Apples for Health- Generics Key To Cost Control

Generics Key To Cost Control

A U.S. House subcommittee heard this week how an increase in generic drug usage would help patients and the healthcare sector save money.

Lawmakers are looking for ways to increase competition between generics and more expensive brand-name drugs.

"A 1 percent increase in generic (drug) utilization would result in nearly $4 billion in savings for consumers," Kathleen Jaeger, president of the Generic Pharmaceutical Association, testified before the House Energy and Commerce Subcommittee on Health.

A December 2004 report by the Department of Health and Human Services found that if consumers bought generic products whenever possible, $17 billion could be saved. Both Democrats and Republicans on the subcommittee agreed utilizing generic drugs is important in reducing healthcare spending, and suggested bipartisan legislation could provide incentives for patients to use generic drugs.

Dr. Scott Gottlieb, senior fellow at the conservative American Enterprise Institute, said as a physician he has gained a deep appreciation of generic drugs. When he prescribed, he said he needed to keep in mind not only what was best for the patient but also what the patient could afford.

"Generic drugs make it possible for me to provide my patients with the lifesaving benefits of safe and effective medicines, while staying within their tight budgets," Gottlieb said.

Generic drugs are less expensive than brands because as copies, they do not pass on as much research and development cost to consumers.

Dr. Jan Berger, chief clinical officer of Caremark Rx Inc. said the No. 1 reason why patients do not take their medicine is because it is too expensive. The flip side is that physicians often do not know the retail price of the drugs they prescribe.

Gottlieb said Aetna has helped the educational aspect with a Web site that allows patients to mix and match similar medications to see how they could lower their overall drug bill. He also advocated widespread adoption of e-prescribing by physicians.

Patents and patent extensions on brand name drugs pose a major problem in increasing the use of generics. The BioShield II Act of 2005 allows pharmaceutical companies to receive patent extensions on brand drugs to retain a market monopoly longer in an effort to help drugmakers recoup an estimated billion-dollar price tag for developing for each new medication.

"Drugmakers are currently pushing for a second BioShield bill that provides the industry an array of patent extensions," Rep. Sherrod Brown, D-Ohio said. "Even I didn't expect the drug industry to sink so low as to exploit the threat of terrorism in pursuit of windfall profits."

Jaeger said the bill does contain promising incentives, such as liability protections, fast track Food and Drug Administration review of drug applications, and extended tax incentives.