HHS brief examines factors affecting generic use and cost savings

January 25, 2011

With several blockbusters going off patent, Secretary Kathleen Sebelius of the U.S. Department of Health and Human Services asked the office of the Assistant Secretary for Planning and Evaluation to ?examine barriers to and identify opportunities for increasing generic use.?

The use of generics has jumped from 57% of all drug products prescribed in 2004 to almost 75% in 2009. With several blockbusters going off patent, Secretary Kathleen Sebelius of the U.S. Department of Health and Human Services (HHS) asked the office of the Assistant Secretary for Planning and Evaluation (ASPE) to “examine barriers to and identify opportunities for increasing generic use.”

The December 1, 2010, ASPE paper, “Expanding the Use of Generic Drugs,” evaluated generics from 3 perspectives: state laws on substitution, factors related to availability of generics, and the behaviors toward and perceptions of generics by prescribers and consumers.

In studies cited, savings are affected by the variation in state legislation directing when pharmacists can or must dispense generics. One investigation of Zocor and Lipitor found that in states that require patient consent, prescription costs for Zocor and generic simvastatin combined were higher than the average in states not requiring consent. Six months after the patent expiration, the ASPE report says, “98% of simvastatin prescriptions were written for generic simvastatin in states that did not require patient consent.” Less than a third of prescriptions “were filed by generic simvastatin in states requiring consent.”

The ASPE brief also stated that availability and speed at which generics enter the market affect their use. Both “pay-for-delay” (a tactic by brand-name companies offering financial settlement to delay a generic competitor from market entry), and the now 27-month median time for FDA approval are impediments to generic availability.

Finally, ASPE said that surveys of consumers report that Americans generally believe generics are safe and a benefit to cost savings, but they are “less likely to prefer buying and taking generics.” Studies of the prescribing behavior of physicians found that doctors refer to drugs by the brand name “out of habit” and that this translates to the unintentional prescribing of branded products.

In light of unprecedented levels of patent expirations, the brief forecasts significant potential for savings with generics. According to ASPE, consumer and provider education, eliminating the pay-for-delay, and speeding the regulatory review process are necessary to promote acceptance and availability that can increase drug-expenditure savings for public and private insurers.

The study is available from HHS at http://aspe.hhs.gov/sp/reports/2010/GenericDrugs/ib.shtml