Despite increasing national attention to prescription price sticker-shock, a recent study found that in 2016 alone, New York state saved $21 billion by choosing generic prescription drugs over brand-name supplies.
According to the Association for Accessible Medicines, nearly 90 percent of prescriptions nationally are filled by generics, while only constituting only 26 percent of all drug spending. This means that in the United States, 11 percent of prescriptions make up 74 percent of drug costs.
Last year, the most savings went to commercially insured consumers and Medicare, followed by Medicaid and uninsured consumers.
On average, generics saved $512 per enrollee under Medicaid and $1,883 per enrollee under Medicare.
The study was completed by third-party researchers on behalf of the AAM and took into account prescription prices from 1992 through 2016.
“Too many patients are priced out of the medicines they need,” Dr. Scott Gottlieb, commissioner of the Food and Drug Administration, told the House of Representatives in May. “While FDA does not play a direct role in drug pricing, we can take steps to facilitate entry of lower-cost alternatives to the market and increased competition. This is especially true when it comes to safe and effective generic medicines.”
Nationally, generics savings added up to $253 billion in 2016, or about $5 billion per week.
This year, Gov. Andrew M. Cuomo introduced into the executive budget an unprecedented measure to set an annual cap on Medicaid prescription drug spending.
New rules could punish pharmaceutical companies who don’t reimburse the state when Medicaid drugs prices rise rapidly by bringing their products and profit margins under review.
The spending cap, the first of its kind, aims to limit spending to no more than the medical inflation total plus 5 percent.
Several large drug manufacturers have objected to the measures, as well as the Pharmaceutical Research and Manufacturers of America, claiming they will deter innovation in New York.
The report also found consumers to be three times more likely to abandon, or not pick up a filled prescription, branded drugs over generic ones.
Cost barriers are often to blame for abandonment of drugs that could otherwise benefit that person’s health — 90 percent of generic copays are under $20, compared to 39 percent of branded copays.
In 2016, specialty branded drugs used to treat complex diseases accounted for 1 percent of prescriptions and 32 percent of total drug spending across the country.
— NEW YORK in 2016 —
Commercial Savings: $8.5 billion
Medicare Savings: $7 billion
Medicaid Savings: $4.7 billion
Cash (non-insured) Savings: $886 million
— Nationally in 2016 —
87 percent of patients saved money by switching to generics
More than half saw a $50 or greater cost reduction
40 percent of abandoned prescriptions were branded
3.9 billion generic prescriptions were dispensed