Generics could save US Medicare $1 billion per year

The United States national health insurance programme Medicare could have save $1 billion through the use of generic drugs according to a study published in the Journal of the American Medical Association.

The study found that Medicare could have saved $925 million in 2016 if brand name drugs had been substituted with cheaper generic versions, as the researchers note that "For the 10 most costly brand-name combination drugs, the cumulative potential reduction in spending between 2011 and 2016 was estimated at $2.7 billion. Taking into account possible rebates from manufacturers at the average rate reported by Medicare, potential savings would have been estimated at $2.1 billion in total."    

The study goes on to suggest that educating doctors as to the benefits of generic drugs could bring about substantial savings. "Promoting generic substitution and therapeutic interchange through prescriber education and more rational substitution policies may offer important opportunities to achieve substantial savings," the study says.  

The researchers also highlighted the fact that while the price of branded drugs has steadily increased in recent years, in contrast the price of generics continues to fall.

While increasing pressure has been placed on pharmacy benefit managers (PBMs) in an effort to tackle rising drug prices, the Trump administration have also outlined policies aimed at fast tracking the approval of generic versions of drugs in their drug pricing plan American Patients First.

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