NOVEMBER 01, 2007

Will the health care cost savings realized through increased use of generic drugs become an issue in next year?s presidential election? Some generic-industry leaders see that as a distinct possibility, as candidates from both parties begin to focus on solutions to soaring health care spending.

?Cost and access are 2 issues that are dominating our nation?s health care debate,? and ?increasingly, we are hearing presidential candidates talk about generics?and biogenerics? as a means to address these pressing issues,? Generic Pharmaceutical Association (GPhA) President and Chief Executive Officer Kathleen Jaeger said.

At least 3 Democratic candidates?Hillary Rodham Clinton, John Edwards, and Barack Obama?have included generics in their health care proposals. On the other side of the political fence, Republican Mitt Romney has expressed support for increased generic-drug use to help hold down health care costs.

In welcoming the high-profile focus on generic drugs, Jaeger maintained that generics ?are truly the solution to affordable, quality health care.? She also applauded the initiatives launched over the past year by pharmacy chains to further reduce the cost of generic medicines to the public. Noting that a 1% increase in generic-drug use can save patients $4 billion annually, she said that businesses and consumers have also begun to recognize the value of generics.

?In the past year alone, there has been a growing movement to establish programs encouraging the use of generic medicines,? she said. ?Sixty-three percent of all US prescriptions dispensed are filled with generics, at costs 30% to 80% lower than brands.?

In addition to lowering costs, there is growing evidence that generic drugs can promote better outcomes for patients. According to Jaeger, ?studies show that when patients take generic medicines, they are more likely to keep using the medicines as needed. And patients who maintain their treatments are less likely to be hospitalized for their conditions.?

Prescription drugs, which have drawn fire in recent years for helping to drive up overall health care costs, are now getting credit for helping to hold those costs down, and the increase in generic prescribing over the past few years is being cited as the key factor in that turnaround. The latest Labor Department statistics show that annual inflation in drug costs is at the lowest rate in 3 decades?a meager 1%. That is less than one fourth of the 4.4% increase in prescription drug prices experienced in 2005.

In part, government economists attribute the decline in prescription inflation to generic-drug price reductions by major pharmacy and discount store chains over the past year. Efforts by managed care groups to encourage generic prescribing through reduced copays and other strategies were also instrumental, they said.