Use of Generic Drugs in Prevention of Chronic Disease Is Far More Cost Effective Case Study

Generic Drugs in Prevention of Chronic Disease

The cost of healthcare -- including the cost of health insurance -- in the United States has gone up exponentially over the last few years. And when it comes to healthcare for those suffering from chronic diseases, the cost is often more than the patient can afford. But the use of generic drugs could reduce those costs and bring the overall cost of caring for a person with a chronic disease down to a more acceptable level. This paper will review available literature on the subject of generic drug costs and will address the need for doctors to recommend generics.

Generic Drug Costs

According to an article in the journal Health Affairs, chronic disease accounts for "the overwhelming majority of U.S. healthcare costs" (Shrank, et al., 2011, p. 1351). Shrank explains that managing patients with chronic diseases is often done using "pharmacologic therapy," and when there is special attention paid to the cost-effectiveness regarding the drugs being administered to the chronic patient, high quality care can cost less. In the coming years there will be many patents for "commonly prescribed chronic disease medications" that will be expiring, Shrank continues. This then will be a good time to pay close attention to the expiration of those patents because "highly effective generic alternatives" will be coming into the market to replace the patented brand name drugs, and this will offer a cost effective alternative to the expensive brand name drugs, Shank writes on page 1351.

Shrank cites a "highly publicized" study that has been endorsed by the American Heart Association and the American Diabetes Association that showed -- using "brand-name medications costs in their analysis" -- up to "244 million quality-adjusted life-years could be gained" over the next thirty years in the U.S. If appropriate preventative care is offered to people with cardiovascular disease and diabetes (1351). However, the study concluded that all those life-years notwithstanding, these strategies are very expensive. Hence, Shrank and colleagues are pursuing the idea that using generic drugs can result in cost savings.

First of all it should be known that when a drug manufacturer creates a medication, it takes a long time and is an expensive project. For that reason, the U.S. government gives the drug company that has developed a useful, approved drug a "twenty-year monopoly" on that medication. No doubt the drug companies profit handsomely from the sale of these drugs, but once the patent expires (usually after twenty years), other drug manufacturers can then produce and market this drug as a generic drug, Shrank explains on page 1352.

Given the importance of the prevention of cardiovascular disease (it is the most common cause of death in the U.S.; indeed, about eighty million Americans suffer from some form of cardiovascular disease), the arrival of generic drugs to use as first-line therapy can offer big savings for patients, Shrank observes.

The profits that drug companies make have been based in large part because a "tiered pharmacy benefit structure" that charges more to patients for brand name drugs than generic medications. But in order to bring costs…