Generic Drugs Can Save Medicare 1 Billion Annually, Boon For Seniors

Going full blast on purchasing generic drugs on 29 of the most expensive brand-name combination drugs would have saved Medicare close to 1 billion dollars in 2016, according to a new study.


The study reports that drug makers prevent generics from taking over by extending their patents and creating new brand-name combination products. Manufacturers do this at the end of a drug’s patent life and shortly before the generic version of the single drug enters the U.S. market.


Manufacturers are successful in this venture because the USFDA (U.S. Food and Drug Administration) has been increasing approvals of combo drugs from an average of 1.2 approvals per year in the 1980s to 7 per year in 2012.


The study concludes, “The FDA continues to approve new cardiovascular drugs, however, there is little clinical evidence that the new brand-name products provide any benefit over drugs approved years prior with generic equivalents”.



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Generic Drugs: Price Differential Of Brands Is Incredible


Researchers compared three different sets of brand-name combination drugs:


  • Ones that had generic substitutes at identical doses,
  • Generic alternatives with different doses,
  • Therapeutically equivalent generic substitutes.


The list prices of the 29 branded drugs increased anywhere from 35% to 1,759% from 2011 to 2016 while generic prices remained flat!

Substituting one brand name for the generic equivalent alone would have saved the Medicare Part D program $189.1 million in 2016, researchers found.


For example, a brand drug, Edarbyclor, used for high blood pressure, was priced at $5.36 per pill in 2016. Its generic equivalent, if allowed on the market, would have cost, get this folks, 94 cents per pill!

Medicare would have saved 11 million dollars. That’s your hard-earned taxpayer money at work, indeed.


Drug companies defend their prices, claiming legitimate clinical reasons to use a specific drug rather than using the generic. The research study proves otherwise.


Generic Drugs: Skyrocketing Brand Drug Prices

Branded drugs are the primary driver of the skyrocketing price of prescription drugs.


Drug prices are expected to increase again by 4.92% next year, according to Vizient, a group purchasing and consulting company. Moreover, 80% of the projected price inflation comes from drugs with no competition.

These drug costs represent some of the fastest-growing costs in providers’ balance sheets over the past several years.

Promoting generic substitution through education and better substitution policies may help decrease brand drug price hikes, according to the study.




Drug companies are a powerful lobby on Capitol Hill, and so getting generics onto the market will be difficult.


One solution offered by the FDA is to require comparative trials of generics versus brands, rather than to a placebo.

This would actually be a more valid comparison. In reality, generally, brands offer no additional benefits compared to generics, they just end up costing a lot more money.

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