AAM report: Generic savings totaled $338B in 2020

Generics and biosimilar drugs saved the U.S. healthcare system $338 billion in 2020, according to The Association for Accessible Medicines’ topline findings from its forthcoming ‘2021 Generic Drug and Biosimilars Savings in the U.S.’

Ninety percent of the prescriptions filled in the United States in 2020 were filled by generic drugs, but those prescriptions accounted for only 18% of the country’s spending on prescription drugs, according to the study.

AAM pointed out that in addition to the systemic savings that the generic drug industry provides, generic drugs create significant out-of-pocket savings for individual patients at the pharmacy counter. Ninety-three percent of generic drugs have copays under $20 (as compared to 51% of brand-name drugs) and the average generic copay is $6.61 compared to an average out-of-pocket cost of $55.82 for brand-name drugs.

The market for biosimilar drugs continued to grow with three new approvals and six product launches in 2020. Even though biosimilar volume share of the molecules where they compete was less than 30%, biosimilar drugs saved $7.9 billion dollars in 2020 alone, more than tripling the $2.5 billion saved in 2019.

[Read more: AAM report: Generic savings totaled $313B in 2019]

The study also found that the introduction of oncology biosimilar medicines has cut the growth rate of oncology spending roughly in half since 2019. This reduction in growth, along with continued use of generic cancer medicines, contributed to a total of $18 billion saved on oncology medicines in 2020.

As the cost of prescription drugs has been a growing concern for voters in recent years, AAM noted that these findings reinforce the critical importance of the generic and biosimilar drug industry to America’s patients.

“The generic drug industry is absolutely central to the affordability of health care in America, accounting for nine out of ten prescriptions. In the face of a pandemic that has upended life around the globe, generic and biosimilar medicines have been a constant, providing safe, effective and affordable treatments to the millions of patients who depend on them,” said Dan Leonard, president and CEO of AAM.

[Read more: AAM report: Medicare plans lag in adopting new generics] 

“Biosimilars are an essential part of the effort to provide affordable and effective medicines to every patient who needs them,” said Christine Simmon, executive director of the Biosimilars Council and senior vice president at AAM. “Although biosimilars are projected to save the nation $133 billion by 2025, this will only occur if policymakers take steps to encourage greater biosimilar adoption.”

Additional highlights from the 2021 savings report include:

• Medicare recorded $109.6 billion in generic and biosimilar savings in 2020.
• Medicaid saved $53.8 billion in 2020 through the use of generics and biosimilars
• 93% of generic drugs have copays under $20 (compared to 51% of brand name drugs)
• The average generic copay is $6.61 compared to an average out-of-pocket cost of $55.82 for brand name drugs.

As in the past, this year’s report was developed by analyzing independent research from IQVIA to quantify how much money America's patients and the U.S. healthcare system are saving because of generic and biosimilar alternatives to brand-name prescription and biologic medications.