Report: Generic drugs saved $193 billion in 2011

TRENTON, N.J. (AP) -- Growing use of generic medicines has reduced U.S. health care spending by more than $1 trillion over the past decade, according to an industry-funded study released Thursday.

The fourth annual report, produced for the Generic Pharmaceutical Association, found use of generic prescription drugs in the U.S. saved about $193 billion last year alone. That amount was up 22 percent from the $158 billion in savings from generics in 2010, and was more than three times the $60 billion in savings in 2002, the report states.

The report notes that using inexpensive generic versions of pricier brand-name prescription drugs now saves the country about $1 billion every other day.

Last year, nearly 80 percent of the 4 billion prescriptions dispensed in this country were generic drugs. Because of their cheaper prices, those drugs accounted for just 27 percent of total U.S. spending on prescription medicines. In categories where both branded medicines and generic drugs are available, consumers opted to get the generic version 94 percent of the time last year, the report noted.

Use of generic drugs has been growing steadily in this country, fueled by both patients and insurers looking to save money, since the copycat pills were first allowed under a 1984 law called the Hatch-Waxman Act. Once there are multiple generic versions of a brand-name drug available in pharmacies, the price for all those generics generally drops to 80 percent to 90 percent less than the brand-name price.

Growth in generic use has been accelerating in the last several years as the first generics arrived for an unprecedented number of popular drugs, taken daily by millions of people, that were launched a decade or more ago and are now seeing their patents expire. Those multi-billion-dollar-a-year drugs include Lipitor for high cholesterol, blood thinner Plavix, antidepressant Effexor XR, osteoporosis pill Fosamax and Aricept for Alzheimer's disease symptoms.

The report, which was prepared by health data firm IMS Health, notes drugs for heart conditions and central nervous system disorders such as depression and convulsions account for 57 percent of the annual savings.

Generic drugs are chemically equivalent to brand-name drugs and work the same as the brand-name medicines in nearly all patients. They are cheaper because, unlike the pharmaceutical companies that create brand-name medicines, generic drugmakers don't have to spend roughly a decade and a $1 billion on laboratory and then patient tests to prove the drugs are safe and effective.

Ap.

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