GENERIC ENTRY AND THE EARLY IMPACT ON U.S. PHARMACEUTICAL SPENDING
Author(s)
Kanya Shah, MBA, MS, PharmD1, Tyler D. Wagner, PharmD, PhD2, Jon Campbell, PhD2;
1University of Illinois Chicago, Department of Pharmacy Systems, Outcomes, and Policy, Chicago, IL, USA, 2National Pharmaceutical Council, Washington, DC, USA
1University of Illinois Chicago, Department of Pharmacy Systems, Outcomes, and Policy, Chicago, IL, USA, 2National Pharmaceutical Council, Washington, DC, USA
OBJECTIVES: Cost-savings from generic entry and competition are often overlooked in U.S. policy discussions. This research quantified the financial impact of first-time generic entry in 2022 by estimating annual pharmaceutical spending patterns two to three years following loss of marketing exclusivity.
METHODS: First-time generic products launched in 2022 were identified by Abbreviated New Drug Application (ANDA) or New Drug Application (NDA) authorized generic applications in the National Drug Code (NDC) Directory. Exclusions included over-the-counter products, electrolytes/supplements, diagnostic agents, products with generic versions approved before 2022, duplicates, and products without pricing information. Per-package brand and generic list prices were sourced from NAVLIN's Global Pricing and Market Access Database and validated with RED BOOK. Brand net spending and rebates were obtained from SSR Health estimates. Annual volume utilization was calculated using net brand spending in the year preceding generic entry and was held constant to calculate projected generic net spending. In addition to estimating annual spending differences, mixes of generic and brand utilization were calculated to reflect incomplete generic substitution. Results were inflated to 2024 U.S. dollars.
RESULTS: In 2022, 142 ANDA or NDA authorized generic applications were identified in the NDC database. After exclusions, 23 products were eligible for analysis, of which 12 had complete SSR Health net sales data. Assuming complete generic substitution, estimated average annual savings were $530 million per product, yielding total annual savings of approximately $6.4 billion across the 12 products. When assuming standard market adoption in the mix of brand-generic utilization (20% Brand, 80% Generic), the average annual estimated savings per product was $424 million.
CONCLUSIONS: Analyzing a cohort of medicines that underwent first-time generic competition revealed contributions to generic savings and provided insights beyond aggregate market-level assessments, which often reference brand launch prices. Future research will explore additional data and analytics to evaluate trends over time.
METHODS: First-time generic products launched in 2022 were identified by Abbreviated New Drug Application (ANDA) or New Drug Application (NDA) authorized generic applications in the National Drug Code (NDC) Directory. Exclusions included over-the-counter products, electrolytes/supplements, diagnostic agents, products with generic versions approved before 2022, duplicates, and products without pricing information. Per-package brand and generic list prices were sourced from NAVLIN's Global Pricing and Market Access Database and validated with RED BOOK. Brand net spending and rebates were obtained from SSR Health estimates. Annual volume utilization was calculated using net brand spending in the year preceding generic entry and was held constant to calculate projected generic net spending. In addition to estimating annual spending differences, mixes of generic and brand utilization were calculated to reflect incomplete generic substitution. Results were inflated to 2024 U.S. dollars.
RESULTS: In 2022, 142 ANDA or NDA authorized generic applications were identified in the NDC database. After exclusions, 23 products were eligible for analysis, of which 12 had complete SSR Health net sales data. Assuming complete generic substitution, estimated average annual savings were $530 million per product, yielding total annual savings of approximately $6.4 billion across the 12 products. When assuming standard market adoption in the mix of brand-generic utilization (20% Brand, 80% Generic), the average annual estimated savings per product was $424 million.
CONCLUSIONS: Analyzing a cohort of medicines that underwent first-time generic competition revealed contributions to generic savings and provided insights beyond aggregate market-level assessments, which often reference brand launch prices. Future research will explore additional data and analytics to evaluate trends over time.
Conference/Value in Health Info
2026-05, ISPOR 2026, Philadelphia, PA, USA
Value in Health, Volume 29, Issue S6
Code
HPR61
Topic
Health Policy & Regulatory
Topic Subcategory
Pricing Policy & Schemes, Public Spending & National Health Expenditures, Reimbursement & Access Policy
Disease
No Additional Disease & Conditions/Specialized Treatment Areas