The generics pharmaceuticals in US has saved more than $734 billion of the country's healthcare system through accessibility of affordable medicine in the last decade (1999-2008), as per a study conducted by the Generic Pharmaceutical Association (GPhA).

In 2008 alone, the generic pharmaceutical segment has helped the country to save approximately $121 billion, which shows promising growth in tandem to the earlier predictions. The association released the study based on data from the leading market intelligence firm IMS Health, as part of its year long celebration of the 25th anniversary of the 1984 Drug Price Competition and Patent Term Restoration Act, commonly called the Hatch-Waxman Act.

Kathleen Jaeger, president and CEO, GPhA, said, "In 1984, it was predicted that the Hatch-Waxman Act would save our country $1 billion in the first decade. Now, generic medicines save more than that every three days. These savings are truly remarkable and demonstrate the real value of generic medicines for consumers and the entire health care system."

In the mid 1990s, the Congressional Budget Office released an analysis showing that in 1994, the 10th anniversary of the enactment of Hatch-Waxman, annual savings from generics had reached approximately $8 billion to $10 billion. The new data shows that by 1999 - 15 years after Hatch-Waxman became law - generics were generating $49 billion in annual savings.

From 1999 to 2004, generic savings increased steadily at an annual rate of between 3 per cent and 10 per cent, with savings growing from $49 billion in 1999 to $69 billion in 2004. Beginning in 2005 and continuing through 2008, the savings generated by generics grew at a double-digit annual pace, with the highest growth rate coming in 2008 when the savings topped $121 billion, a full 20 per cent ahead of the prior year.

The higher growth rates seen during the more recent years of the study were driven by two factors viz., an increase in the overall percentage of generic utilization from 61 per cent entering 2006 to 69 per cent by the close of 2008; and the loss of patent protection by several brand-name blockbusters, including Pravachol, Ambien, Fosamax, Zoloft and Zocor.

The analysis also found that generics introduced prior to 1999, generated approximately $552 billion of the $734 billion in total savings. Savings generated by generic products introduced between 1999 and 2008 provided an additional $182 billion in savings during the period, with nearly half of this coming from 2006 to 2008. Approximately 60 per cent of the $121 billion in savings achieved in 2008 came from generics approved over the past 10 years.

Treatments in the therapeutic categories of metabolism, cardiovascular, anti-infectives, and central nervous system (CNS) have experienced the highest growth in savings as a result of generic utilization. More than 57 per cent of the total savings between 1999 and 2008, totalling some $420 billion, came from the cardiovascular and CNS categories. Generic metabolism and anti-infective drugs combined to account for an additional 19 per cent of the savings. In total, these four therapeutic categories resulted in overall savings of $561 billion, or 76 per cent of total savings.

Generic pharmaceuticals filled 69 per cent of prescriptions dispensed last year in the US but consumed just 16 per cent of the total drug spending.

Commenting on the allegations against the landmark Hatch-Waxman Act, Jaeger said, "Among the flawed arguments during the debate over Hatch-Waxman in 1984 was the claim that generic competition would harm innovation. In fact, since the enactment of Hatch-Waxman generic competition has helped unleash unprecedented investment in new drug research and development, which in turn has led to a period of unparalleled pharmaceutical innovation."

GPhA noted that the study is predictive of the greater savings that could be achieved in future years through the implementation of initiatives to encourage greater use of FDA-approved generic medicines in publicly-funded prescription drug benefit plans, such as Medicaid, Medicare and other federal/state programmes. For instance, a one per cent increase in the generic utilization rate in the Medicaid programme could yield approximately $490 million in added annual savings.

In early 2009, GPhA commissioned IMS Health to conduct an analysis of the savings created by generic utilization from 1999 through 2008. The principle objective of the analysis was to quantify the total cost savings generic pharmaceuticals provide to the overall US health care system. The analysis included only those pharmaceutical molecules for which generic and brand products were available to consumers and prescribers. The analysis utilized IMS data of sales and volumes for both branded and generic products to estimate cost savings.