Generics save US 1.5 trillion over last 10 years

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Generics save US 1.5 trillion over last 10 years

Home/Reports | Posted 24/10/2014 0 Post your comment

Generics have saved consumers and the US healthcare system US$239 billion in 2013 and have saved the US nearly US$1.5 trillion between 2004 and 2013, according to a report by the Generic Pharmaceutical Association (GPhA) [1].

Spending on health care in the US has slowed down. Medicare spending is projected to drop by $49 billion (less than 1%) and Medicaid spending is expected to drop by $40 billion (approximately 1%) from 2015 to 2024. The GPhA believes that generics have played a key role in the downturn of rising health costs.

The savings in 2013 represent a 14% increase over cost savings achieved in 2012, and the largest annual savings to date, showing that generics use is vital to holding down health costs, see Table 1.

Table 1: Healthcare savings due to generics use in the US (2004–2013)

Source: GPhA

In 2013, savings from newer generics – defined as those entering the market in the past 10 years – accounted for US$140 billion (59%) of total savings. This compares to US$157 billion (72%) of the total US$217 billion of generics savings made in 2012. The majority of the cost savings come from nervous system and cardiovascular treatments, which accounted for 57% of all savings in 2013, and 58% or US$851 billion of cost savings over the last 10 years.

Savings from newer generics are expected to continue to grow over the coming years as patents expire on currently protected brand-name drugs. Between 2014 and 2016, brand-name drugs with US$40 billion in annual sales will be exposed to competition from generics in the US.

Reference
1. Generic Pharmaceutical Association (GPhA). Generic Drug Savings in the U.S. Sixth Annual Edition: 2014.

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Source: GPhA