Why Generic Drugs?

“Better access to medicine matters to everyone because we’re all patients.”– The Association for Accessible Medicines

According to the Association for Accessible Medicines, there are numerous factors threatening patient access to critical, life-saving medicine: 

  • Market changes (creating an unsustainable climate for generic and biosimilar manufacturers)
  • Anti-competitive tactics (designed to artificially extend government provided monopolies on high-priced brand drugs)
  •  Misguided government policies (ones that fail to account for differences in the business models for generic, biosimilar and brand name drugs)

It is such a major issue that a recent survey conducted by Harvard’s School of Public Health found that Americans consider action to lower prescription drug prices more important than any issue, including immigration reform.

Generic drugs play a huge role in this effort and there are at least 43 drugs that are going generic in the next 5 years (check to see if yours or your patients’ drugs are on it). This saves patients and the public hundreds of billions of dollars annually, and almost two trillion dollars over the last decade. And new biosimilar medicines represent additional savings and access on the horizon.

“Most people believe that if something costs more, it has to be better quality. In the case of generic drugs, this is not true. The standards for quality are the same for brand-name and generic products.”

Gary Buehler, Director of FDA’s Office of Generic Drugs

In 2017, all patients who were prescribed more expensive brand name drugs were 2-3 times more likely to abandon their prescriptions, never getting the treatment they need.

Abandonment (VERB): when a patient fills a prescription as prescribed by a doctor and then never picks up or uses said prescription. 

Not only do generics and biosimilars help people live healthier lives by driving down the costs of existing drugs so people can afford the medicines they need, but generics also increase competition so patients and payers have a choice in the marketplace.

This enhances access to safe, effective drugs so more consumers actually take their prescriptions.

Generic drugs for mental health, hypertension, cholesterol, and ulcer generated the majority of savings in 2017. And without generic medications, spending on anti-ulcerants would have reached $24.6 billion in 2017 rather than the $3 billion that was actually spent.

But it’s not just patients that benefit from the use of generics. 

Setting reimbursement so that pharmacy retention for generic drugs exceeds brand retention can incentivize pharmacies to substitute generic for brand products. And generic ingredients cost markedly less than brand ingredients, which is a win for pharmacies and health plans alike.

Recently the idea has been floating around that lowering generic reimbursements for pharmacies would be beneficial. And although we need to take a good long look at our overall healthcare spending on a national level, lowering generic reimbursement is not the priority given the low per-prescription cost and the cost pressures generated by other services in the healthcare system.

Health plans frequently do not know the “net” prices pharmacies pay for generic drugs, which are both very complicated and not public. The low priority health plans assign to lowering generic reimbursement may in part reflect their lack of awareness of pharmacy retention for generic drugs.

As always, what matters is access and availability to patients, pharmacies, and to you our customers at Salus Medical.