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GPhA Applauds New JAMA Research, Identifies More Opportunities for Generic Drug Savings

Experts Find $73 Billion in Excess Spending By Patients and Health System

Contact: Steve Arnoff 202.249.7113

WASHINGTON, DC (May 12, 2016) —

Chip Davis, President and CEO, GPhA:

“Experts agree: generic drugs drive savings, not costs. Generics saved the U.S. health system $254 billion in 2014, according to the most recent Generic Drug Savings in the U.S. report compiled by the IMS Institute for Healthcare Informatics on behalf of GPhA. Still, there is more that can be done to put unrealized savings back into the health system.

A new Journal of the American Medical Association (JAMA) Internal Medicine study, Estimation of Potential Savings Through Therapeutic Substitution, (Michael E. Johansen, MD, MS; Caroline Richardson, MD) finds that between 2010-2012 an excess of $73 billion was spent on brand drugs when generics were available. One third (33%) of that cost was borne by patients paying out-of-pocket, the study finds. The authors state:

‘The general acceptance of generic substitution has increased the efficiency of the prescription drug market. Use of generic drugs leads to higher levels of adherence and has decreased health care costs while improving outcomes. Critical to the growth of the generic drug market was the idea of therapeutic equivalence and hence substitution of generic for branded drugs.’

This study reiterates that less than optimal therapeutic substitution remains a missed opportunity for patient and health system savings. Another article in the recent edition of JAMA cites that 85% of physicians surveyed believe that generics should be used more often.

At a time when patients, payors and others are seeking health cost relief it is more important than ever to increase generic prescribing and utilization. To do so, Congress and others can pursue policy solutions that benefit millions of Americans who rely on generic drugs:

• Ensure a fully-resourced Food and Drug Administration (FDA) can address the backlog of more than 3,800 generic drug applications stalled while waiting for approval and shorten FDA median generic drug approval timelines, which, at the industry’s best estimate, currently stand at 48 months.

• Increase generic utilization among the low-income Medicare population, which could save more than $18 billion over 10 years.

• Pass the bipartisan FAST Generics Act to curb some brand drug company abuses of FDA safety programs such as Risk Evaluation and Mitigation Strategies (REMS) used to keep generics off the market, an estimated savings of $2.4 billion over 10 years.

• Work closely with industry and regulatory partners to ensure that the framework for biosimilars, safe and effective alternatives to costly brand biologic drugs, expands and expedites patient access. Estimated biosimilars savings range from $44 billion to $250 billion.

• Repeal Sec. 602 of the Bipartisan Budget Act of 2015. The Medicaid rebate increase for generic drugs in the budget deal is bad for Medicaid and its beneficiaries, bad for taxpayers, and it should be immediately repealed.

GPhA looks forward to continuing to work with Congress and other stakeholders to ensure timely patient access to generic drugs and biosimilars.”

About GPHA
GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 88 percent of the prescriptions dispensed in the U.S. but consume just 28 percent of the total drug spending. Additional information is available at Follow us on twitter: @gpha.