$24.7 Billion in Generic Savings Available This Year

Press Release
Source: Express Scripts, Inc.

$24.7 Billion in Generic Savings Available This YearTuesday June 6, 12:01 am ET
Driven by Blockbuster Brands Going Generic

ST. LOUIS, June 6 /PRNewswire/ -- Generic drugs could save U.S. consumers $24.7 billion this year alone, according to a report issued today by Express Scripts, one of the nation's largest managers of pharmacy benefit plans.
The report examined the clinical potential for greater generic drug use in six major drug-therapy classes used to treat common conditions like stomach ulcers, inflammation, depression, high blood pressure and high cholesterol. It was based on a random sample of approximately three million individuals projectable to the U.S. commercially insured population.
The $24.7 billion savings potential reflects the introduction this year of new generic drugs in two of the most widely-used classes -- the anti- cholesterol drug simvastatin (generic Zocor®) and the anti-depressant drug sertraline (generic Zoloft®). In 2005, Zocor® and Zoloft® had sales of $3.1 and $2.6 billion, respectively.
Thus, the biggest savings available this year are in the anti-cholesterol class at $10.3 billion. Generics, including lovastatin, pravastatin and ultimately simvastatin, are potent enough to fill 85 percent of all prescriptions for an anti-cholesterol drug, based on existing prescribing patterns.
On average, only 18.8 percent of anti-cholesterol prescriptions are currently filled with a generic. However, some health plans have already achieved generic utilization in the anti-cholesterol class exceeding 75 percent, according to published reports.
Potential generic drug savings across six drug therapy classes
2006 Generic
Drug Therapy Class Current Usage Potential Savings
Rate Targets if Generics Usage
(%) (%) Targets Reached
Anti-cholesterol 18.8 85 $10.3 billion
Gastrointestinals 35.4 95 $6.8 billion
Anti-depressant 57.0 85 $3.4 billion
Anti-hypertensives 58.3 75 $2.1 billion
NSAIDs 77.0 97 $1.2 billion
Calcium channel blockers 49.4 95 $0.9 billion
TOTAL POTENTIAL SAVINGS $24.7 billion
"We have a tremendous opportunity to conserve precious health care dollars by increasing our use of less expensive generic drugs and still achieve the same clinical benefit," said Dr. Ed Weisbart, Express Scripts chief medical officer.
The generic fill rate goals utilized in the report are based on an evaluation of clinical efficacy and market dynamics of branded and generic medications. In 2004 and 2005, failure to take advantage of the full potential of generic drugs in the six classes resulted in missed savings opportunities of $20 and $21.3 billion, respectively.
The Express Scripts report also ranked 2005 generic drug use and savings opportunities by state, revealing significant variations across the six drug categories.
Last year, California had the biggest absolute savings potential at $1.7 billion, but, on a per capita basis, Kentucky passed up the most savings at $163 per commercially insured life. New Mexico was best at capturing generic savings, leaving only $81 per capita unclaimed.
Using 2005 data as a guide, the states with the most to gain from greater use of generic anti-cholesterol drugs this year are Delaware, Michigan, West Virginia, Maryland, and Kentucky on a per capita basis. The leaders in absolute savings potential are California, Texas, Florida, Pennsylvania and Ohio.
In 2005, New Mexico and Massachusetts had the highest overall use of generic drugs at 60 and 59 percent, respectively, while New Jersey at 45 percent had the lowest. In addition to New Jersey, five other states had generic fill rates of less than 50 percent: Florida, Louisiana, Maryland, New York and Texas. Neither Hawaii nor Alaska was included in the analysis.
The savings opportunity from increased use of generic drugs has never been greater. More than $50 billion worth of branded drugs will lose patent exclusivity over the next five years. This year alone, $14.3 billion in drug sales are expected to lose patent, with generic alternatives becoming available for at least 16 branded drugs.
A generic drug costs approximately 60 percent less than a brand name drug, on average. Consumers also pay a lower co-payment for generic medications, saving $15 or more per prescription on average compared to branded medications.
Weisbart outlined four steps consumers, health plans, health professionals and policymakers can take to increase the use of generic drugs:
-- Increase awareness of the wide number of generic alternatives to brand
drugs.
-- Always assess if a generic drug would meet the clinical need; only
consider using a brand drug when there is clear evidence that the
brand drug provides an important clinical value not available with
today's generic medications. This strategy would free up resources to
meet other pressing health care needs and help preserve the pharmacy
benefit as we know it -- without impacting quality.
-- Adopt pharmacy benefit plan designs that encourage greater use of
generic drugs and share the savings with patients. For example, use
programs that provide for trying a generic drug before a brand.
Express Scripts recently announced that 14 million members of pharmacy
plans it manages are in such programs, a five-fold increase over 2.8
million in 2001.
-- Enact state laws and regulations that support the use of chemically
equivalent generic alternatives to brand drugs.
A copy of the report, with complete rankings for 48 states, will be available at http://www.expressscripts.com/ourcompany/news/outcomesresearch/onlinepublicati ons/ .
Express Scripts, Inc. (Nasdaq: ESRX - News) is one of the largest pharmacy benefit management (PBM) companies in North America, providing PBM services to over 55 million patients through facilities in 13 states and Canada. Express Scripts serves thousands of client groups, including managed-care organizations, insurance carriers, third-party administrators, employers and union-sponsored benefit plans. The Company also provides distribution services for specialty pharmaceuticals through its CuraScript specialty pharmacy. More information can be found at http://www.express-scripts.com .
Media Contact: Steve Littlejohn