreferred brand drug.

For patients, that translates to savings of 74% compared with preferred brands, and more than 80% compared with nonpreferred brand drugs. “These are big savings for the hundreds of millions of Americans who have prescription drug coverage,” said GPhA executive director Bob Billings.

In his response to the IMS analysis, Billings used these numbers as a springboard, urging the FDA to streamline its approvals process to broaden access to generic medicines. “Every day that a new generic is kept off the market consumers are forced to pay the higher brand name copay,” he said.



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“GPhA applauds FDA for taking helpful steps to address, and hopefully limit, scenarios in which some brand drug companies misuse Risk Evaluation and Mitigation Strategies programs to thwart competition from more affordable generic drugs. The ongoing abuse of REMS and REMS-like programs costs the American health system and its patients $5.4 billion annually, according to a study conducted by Matrix Global Advisors. Interestingly, as the United States market readies for biosimilars, this same study identifies $140 million in lost savings that would occur for every $1 billion in biologics sales.
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