On September 6, 2023, the Association for Accessible Medicines (AAM) released its 2023 U.S. Generic & Biosimilar Medicines Savings Report highlighting the significant economic contributions of generic and biosimilar medicines. Notably, the U.S. healthcare system, including patients, employers and taxpayers, saved $408 billion in 2022 by using FDA-approved generic and biosimilar drugs, per the AAM’s report.
According to the findings, more than 90% of all prescriptions filled in 2022 were for generic or biosimilar drugs, despite these medications accounting for less than 18% of the total prescription drug expenditure and a mere 2% of the overall U.S. healthcare spending. Further, generics had copays under $20 in 92% of cases, compared to 53% for brand-name drugs, with an average copay of $6.16 versus $56.12 for brands.
While the report notes these savings, it also reports some hurdles that threaten the future sustainability of generic and biosimilar competition. For example, the report points out that nearly 60% of generics in Medicare are not on generic tiers, and many Medicare Part D plans have chosen to place generics on higher tiers with higher copays in recent years, driving up patient spending. Further, the report notes that new generics and biosimilars continue to face challenges to adoption in critical disease states.
The report also highlights the increasing impact of a select group of biologic and specialty medicines, comprising less than 2% of all prescriptions but responsible for over half of all spending in prescription drug costs. Biosimilars, cost-effective alternatives to these brand biologics, have been instrumental in cost reduction. Biosimilars enter the market at significantly lower prices, with the average biosimilar price being over 50% lower than the brand price at the time of their launch. Additionally, biosimilar competition has compelled brand biologics to adjust their prices, resulting in substantial savings exceeding $9.4 billion for patients in 2022.
Additional key findings from the AAM’s 2023 Savings Report are as follows:
- Total Generic and Biosimilar Savings for Past 10 years: more than $2.9 trillion
- Total Generic and Biosimilar Savings in Medicare for 2022: $130 billion
- Total Generic and Biosimilar Savings in Commercial Plans for 2022: $194 billion
- Generics represent 90% of prescriptions filled but only 17.5% of prescription drug spending
- Generics represent less than 2% of all health care spending