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Statement by Chip Davis, President and CEO, GPhA, Regarding the AARP Rx Price Watch Report

WASHINGTON, DC (Feb. 29, 2016) — “Today’s AARP report, Trends in Retail Prices of Prescription Drugs Widely Used by Older Americans, 2006 to 2013, shows that retail prices of prescription drugs increased each year analyzed, correctly identifying brand and specialty drugs as the key drivers of growing drug costs, while noting that generic drug costs continue to decline.

In highlighting the high annual cost of medicines, AARP notes that ‘these findings are entirely attributable to strong drug price growth among brand name and specialty drugs, which more than offset substantial price decreases among generic drugs.’

The report also shows the rapidly growing price difference between brand, specialty and generic prescription medicines, stating that in 2013, the average annual price of therapy for specialty prescription drugs was 18 times higher than the average annual price of therapy for brand name prescription drugs ($53,384 vs. $2,960, respectively) and 189 times higher than the average annual price of therapy for generic prescription drugs ($53,384 vs. $283, respectively).

This AARP data is in line with several recent reports and analyses, including a Department of Health and Human Services (HHS) issue brief that states ‘Our review of evidence strongly supports the conclusion that generic drug prices are not an important part of the drug cost problem facing the nation. In fact, about two-thirds of generic products appear to have experienced price declines in 2014.’

It is clear that generic drugs continue to drive savings, not costs. Generics are 88% of prescriptions dispensed but only 28% of overall drug costs, according to the annual Generic Drug Savings in the U.S. report compiled by IMS Health on behalf of GPhA.

As AARP calls for policymakers to support innovation, GPhA would add that policymakers could also take five steps to increase pharmaceutical competition:

• Ensure a fully-resourced Food and Drug Administration (FDA) can address the backlog of more than 3,400 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 up to $17.7 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 savings from biosimilars 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 working with AARP and others to ensure timely access to safe and effective generic drugs continues for millions of patients.”

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.