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

Contact: Steve Arnoff 202.249.7113 

Experts Note That More Competition Leads to Lower Drug Costs

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.”

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.