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GPhA Says New Study Makes Compelling Case for Increasing Generic Drug Utilization in Medicaid Program

AEI Report Identifies $271 Million in Medicaid Wasteful Spending

WASHINGTON, D.C., JULY 21, 2010 – The Generic Pharmaceutical Association (GPhA) today released the following statement in response to a new report, “Eliminating Waste in Medicaid Drug Spending,” issued by American Enterprise Institute Senior Fellow and former chief economist and policy director for the U.S. House of Representatives Ways and Means Committee, Alex Brill:

“This new and compelling report offers further proof that state governments benefit greatly when substituting safe, effective and affordable generic drugs for brand-name drugs. We know that generic medicines cost up to 80% less than their brand name counterparts. This new study shows that with state governments spending billions of dollars on prescription medicines for Medicaid beneficiaries, the simple solution of substituting generic equivalents for name brand drugs would save nearly $100 per prescription for the top 20 most dispensed drugs – or an estimated $271 million annually.

“As state governments grapple with balancing their budgets, increasing access to generic medicines is plainly the right choice for more affordable health care. And with many consumers struggling to make ends meet, lower cost generics provide the answer to their medication needs. FDA-approved generics are the same medicines as the brand drugs and deliver the same therapeutic results. And using generic medicines saves our health care system $1 billion every three days.

“There has never been a more critical time for the federal government and state governments to implement policies that facilitate greater consumer access to generic pharmaceuticals. The new AEI report gives clear evidence that generic drugs are the best buy in public health.”

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 75 percent of the prescriptions dispensed in the U.S. but consume just 22 percent of the total drug spending. Complete information is available at gphaonline.org.

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