Avalere analysis finds 57% of covered generic drugs not on Part D generic tiers in 2025
WASHINGTON, DC (December 10, 2024) – The Association for Accessible Medicines, the trade association for generic and biosimilar manufacturers, commented on an analysis released by Avalere showing that Medicare plans continue to increase patient costs for generic medicines.
“Despite recent changes designed to limit Medicare beneficiary out-of-pocket prescription costs, Medicare plans continue to deny patients the full value of lower-cost generics,” said John Murphy III, President and CEO of AAM. “Part D plans continue to place less than half of all generic drugs on generic formulary tiers. Putting these low cost medicines on brand tiers with higher copays forces patients to pay more, even as generic prices fall. AAM encourages the incoming Administration and Congress to ensure PBM formulary practices align with the best interests of Medicare beneficiaries.”
Avalere has analyzed Plan D sponsors and the distribution of generic prescription drugs on the various tiers from 2016 to 2025. Over this time, the percentage of generic prescription drugs placed on Medicare Part D generic tiers has declined from 65% in 2016 to 43% in 2025. Not only can this result in higher costs for patients, but placement of generics on brand tiers can result in beneficiary confusion.
In the last ten years, the use of generic drugs and biosimilar medicines has saved patients and the U.S. healthcare system over three trillion dollars, but far more savings are possible. In 2023 alone, the prescribing of these lower cost products saved the Medicare program $137 billion, or $2,672 per beneficiary.
In November 2024, the Centers for Medicare and Medicaid Services proposed increasing its review of Part D plan formulary design and drug utilization management practices to assess if “further programmatic actions within CMS’s current statutory authority are necessary to prevent Part D formularies from excluding or disfavoring coverage of generics, biosimilars, and other lower cost drugs.”
Murphy added, “There is an immediate need for CMS to follow through with this review and for Congress to ensure beneficiary access to lower cost generic drugs and biosimilars. We encourage the current Administration and the incoming Trump Administration to focus on this as a key driver for significant savings for seniors.”
For media inquiries, contact the Communications department at media@accessiblemeds.org.
About AAM
The Association for Accessible Medicines, your generics and biosimilars industry, is driven by the belief that access to safe, quality, effective medicine has a tremendous impact on a person’s life and the world around them. Generic and biosimilar medicines improve people’s lives, improving society and the economy in turn. AAM represents the manufacturers of finished generic pharmaceuticals and biosimilars, manufacturers of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals are 90 percent of prescriptions dispensed in the U.S. but only 13.1 percent of total drug spending.
About the Biosimilars Council
The Biosimilars Council, a division of the Association for Accessible Medicines (AAM), works to ensure a positive environment for patient access to biosimilar medicines. The Biosimilars Council is a leading source for information about the safety and efficacy of more affordable alternatives to costly brand biologic medicines. Areas of focus include public and health expert education, strategic partnerships, government affairs, legal affairs and regulatory policy. More information is available at www.biosimilarscouncil.org.
