Americans may have overspent billions on brand-name drugs, study finds
- Americans may be overspending billions of dollars on brand-name drugs even when a generic copy is available in the same class with the same indication, according to a new study published in JAMA Internal Medicine.
- Researchers claimed physician substitution of generics with similar indications for branded drugs could have saved $73 billion over the two-year period between 2010 and 2012. Almost one-third of that “excess expenditure” hit consumers’ wallets through out-of-pocket payments.
- The findings, however, were extrapolated from a national survey of roughly 107,000 individuals and their reported use of prescribed meds.
- Statins, atypical antipsychotics, and proton pump inhibitors accounted for much of the overspending.
Generic drugs are a significant cost-saver over branded meds and utilization rates have steadily increased, leading to further savings. Currently about 88% of all prescription medications dispensed are generics and their use saved $254 billion in 2014, according to IMS and the Generic Pharmaceutical Association.
But physicians could be prescribing even more generics, according to the JAMA study. Researchers focused particularly on doctors prescribing branded drugs even when a generic copy of a similar branded drug was available. This resulted in higher spending, or “excess expenditure” as defined by the study, compared to what individuals would have spent if all were prescribed the relevant generic.
Nearly 10% of total expenditures on prescription drugs by individuals included in the survey could be classified as overspending under the study’s definition.
"As this study shows, less than optimal therapeutic substitution is a missed opportunity for patient and health system savings. At a time when patients, payors and others are seeking health cost relief it is more important than ever to increase generic prescribing and utilization," said Chip Davis, CEO of the Generic Pharmaceutical Association (GPha).
In letter in the same issue of JAMA Internal Medicine, other researchers found roughly one in ten doctors still believe generic drugs are less effective than their corresponding brand-name versions. Only 70% of physicians surveyed preferred prescribing a generic drug over a branded drug.
Statins and overspending
Statins are a good example of the issues surrounding generic prescribing. There are a number of generic statins available in the U.S., including most recently generic Crestor. However, some physicians continue to prescribe brand-name options that cost more than twice as much.
In a study of almost 2,500 MA-based physicians in a Medicare prescribing database in 2011, 37% received some sort of industry payment (mainly industry-sponsored meals). For every $1,000 in total payments from companies to doctors, brand-name statin prescribing rates increased by 0.1%.
Viewed together, the studies and research letter suggest physicians aren’t always jumping to prescribe generics even if higher utilization could result in substantial savings. But increased therapeutic substitution within drug classes could have other implications for patients, such as differing side-effect or potency profiles, which could motivate some doctors to continue prescribing brands.
Other doctors disagree. "Unless I have a compelling reason to prescribe a brand (studies showing clinical differences in effects, or significant numbers of patients telling me they notice a difference), I write generics [prescriptions," said Barry Mennen, a Washington, DC-based physician. "With statins, I would need a reason to write a brand."