WASHINGTON, DC— Today, Ranking Member Henry A. Waxman released a statement on the new IMS Health study published by the Generic Pharmaceuticals Association (GPhA), which found that generic drugs saved consumers over $1 trillion dollars over the past decade, with $193 billion saved in the last year alone.
“As this study demonstrates, the Waxman-Hatch Act has been a resounding success,” said Rep. Waxman. “In 1984, we knew the law would produce significant savings, but we never dreamed they would be this big. It’s amazing to think that this law has saved consumers over $1 trillion. This is good news for patients and their families, for insurance companies, and for taxpayers. And it shows how government can work to protect American families.”
The study found that generic drug savings are holding down healthcare spending. Generic drugs have saved consumers $1.07 trillion from 2002 to 2011. Future savings from generic drugs are projected to climb even higher. In 2011 alone, use of generics saved over one billion dollars every other day, totaling $193 billion for the year. The study also found that nearly 80% of the drug prescriptions written in 2011 were dispensed using generic versions of their brand name counterparts.
The 1984 Drug Price Competition and Patent Term Restoration Act, also known as the Waxman-Hatch Act, is credited with creating the generic drug industry as we know it today. The Act streamlined the generic drug approval process, resulting in lower consumer costs and greater incentive for innovator companies to develop new brand name drugs. While originally projected to save one billion dollars in its first decade, Waxman-Hatch ultimately saved $8 billion to $10 billion in each of its first ten years and now saves nearly one billion dollars every 18 days.
Health care reform will bring even more drug savings through the elimination of the Medicare prescription drug coverage gap, known as the “donut hole.”