Shopping for Drugs
Table of Contents
- Executive Summary
- Introduction
- Comparing Prices
- Therapeutic Drug Substitution
- Pill Splitting
- Generic Drug Substitutes
- Switching to Over-the-Counter Drugs
- Mail-Order Pharmacies
- Global Options
- Financial Assistance to Lower Drug Costs
- Price Comparisons for Specific Drugs
- Conclusion
- Notes
- Appendix
- About the Author
Generic Drug Substitutes
"Purchasing medications in doses double that of the prescribed amount and splitting them in half can often lower drug cost."
An effective way to lower drug bills is to seek generic equivalent medications whenever possible. According to the Prime Institute at the University of Minnesota, only 10 of the 50 drugs most frequently used by seniors in 2001 were generics; the remaining 40 were brand names.33 By contrast, two-thirds of the drugs dispensed by the Veterans Affairs (VA) health system are generic, and they represent only 8 percent of the VA's prescription costs. In other words, brand-name drugs, comprising only one-third of the drugs dispensed by the VA, account for 92 percent of that system's drug costs.34
For retail customers, generic drugs are generally priced from 20 percent to 80 percent lower than the original branded drug.35 Thus the average cost for a generic prescription was $14.70 in 2002, compared to $77.02 for branded medications.36 Only those medications whose patent has expired are available in generic form, however.
"Generic medications now comprise almost half of the market for pharmaceuticals - up from just over 20 percent in 1985."
Generic medications now comprise almost half of the market for pharmaceuticals - up from just over 20 percent in 1985. This ratio is likely to increase, as many of the so-called blockbuster drugs have recently lost patent protections or will face generic competition within the next few years. By 2005, name-brand drugs with combined annual sales of $100 billion will lose patent protection and face generic competition.37 Some well-known drugs that have either lost patent protection or will do so shortly include Prozac and Zoloft (for depression), Claritin (for allergy relief), Zocor (to lower blood cholesterol) and Prilosec (for ulcers and gastric reflux disease). When a blockbuster drug faces competition from multiple generic manufacturers, the price usually falls. For example, although 19 brand-name drugs had sales revenue of $1 billion or more in 2000, no single generic drug did so precisely because of the fierce competition among drugs without patent protection.38 Generic drug producers claim that the major pharmaceutical firms delay competition (and effectively extend the life of the original patent) through time-consuming legal maneuvers. However, a proposed regulatory change by the Bush administration would allow patent holders to receive only one 30-month delay while contesting competition from generic products.39 Additionally, both the Bush administration and Congress are taking steps to speed generic drugs to market.40 Thus consumers will have more opportunities to substitute generics for brand-name medications over the next few years.
