US Medicare could have saved $1 billion by substituting branded drugs, says study

The use of branded combination medicines instead of generic ones added almost a billion dollars in just one year to the cost of the US federal insurance programme, according to a study published in the Journal of the American Medical Association (JAMA). The study said promoting generic substitution by educating doctors on prescribing habits and through rational substitution policies could offer substantial savings to the drug benefit programme.
The revelation is significant for India since Indian pharma companies supply 40 per cent of generic drugs consumed in the US.

In 2016, the difference between what the Medicare drug benefit program spent on branded combination drugs and the estimated amount it would have spent for the same number of doses of generics was $925 million, concluded the study. The study conducted by doctors at Brigham and Women's Hospital and Harvard Medical School analysed data from the prescription drug coverage programme in the 2011-16 period for 1,500 medications that accounted for the highest total spending reported by Medicare in 2015.

Medicare is a federal health insurance programme for those over 65 and for certain others such as younger people with disabilities and those with end-stage renal disease.

"For the 10 most costly brand-name combination drugs, the cumulative potential reduction in spending between 2011 and 2016 was estimated at $2.7 billion. Taking into account possible rebates from manufacturers at the average rate reported by Medicare, potential savings would have been estimated at $2.1 billion in total," stated the study.

The study cited the case of the antihypertensive drug Exforge, a combination of amlodipine and valsartan, that cost $8.21 per pill in 2016 compared to $0.96 for its generic constituents. It noted that with 5,036 beneficiaries prescribed Exforge in 2016, the estimated potential reduction in reported spending on just this one drug could have been $6.8 million. Similarly, the Medicare-reported price in 2016 for Duexis was $20.26 per pill compared to $0.28 for its generic constituents, ibuprofen and famotidine. For the 5,907 beneficiaries prescribed Duexis in 2016, the estimated saving could have been $23.4 million.

The researchers pointed out that while the prices of branded drugs have increased considerably in recent years, those of generic drugs has continued to decrease, which could explain the huge price difference and hence saving in cost.

The authors cited several studies to also point out that though combination products are said to reduce a patient's pill burden and improve adherence, no clear connection between combination products, improved adherence and improved clinical outcomes has been established.

The US has the highest per capita spending on prescription medications among industrialised countries and high drug costs have been a cause for concern for patients, doctors and policymakers.