Healthcare system sees more than $1T in savings during past decade


Generics have made a huge difference to the U.S. healthcare system’s bottom line in the past decade, a savings that takes 13 figures to tabulate.

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Over the past 10 years, generics have saved the healthcare system $1.46 trillion, with $227 billion in savings in 2015, according to the QuintilesIMS Institute’s latest report on generics access and savings. That same year, generic spending grew 7.4% to $114.1 billion — a $7.9 billion increase from 2014. Also in 2015, generic drugs made up 89% of dispensed prescriptions, but only made up 27% of total drug costs. By 2021, QuintilesIMS expects that 92% of all prescriptions will be for generics.

The increasing numbers of generic prescriptions that will be dispensed in the next five years coincides with an expected increase in the impact that patent expiry for branded drugs. Where the five years from 2012 to 2016 saw a $91.1 billion impact from patent expiries, the coming five years are expected to see an impact of $143.5 billion.

A substantial amount of the impact from patent expiries is expected to come from the continued approval and launch of biosimilar drugs, which bring cost savings of about 10% to 15% off of the biologic price and five of which have been approved by the Food and Drug Administration thus far. By the end of 2017, the industry expects further clarification from the Food and Drug Administration about the interchangeability of approved biosimilars and the original products.

The FDA also is in the midst of laying the groundwork for the second phase of the Generic Drug User Fee Amendments, which, if approved by Congress, will last from fiscal year 2018 to fiscal year 2022. Beyond GDUFA II, the industry is hoping that Congress will take action in 2017 on measures that will increase competition in the generics marketplace. The Generic Pharmaceutical Association in January sent a memo to then President-elect Donald Trump about ways to improve the regulatory pathway that generics makers face.

Included in the GPhA memo were suggestions to reduce the number of pending generic drug applications, increasing generic usage in the Medicare low-income subsidy population and working to ensure a framework that allows for a biosimilar framework that expands and expedites patient access. Among the organization’s specific legislative priorities is passage of the CREATES ACT of FAST Generics Act, which are aimed at allowing generics makers access to samples that are kept from them under certain Risk Evaluation and Mitigation Strategies.

And the GPhA may have some new allies in Congress, as a report on drug prices from Sens. Susan Collins, R-Maine, and Claire McCaskill, D-Miss., released at the end of 2016 included allowing generic makers access to samples and simplifying REMS in its suggestions for helping bring down the cost of prescription drugs.

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