Generic Drugs Could Save the U.S. More than $8 Billion Per Year
Greater use of generic medications could result in health care savings while maintaining quality of care
Boston, MA – Prescription drug spending is increasing at a rate of more than 10 percent a year. These escalating costs, and the impact they have on patients, are at the heart of current struggles with Medicare reform. To address the growing crisis of affordable healthcare, researchers from Brigham and Women’s Hospital (BWH) have analyzed national prescription medication data to determine cost savings associated with substituting a generic for an identical, brand name drug when one is available. The researchers found that if prescription medications were substituted in all appropriate cases, it would represent savings of approximately $8.8 billion or 11 percent of total drug expenditures for adults every year. This research indicates that substituting generic medications could help control prescription healthcare costs. Details of this research will be published in the June 7, 2005 issue of the Annals of Internal Medicine.
According to Jennifer S. Haas, MD, MSPH of BWH’s Department of Medicine, “This study demonstrates that we have a very clear and straightforward opportunity to reduce prescription drug spending, a concern that we all share.”
Generic drugs are typically less expensive than brand name drugs while providing the same therapeutic effects as their brand name alternatives. Researchers, in an effort to demonstrate the financial savings associated with substituting for generic medications, evaluated data from the Medical Expenditure Panel Survey Household Component (MEPS-HC) for the year 2000. MEPS-HC consists of healthcare information solicited from more than 10,000 households. Respondents are selected from the prior year’s National Health Interview Survey. Using MEPS-HC, researchers identified multisource drugs – medications that are available in a brand name and one or more generics – and generic drugs to determine cost savings if generics were substituted for multisource medications. Researchers found that 56 percent of all outpatient drugs were multisource. Of these, 39 percent could have been dispensed as a generic but were not. If they were, this could have created a median savings of $46 per year for every adult younger than 65 years and $78 per year for adults at least 65 years of age. In these age groups, the national savings would have been $5.9 billion and $2.9 billion respectively.
The researchers also recommend physicians and patients look closely at specific classes of medication in which there were more opportunities for generic cost-savings. For example, researchers identified anti-histamines, cardiovascular and gastrointestinal medications as categories of medications in which generic substitutions would lead to the greatest savings.
“These results, coupled with other data detailing the financial savings associated with generic medications, should prompt physicians to always evaluate for a generic substitute and encourage individual states and health insurers to consider mandating generics when available,” said Haas, who is also an associate professor of Medicine at Harvard Medical School. “In addition, patients can play an important role in requesting generic medication. Medical facilitates, insurers, government programs need to educate patients about the acceptability and safety of generic medications to help speed the adoption of this practice.”
Please contact BWH Media Relations for more information at (617) 534-1600 or BWHMediaRelations@partners.org.
BWH is a 747-bed nonprofit teaching affiliate of Harvard Medical School and a founding member of Partners HealthCare System, an integrated health care delivery network. BWH is committed to excellence in patient care with expertise in virtually every specialty of medicine and surgery. The BWH medical preeminence dates back to 1832 and today that rich history in clinical care is coupled with its national leadership in quality improvement and patient safety initiatives, dedication to educating and training health care professionals, and strength in biomedical research. With $370M in funding and more than 500 research scientists, BWH is an acclaimed leader in clinical, basic and epidemiological investigation - including the landmark Nurses Health Study, Physicians Health Studies, and the Women's Health Initiative. For more information visit www.brighamandwomens.org
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