The U.S. spends an estimated $2 trillion annually on health care expenses. Health plans are working with providers and consumers to take control of rising costs through a variety of innovative programs, such as through the utilization of generic drugs over high-cost, brand-name medications. Health plans have put in place programs, such as prescription drug tiering, to incentivize patients to use lower-cost generic drugs when they are available. AHIP’s report, Innovations in Recognizing and Rewarding Quality, details some of the ways health plans are increasing the use of generic drugs. These initiatives are helping to increase the use of generic drugs and control the rise in spending on prescription drugs.
A new report by the Generic Pharmaceutical Association found that savings due to the use of generic prescription drugs has risen to $1 billion every other day – $193 billion in 2011 and more than $1 trillion over the past decade.
Some highlights from the report:
- 2011 savings from generics increased 22 percent over the prior year, marking the largest year-over-year increase since 1998, and 10 percentage points higher than the 10-year average.
- Savings from newer generic medicines—those that have entered the market since 2002—continue to increase exponentially, totaling $481 billion over the past 10 years.
- In 2011, nearly 80 percent of the 4 billion prescriptions written in the U.S. were dispensed using safe and effective generic versions of their brand name counterpart drugs.
- Generic versions of central nervous system (CNS) drugs, such as antidepressants and anticonvulsants, and cardiovascular drugs account for 57 percent of the annual savings.