Generic Medicines a Financial Boon to Patients and Taxpayers
Citizens Against Government Waste (CAGW) today praised the release of the fourth annual edition of “Generic Drug Savings in the U.S.” from the Generic Pharmaceutical Association (GPhA). The report documents $1.1 trillion in savings from the use of generic drugs over the past decade, with almost half of those savings coming from generic drugs that entered the market since 2002. Nearly 80 percent of the 4 billion prescriptions dispensed in the United States last year were for generic drugs. These trends are critical, since spending on healthcare constituted 18 percent of the nation’s GDP in 2010, and is expected to climb to 25 percent by 2018.
“Generic medicines continue to have a healing effect, not only on the patients who consume them but also on taxpayers,” said CAGW President Tom Schatz. “Since the federal government picks up 29 percent of the costs of all healthcare spending annually, mostly through Medicare and Medicaid, and state and local governments pick up an additional 16 percent of such costs, the availability of lower cost generic drugs will increasingly be an important tool in slowing the mounting expense to taxpayers of healthcare in the future.”
The report noted that the $1 trillion in savings over 10 years was massive compared to the original estimates of only one billion dollars over 10 years following the passage of the Hatch-Waxman Act in 1984, which unleashed the widespread development of generic drugs. GPhA noted that additional estimated savings of between $42 billion and $108 billion over the next decade will come from biosimilars, which are generic versions of biopharmaceutical drugs.
“As long-standing of making generic drugs widely accessible, this report confirms that there are real savings to consumers and taxpayers in the availability of generic medicines. CAGW will continue to support public policy measures that encourage the timely development and market availability of generic drugs,” concluded Schatz.
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