No Generic Solution for America's Medical Needs

No Generic Solution for America's Medical Needs

07.26.11 | By Kate Connors

A recent article lauding a so-called "looming wave of new generic pills," like many similar articles, fails to paint the bigger picture: that generics, while an important part of the healthcare system, ultimately play a limited role for patients.

As I've said before, nearly 80 percent of prescriptions in the U.S. are filled with generics, making lower-cost options available to patients. And, of course, there would be no generics without the original hard work done in the past by biopharmaceutical research companies.

But let's take a step back and look at the prescription medicine ecosystem. It's an unusual part of the healthcare system: after all, there are no generic hospitals or generic doctors. But there are with prescription medicines. And it's a matter of balance. In the U.S. - the world leader in medical innovation, not coincidentally - we have a system that provides the necessary incentives for future medical discovery through branded medicines, while later offering long-term affordability for patients through generics. Not to be repetitive, but again, the latter isn't possible without the former.

Within our system, there is tremendous competition, both before generic entry and, even more so, after.

Don't get me wrong, our system isn't perfect. For example, patients generally pay more out of pocket for their prescription medicines than other parts of the system; for example, privately insured patients pay for more than one-quarter of prescription costs out of pocket, compared to 4 percent for hospital stays.

But our system also offers tremendous value - and this too often gets overlooked in articles about generics. Medicines actually account for a small share of healthcare spending - ten cents out of every dollar. And yet the benefit of that spending is significant, with life expectancy now surpassing 80 years for women and 75 years for men, inspiring former FDA Commissioner Mark McClellan to proclaim that "new drugs are no small part of this medical miracle."

How? Well, for example, medicines contributed to a 45 percent decline in heart attack deaths and heart failure between 1999 and 2005. And improvements in treatment have helped cut cancer death rates in half.

I've said before that innovation is cyclical, but it is also cumulative. Each medical advance is a stepping stone to the ultimate goal: a cure. If we're going to reach that goal, we need the sustained, long-term vision to continue to support innovation, and not just the short-sighted tendency to celebrate generics.

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