White House Report Shows Increase in Generics Competition Saved Americans $26 Billion
A White House report released at the end of October indicates that deregulation efforts made by the administration have saved Americans more than $26 billion on generic prescription medicines over the past 20 months.
The report, which was issued by the Council of Economic Advisors, pointed to changes in the approval process at the U.S. Food and Drug Administration (FDA) in the approval process of generic drugs has led to greater competition in the marketplace, which has lowered the costs of the medications. In its summary, the Council said that the annual price growth for prescription drugs has slowed since January 2017.
In its report, the Council pointed to the “American Patients First Blueprint” released in May that was aimed at lowering pharmaceutical prices. Part of the Trump White House’s call to action to lower prices included the increase of competition. In its summary, the Council said that will “further enhance the goal.”
The White House focuses primarily on the approval of generic drugs. The council noted that entry of generic drugs into the marketplace is much quicker than brand-name drug entry.
An editorial in the Wall Street Journal said that since the inauguration in 2017, the Trump FDA has approved 1,617 generic drugs, an average of 81 per month. That astonishing amount of approvals is a 17 percent over the previous 20 months, the Journal’s editorial team said.
In its editorial, the Journal praised the efforts of FDA Commissioner Scott Gottlieb for “putting priority on drugs where competition is limited.”
The Council said in its report that the increase in generic drug approvals has taken place “despite the fact that the number of brand-name drug patent expirations — necessary precursors for generic entry — has declined during this period.” The Council further noted that nine of 10 prescriptions sold in the United States are for generic drugs.
“Because they are so much cheaper than their brand name counterparts, they constitute only about 23 percent of prescription drug spending, reflecting the enormous savings made available to consumers,” the Council said in its report.
President Trump has been sharply critical of prescription drug prices and has made lowering those prices a central part of his administration. This fall, the White House announced a plan to revamp Medicare and the way it pays for high-cost drugs. Over the summer Trump famously challenged Pfizer over its planned drug increases and got that company to temporarily defer raising the prices on about 40 brand-name drugs. The company earlier this week announced its plans to increase those prices in January.
While the White House report was rosy for generic drugs, when it comes to branded drugs, the numbers are different. The Associated Press released an analysis that noted price increases for brand-name drugs have slowed, but there have been few significant price cuts.