NCPA - National Center for Policy Analysis

GENERIC RX: INCREASED USE COULD HAVE SAVED $20B THIS YEAR

October 27, 2005

By increasing use of generic drugs, consumers, employers and health plans could have saved more than $20 billion in 2004, according to a new report by pharmacy benefit manager Express Scripts.

The report, which analyzed six major classes of drugs, is based on a sample of about three million Express Scripts commercial members.

According to researchers:

  • Some $24 billion in savings will be lost if generic use does not increase this year and $25 billion in savings will be lost if generic use does not increase next year.
  • Generic drugs cost on average $60 less per monthly prescription than a brand-name drug.
  • Using generic gastrointestinal drugs has the potential for the "most dramatic savings," projected at about $5.4 billion nationally.
  • A generic gastrointestinal drug is appropriate about 95 percent of the time but is dispensed only about 31 percent of the time.

In addition, generic drugs generally have lower copayments, which could result in savings of about $10 per prescription for consumers, say researchers. Indeed, the potential for savings from increased generic drug use will rise, as more brand-name drugs lose patent protection in the next five years.

Source: Theresa Agovino, "Generic Rx: Increased Use Could Have Saved $20B This Year," Associated Press, October 25, 2005.

 

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