The Formulary Files
Using lower cost generic prescription drugs is vital to holding down the growth rate of health care spending. A new report from the Generic Pharmaceutical Association identifies generic agents in the cardiovascular and central nervous system (CNS) categories as delivering nearly 60 percent of the saving.
Generic CNS medications have contributed significantly to the increase in savings, which was 10 percent from 2009 to 2011. Metabolism drugs that have gone generic also were a source of health care savings in 2011, reducing costs by nearly $27 billion. The report says that since 2002, the savings generated by products in the metabolism drug class has grown an “astounding 500 percent.” The drugs in these three categories account for nearly three fourths of all savings generated by generic drugs in 2011.
The report says the greatest 1-year savings growth came in the oncology category. Savings from the usage of generic oncology products topped $10 billion in 2011, more than three times the $3 billion that generic cancer drugs saved in 2010. Larger savings were attributed primarily to the introduction of generic versions of docetaxel (Taxotere) and gemcitabine (Gemzar), for which brand patents have expired.
On the biopharmaceutical front, the cost-control news is good, too. The report says that the savings seen with traditional generic drugs can be duplicated in the biosimilars market. Estimates from various economic impact studies suggest the savings from $42 billion to $108 billion over the first 10 years that biosimilars are sold.
In addition, the Congressional Budget Office estimates that competition from biosimilars would yield substantially lower prices for lifesaving treatments. The CBO estimates that biosimilars initially will be priced about 25 percent below their brand-name counterparts, and after several years of competition, would be priced as much as 40 percent below the brand.
Therapeutic category generic savings by year ($ billions)
Data extrapolated for years 2004–2006.
Source: Generic drug savings in the U.S. Fourth annual edition: 2012. Generic Pharmaceutical Association http://tinyurl.com/generic-save 
MANAGED CARE September 2012. ©MediMedia USA