Generic Drugs' Effect on Health Costs Unclear, GAO Says

Generic drugs were substituted for brand-name drugs 93% of the time in 2010, but whether increased use of generics is actually saving money is up for debate, according to the Government Accountability Office (GAO).

Studies looking at cost savings from use of generic drugs "had mixed results regarding the effect of using these generics, in that some found they raised healthcare costs, while others found they led to cost savings," wrote the authors of a GAO report released Thursday.

The GAO report was requested by Sen. Orrin Hatch, co-author of the 1984 Hatch-Waxman Act, which paved the way for a major increase in the number of generic drugs. In the early 1980s, there were generic versions of just 35% of the top-selling drugs with expired patents; by the late 1990s, almost all of them had generic versions.

Prescription drug spending more than tripled from 2001 and topped $307 billion in 2010, making up 12% of all healthcare spending in the country, the GAO researchers wrote.

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Source: MedPage Today