Recently, the Portland Press-Herald newspaper published two opinion pieces – an editorial and an op-ed – that promote Making Health Care Work for Maine, a package of bills in the state legislature that would give the state government tremendous power over the prescription drug market. Unfortunately, the central arguments of both pieces are rooted in inaccurate information.
We can all agree that high drug prices are a vexing problem worthy of thoughtful policy solutions. However, these opinion pieces paint all prescription drugs – both brand-name and generic – in broad strokes, claiming all of them are raising prices year-over-year. This overly simplistic argument misses the fact that generic medicines are delivering significant savings for Mainers as well as the overall health care system.
Generic drug prices consistently decline as a result of intense competition. In 2019 alone, the use of generic medicines saved nearly $1.2 billion in Maine. Nationwide, generics saved patients $313 billion in 2019.
Overall, generics account for over 90% of all prescriptions, yet are responsible for just 20% of total spending on medicine. That’s why it’s concerning that the editorial says, “The prices of the most commonly used prescription drugs rise every year.” It’s just not true. Generics are not the problem with prescription spending – and Maine’s own data bears this out.
While generics are the most commonly prescribed medicines, it is brand drugs that are the most costly to the state.
According to the Maine Health Data Organization (MHDO), every one of the 25 most costly prescriptions in the state is a brand-name drug. Not a single generic was anywhere near the top.
Let’s get some perspective: Total spending on the drug that was Number 25 on MDHO’s list of the costliest medicines in Maine was $12.5 million – total spending on the most costly generic medicine for Maine does not come close to one-third of the spending on the brand drug that occupies the position as the state’s 25th most costly medicine.
The reason generics are so much less expensive goes back to simple market economics: More competition and more choices bring down prices. That is why it was disappointing to see the author of the recent Press Herald op-ed conflate the price increase of a single generic version of Prozac as representative of the generic market. In fact, according to independent data compiled by IQVIA, the list price of the brand-name version of Prozac grew from $476 in 2015 to $811 in 2021. Over the same time period, the average list price of the 36 generic competitors declined from $34.15 to $27.78.
While the op-ed author is correct to note that one generic version increased in price one time, the author neglects to share that the overall price of all generic versions declined by more than 18% while the brand drug price skyrocketed.
Despite the overwhelming evidence of the benefits of generics, the Making Health Care Work for Maine package would target generics with new regulations and price controls that could counteract the benefits of these medicines. By giving the government the power to set prices, it risks chilling the competition that drives savings. Additionally, it would be unconstitutional because it violates the Commerce Clause of the U.S. Constitution.
Simply put, generics are the solution to combatting high drug prices – not the problem. Rather than stymieing competition, we should work to expand access to generics so more people can realize the incredible savings they provide. As the authors note, the people of Maine deserve reliable, affordable prescription drugs. Generics are the way to make that a reality.
By Dan Leonard, President and CEO, Association for Accessible Medicines