Statement by Ralph G. Neas, President and CEO, GPhA, Regarding Generic Medicine Costs

WASHINGTON, DC (November 20, 2014) -

“Generic medicines are a critical part of system-wide efforts to hold down healthcare costs. Indeed, the world’s leading healthcare analytics firm, IMS Institute for Healthcare Informatics, found that generics saved $239 billion in 2013 (a 14% increase in savings from 2012) and more than $1.46 trillion over the recent decade. Further, the Express Scripts 2013 Drug Trend Report issued in 2014 shows that since 2008, the price of brand drugs has almost doubled, but the price of generic drugs has been cut roughly in half. Generic manufacturers can proudly point to a legacy of savings and access that will continue to bring expensive treatments within reach for millions of people.

That is why the Generic Pharmaceutical Association (GPhA) is disappointed at how some have mischaracterized the facts about generic drug prices. Their data is missing one crucial element: perspective. The examples cited by the Healthcare Supply Chain Association (HSCA) on recent purchases by group purchasing organizations (GPOs) focuses on 10 drugs in a marketplace of more than 12,000 safe, affordable generic medicines. In fact, thousands of generics have seen significant price erosion over time due to the competitive nature of the marketplace. One such example is that of Lipitor — for which generics have saved all involved an estimated $7 billion per year. In addition, many generic prices are so low that thousands of stores across the country offer them to consumers for four dollars or even for free.

The most effective way to continue to keep prescription drugs affordable for patients is to increase competition. Millions of patients and the entire healthcare system would benefit from streamlining and expediting the approval process so that more generics can reach the market sooner. As the newly- released report from Matrix Global Advisors shows, there are opportunities for FDA to facilitate pharmaceutical competition. To continue to save American patients and the healthcare system trillions of dollars in drug costs, GPhA believes that policymakers should take the following key steps to increase generic competition:

First, in partnership with the industry, Congress should encourage the timely FDA review of the more than 3,000 generic drug applications that have been filed with the agency. Once those are approved, consumers will have more options than ever, and that will help drive down prices.

Second, Congress should review the abuse of programs designed for protecting patient safety, such as REMS, that some brand companies are misusing as a way to keep generics out of the market. This practice lowers competition and keeps prices high. A recent study by Matrix Global Advisors estimates that countering this misuse could save the health system $5.4 billion.

Finally, Congress should encourage the FDA to increase competition for cutting edge biologics by enacting regulations for biosimilar approvals and supporting a naming policy that encourages competition from safe, more affordable biosimilar medicines.

Taken together, these policies would provide American consumers with more choices, greater access to medicines, and billions of dollars in increased generic savings.

About GPhA

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 86 percent of the prescriptions dispensed in the U.S. but consume just 27 percent of the total drug spending. Additional information is available at www.gphaonline.org. Follow us on twitter: @gpha.