Evidence of effectiveness in cost saving of generic drug expansion policies
Generic drugs can save healthcare expenditures through three main pathways including generic substitution of drugs, substitution of drugs in the same therapeutic class, and reduction in the average branded prices. First, the largest cost saving comes from the generic substitution of drugs by substituting the less expensive generic drug for the therapeutically equivalent branded drugs. Generic substitution rates are almost 90 percent when there is generic equivalent available. Second, therapeutic substitution is switching to a generic from a branded drug in the same therapeutic class.12 For example, the prescriptions of Lipitor declined from 43 percent of total statin
Generic drugs can save healthcare expenditures through three main pathways including generic substitution of drugs, substitution of drugs in the same therapeutic class, and reduction in the average branded prices. First, the largest cost saving comes from the generic substitution of drugs by substituting the less expensive generic drug for the therapeutically equivalent branded drugs. Generic substitution rates are almost 90 percent when there is generic equivalent available. Second, therapeutic substitution is switching to a generic from a branded drug in the same therapeutic class.12 For example, the prescriptions of Lipitor declined from 43 percent of total statin