Study reveals that American healthcare system saves bundles with generics
ARLINGTON, Va. The American healthcare system has saved more than half of $1 trillion over the last decade from using generic drugs, according to a study released Thursday.
The Generic Pharmaceutical Association released results of an analysis commissioned from healthcare industry analysis firm IMS Health showing that the healthcare system saved more than $734 billion between 1999 and 2008, including about $121 billion in savings in 2008. The organization released the analysis as part of its year-long celebration of the Hatch-Waxman Act of 1984, which created a regulatory pathway for generic pharmaceutical drugs.
“In 1984, it was predicted that the Hatch-Waxman Act would save our country $1 billion in the first decade,” GPhA president and CEO Kathleen Jaeger said in a statement. “Now, generic medicines save more than that every three days.”
In the mid-1990s, an analysis by the Congressional Budget Office of the first 10 years of the Hatch-Waxman Act showed that savings from generics were $8 billion to $10 billion a year. By 1999, according to the new analysis, that figure had become $49 billion.
The growth resulted from several factors, especially an increase in the use of generics, from 61% in 2006 to 69% in 2008, and the loss of patent protection for several blockbuster drugs, including Sanofi-Aventis’ Ambien (zolpidem tartrate), Merck & Co.’s Fosamax (alendronate sodium) and Pfizer’s Zoloft (sertraline hydrochloride).
The Pharmaceutical Care Management Association, an organization that represents pharmacy benefit managers, said the study highlighted generic drugs as an important cost-saving tool.
“Since 1984, the potential for generics to offer savings has been routinely underestimated,” PCMA president and CEO Mark Merritt said. “PBMs and others have consistently found new and innovative ways to promote generic utilzation and competition in the prescription drug marketplace.”
The GPhA and PCMA said the study indicated that biosimilars could have a similar effect of lowering costs. Both organizations have endorsed legislation introduced in March by Rep. Henry Waxman, D-Calif. – a sponsor of the original Hatch-Waxman Act – that would establish a regulatory pathway for biosimilars similar to that of generic pharmaceutical drugs.
That bill, H.R. 1427, the Promoting Innovation and Access to Life-Saving Medicine Act, competes with H.R. 1548, the Pathway for Biosimilars Act, introduced days later by Rep. Anna Eshoo, also a California Democrat. As of Thursday, Waxman’s bill had 10 co-sponsors and a companion bill introduced in the Senate by Sen. Charles Schumer with six co-sponsors, while Eshoo’s bill had 69 co-sponsors.