Medicare Part D Generic Drug Prices Fall Nearly 60% Since 2010, GAO Finds

Article

A new Government Accountability Office (GAO) report finds that prices for generic drugs in Medicare Part D fell 59% from the first quarter of 2010 to the second quarter of 2015.

PRESS RELEASE

WASHINGTON, DC (Sept. 12, 2016) — A new Government Accountability Office (GAO) report finds that prices for generic drugs in Medicare Part D fell 59% from the first quarter of 2010 to the second quarter of 2015. This report comes at a time when an increasing number of public policy experts, supply chain stakeholders, economists and others recognize that over time, generic drugs drive savings, not costs.

Statement by Chip Davis, President and CEO, GPhA:

“At a time when everyone is looking for cost saving solutions, it is important note that the GAO findings are consistent with the prevailing market trend — generic drug prices overall continue to decline year over year. Generic drugs are 88% of prescriptions dispensed but only 28% of costs. This means that generic drugs are overwhelmingly responsible for making medicines accessible and affordable in the United States. For example, spending on medicine in public programs such as Medicare would nearly double without the availability of generic drugs, according to the

Generic Drug Savings in the U.S. report

.

The GAO report also notes:

The use of generic drugs—that, on average have retail prices that are 75 to 90 percent lower than the retail prices of brand-name drugs—can provide significant cost savings to the U.S. health care system. Generic drugs not only lower costs for individuals in the form of lower copayments and other out-of-pocket costs, but they also lower costs for third-party payers—including private health insurance plans and public programs.

This should be clarion call to Congress — any policy to address rising drug costs should expand rather than hinder generic drug savings, reflecting long term market realities.

The GAO report is consistent with the findings in a January 2016

HHS ASPE report

which stated, ‘generic drug prices are not an important part of the drug cost problem facing the nation.’ Indeed,

Express Scripts

notes that ‘the average price for the most commonly used brand-name drugs has increased 164% since 2008, whereas generic drug prices have continued to decline.’

GPhA will continue working with Congress, FDA and others to usher in policy that promotes competition from generic drugs. A framework that promotes generic competition can expand patient access and help millions of Americans save more on medicines.”

Related Videos
Laboratory test tubes and solution with stethoscope background | Image Credit: Shutter2U - stock.adobe.com
Image credit: Andrea Izzotti
Inflation Reduction Act is shown using the text and the US flag - Image credit: Andrii | stock.adobe.com
Pharmacy Interior | Image Credit: Tyler Olson - stock.adobe.com
Male pharmacist selling medications at drugstore to a senior woman customer | Image Credit: Zamrznuti tonovi - stock.adobe.com
Pharmacist assists senior woman in buying medicine in pharmacy - Image credit: Drazen | stock.adobe.com
Pharmacy, medicine and senior woman consulting pharmacist on prescription. Healthcare, shopping and elderly female in consultation with medical worker for medication box, pills or product in store - Image credit: C Daniels/peopleimages.com | stock.adobe.com
Image credit: fidaolga - stock.adobe.com
Pharmacists checking inventory at hospital pharmacy- Image credit: Jacob Lund | stock.adobe.com
Young male pharmacist giving prescription medications to senior female customer in a pharmacy | Image Credit: Zamrznuti tonovi - stock.adobe.com
© 2023 MJH Life Sciences

All rights reserved.