In 2018, generic prescription drugs saved $293 billion for the U.S. health care system overall, with $1.9 trillion saved over the past 10 years. The availability of safe, effective and affordable generics means savings for a state’s residents and taxpayers. AAM believes that any policy, federal or state, intended to tackle the high cost of prescription drugs must increase competition—rather than simply shift costs among health care stakeholders.
Unfortunately, many of the solutions proposed at the state level have focused only on “price transparency” or pricing limitations with no recognition of the differences between the brand industry that drives higher prices and the generic industry that drives savings. In addition, some policymakers emphasize isolated price spikes in terms of percentage increase, while neglecting to mention the overall deflationary pricing trend—price decreases—for the vast majority of generic medicines.
Our state policy team educates legislators in every state on the value that generic prescription drugs represent—and how to protect those savings.
- Drug Price Transparency. Some state bills rely on percentage price increases alone, which could result in disproportionate burdens on the generics industry and ultimately chill competition among manufactures. Decreased competition and increased regulatory burdens could reduce the savings seen by patients and the health care system overall.
- State Drug Take Backs and Other “Shortage” Bills. These mandates place the bulk of the financial burden on generic drugs. They create additional costs on generic manufacturers exclusively related to the normal course of business and undermine the ability of generic manufacturers to remain in low-volume markets.
- Opioid Taxes. Misguided policies don’t take into account that the issue is not the legitimate use of legal medications, but the influx of Chinese fentanyl from illegal pill mills.
- Rate-Setting. These laws may work for public utilities, but not for prescription medicines.
For current active campaigns, view the AAM Action Center.
- Generic Savings by State
- State Legislation: Generic Medicines Save Money for Patients and Taxpayers