Healthcare Supply Chain Association: Generic drug competition drives down costs

The amount of generic rivals available in relation to a brand name treatment can affect drug costs, according to a report in the Journal of the American Medical Association.

Researchers identified all generic drugs approved since 1984 from the Food and Drug Administration to analyze how the number of generic drugs associated with brand name treatments affects the drug market.

The study found that a minimum of four approved generic drugs are needed to cause a price reduction of about 60 percent.

Todd Ebert, RPh, CEO and president of the Healthcare Supply Chain Association, believes the JAMA report proves that competition in the drug market is essential to prevent price spikes.

Mr. Ebert highlights the fact that most drug treatments on the market fall short of having four generic options available. Only two-thirds of cancer drugs compete with one or more generics.

He urged for more action to increase competition in the generic market and ensure access to crucial medications. The HSCA urges Congress to order the Food and Drug Administration to expand its priority review to generic drugs with two or more manufacturers. Currently, the FDA only prioritizes approvals for generics with one manufacturer.

"The JAMA report underscores the urgent need for Congressional and FDA action to expand priority review beyond sole source products. Doing so will help foster a robust generic drug marketplace that keeps prices in check and preserves patient and provider access to essential medications," said Mr. Ebert.

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