US celebrates 30 years of rapid generics growth
October 01, 2014 - 30 years ago, when President Ronald Reagan signed the legislation that would lay the basis for today’s US generics industry, even the law’s biggest fans never guessed quite how successful it would be.
One estimate – optimistic at the time -- was that the new legislation, commonly known today as the Hatch Waxman Act, could save Americans a total of USD 1 billion.
A study published this year by the IMS Institute for Healthcare Informatics showed that the use of generics saved US patients and payors nearly USD 240 billion in 2013 alone – putting the original forecast into the same league as the former IBM head who (allegedly) said there would be a total world market for “maybe five computers”…
A new report, compiled by US trade association GPhA, concludes: “In the past 30 years, the generic drug industry has put life-saving and life-changing medicines in reach for millions of Americans. The savings delivered each year are more than 200 times greater than predicted.
“The 30th anniversary of the Hatch-Waxman Act marks a pivotal point in the history of the pharmaceutical industry. Looking back, generics have a remarkable story of increased access and lowered costs. Looking forward, the future is bright as the industry embraces the emerging opportunities of a global marketplace, an aging population, record expansions in health coverage, and the next frontier of affordable medicines: biosimilars.”
The report points out that, while generic drugs existed in the US prior to the Hatch-Waxman Act, the process was “woefully” underused, with approved generic versions in 1980 for only 15 of 150 off-patent drugs.
The US generic penetration rate – the volume of generic sales as a proportion of total prescription sales – has risen steadily ever since, from 10% in the early 1980s to an astonishing 86% today, well ahead of most other global markets. The US today represents the single largest global market for Sandoz.
The report adds: “By any measure, the Hatch-Waxman Act has been a resounding success in achieving the goals of improving patient access to affordable medicines and providing savings to the healthcare system while (simultaneously) promoting innovation of new branded pharmaceuticals.
“As a result, the US both has the most successful generic drug market in the world and remains the world’s leader in new drug innovations. Against the prolific success of the Hatch-Waxman Act in enhancing public health, incentivizing new drug development and providing system-wide economic sustainability, it is critical that we maintain this crucial balance as the next generation of new and innovative medicines enters the market.”