Analysis Reinforces Savings Available through Increased Use of Generics

(Washington, DC)—An analysis released today by Consumers Union finding Medicare beneficiaries could save thousands of dollars on the cost of prescription drugs by choosing generic alternatives through their Medicare prescription drug plans only adds to the growing body of evidence about their cost-savings value and underscores the need for policymakers to expand access to generic drugs, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

Consumers Union’s new analysis, “Medicare Prescription Drug Benefit: Beneficiaries Can Lower Out-of-Pocket Costs While Getting Safe and Effective Drugs,” examined drugs from five commonly used drug categories used to treat high cholesterol, high-blood pressure, post-heart attack care, arthritis pain, and depression. The analysis found that Medicare beneficiaries choosing lower-cost generic alternatives could save between $2,300 and $5,000 per year on their prescription drug costs. In addition, the analysis found that beneficiaries choosing lower-cost generic alternatives could delay or eliminate the gap in Medicare Part D coverage known as the “doughnut hole.”

PCMA believes this latest analysis is more good news for Medicare beneficiaries and that these data are only the latest findings that highlight the cost-saving potential of clinically proven generic drugs:

In January, researchers from the Centers for Medicare & Medicaid Services found that prescription drug spending in 2004 slowed to its lowest growth rate in the past 10 years, rising 8.2 percent. Two of the chief reasons cited by CMS researchers for the slowdown in prescription drug spending were increased use of lower-cost generic drugs and mail-service pharmacies.
Last month, PCMA’s own analysis found seniors enrolled in Medicare prescription drug plans are seeing average savings on generic drugs ranging from 52 percent at retail pharmacies to 66 percent for generics dispensed through mail-service pharmacies. Generics typically cost 30 to 60 percent less than their brand-name counterparts.

These data also underscore the need for policymakers to work to expand access to generic drugs. Bipartisan legislation introduced recently by Senators Debbie Stabenow (D-Mich.) and Trent Lott (R-Miss.), “the Lower PRICED Drugs Act,” has the support of a broad group of organizations representing consumer and seniors’ groups, small businesses, Fortune 500 employers, health insurers, and PBMs.

This year, $11 billion in drug sales are expected to lose patents, with generic alternatives becoming available for at least 15 branded drugs. In total, over the next five years, an estimated $50 billion in brand-name drugs will lose patent exclusivity, providing further opportunities for greater cost savings for consumers and purchasers.

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmacy benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605