Prescription drug costs represent nearly 10 percent of total health care expenses for Americans, pushing the issue to the forefront of national health care policy conversations. With rising costs an ongoing concern, a study released today in JAMA Network Open , published by the American Medical Association, shows the impact that introducing generic medications to the marketplace can have on bringing down prices.
In a recent study, George Mason University Associate Professor Hong Xue, PhD , in the College of Health and Human Services Department of Health Administration and Policy (HAP), and colleagues including doctoral students Shuo-yu Lin and Weiyu Zhou, evaluated the impact of ending market exclusivity for brand-name statin drugs on generic statin purchases. Statin drugs are used to lower cholesterol to prevent and treat cardiovascular disease, a leading cause of death for men and women across racial and ethnic groups.
“Generic competition is effective for reducing prescription prices in the United States. Encouraging generic competition and access to generic medication should be considered as important regulatory policy options to reduce health expenditures,” according to Xue and Lin. On average, more than 21 million statin prescriptions were purchased annually during the study’s 17-year period. After the market introduction of the generics, brand-name statin purchases decreased by 90.9 percent nationally and 27.4 percent individually. The study found that average annual cost savings per individual were $370.0 for private insurers, $281.0 for Medicare, $72.34 for Medicaid, and $211.9 for out-of-pocket, translating to an $11.9 billion savings for the US.
This study is the first to comprehensively assess the economic impact of generic competition for all available statins. The research team used a difference-in-difference design with data drawn from the annual nationwide Medical Expenditure Panel Survey for the years 2002 to 2018.
The Center for Drug Evaluation and Research estimates that the average generic drug price is 49 percent of the corresponding brand-name drug. When six or more generic competitors exist, the amount saved is up to 95 percent. The authors note that there were seven brand-name statin drugs available prior to the end of market exclusivity. The study tracks market-entry of five generic statins.
The transdisciplinary research team included Alison Evans Cuellar, PhD (HAP) and Weiyu Zhou from Mason’s Department of Statistics; Kyle Baumann, DO, from the University of Minnesota Medical School; and Chenxuan Zhou, Master of Finance, from the Virginia Commonwealth University School of Medicine.
About George Mason University
George Mason University is Virginia's largest and most diverse public research university. Located near Washington, D.C., Mason enrolls 39,000 students from 130 countries and all 50 states. Mason has grown rapidly over the past half-century and is recognized for its innovation and entrepreneurship, remarkable diversity and commitment to accessibility. For more information, visit https://www2.gmu.edu/ .
About the College of Health and Human Services
George Mason University's College of Health and Human Services prepares students to become leaders and shape the public's health through academic excellence, research of consequence, community outreach, and interprofessional clinical practice. George Mason is the fastest-growing Research I institution in the country. The College enrolls more than 1,900 undergraduate and 1,300 graduate students in its nationally-recognized offerings, including: 6 undergraduate degrees, 13 graduate degrees, and 6 certificate programs. The college is transitioning to a college of public health in the near future. For more information, visit https://chhs.gmu.edu/ .
JAMA Network Open
10.1001/jamanetworkopen.2021.35371
Data/statistical analysis
Not applicable
Trends in utilization and expenditures for brand-name statins following introduction of generic statins in the United States, 2002-2018.
22-Nov-2021