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Generic Drugs Deliver a Record $254 Billion in Savings to U.S. Health Care System in 2014, New Report Shows

November 4, 2015

Washington - The U.S. health care system saved a record $254 billion in 2014 from generic drugs, which amounts to $1.68 trillion over the most recent decade (2005-2014), according to the seventh annual Generic Drug Savings in the United States report compiled by the IMS Institute for Healthcare Informatics on behalf of the Generic Pharmaceutical Association (GPhA).

"The facts are irrefutable, generic drugs drive enormous health care savings. This new report reinforces that generic drugs are a critical part of any solution to rising costs for patients, payers and for the entire healthcare system. Safe, effective and more affordable generic medicines mean increased access for the millions who rely on these life-saving therapies," said Chip Davis, President and CEO of the Generic Pharmaceutical Association (GPhA).

For the first time, this year's report includes state-by-state savings from generics. It also details the key role generic drugs play in Medicare and Medicaid savings, resulting in billions of dollars of savings to federal and state budgets, beneficiaries and taxpayers.

Key findings from this year's report include:

  • Generic drugs saved the U.S. health system $254 billion in 2014.
  • 10-year savings from generics reached $1.68 trillion (2005-2014).
  • The 3.8 billion generic prescriptions are 88% of drugs dispensed in the U.S. but only 28% of the drug costs.
  • Medicare saved $76.1 billion in 2014 by using generics. That means the program saved an average of $1,923 per enrollee.
  • Medicaid saved $33.5 billion in 2014 with per enrollee savings of $479.
  • The highest per capita Medicaid savings were accrued by Kentucky, West Virginia, Maine, Rhode Island and Massachusetts.
  • The report also looks at savings from generics in prominent therapy areas. Notably, the most savings from generic drugs were found in mental health ($38 billion), hypertension ($27.9 billion) and cholesterol ($26.8 billion) treatments.

Generics taken by older adults and seniors account for the majority (80%) of the $254 billion in savings in 2014. Medicines taken by seniors (age 65+) experienced more than one-third of the total savings, or $92 billion, while therapies for older adults (ages 40-64) accrued $111 billion in savings.

"GPhA will continue advocating for efforts that grow savings and eliminate barriers to patient access," said Davis. "As policymakers look for solutions to rising healthcare costs, we look forward to working with Congress, the FDA, the patient and provider communities, and stakeholders from all corners of the supply chain to embrace policies that support generic manufacturers' ability to provide this remarkable level of savings."

About GPhA
GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 88 percent of the prescriptions dispensed in the U.S. but consume just 28 percent of the total drug spending.

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