More active substitution of generic drugs for brand-name equivalents would increase savings for state Medicaid programs, according to a study in Health Affairs. Greater federal enforcement of patent expirations for medications would increase Medicaid savings further, the authors found.
For the study, researchers selected three drugs and gathered CMS data from the first quarter of 2000 through the fourth quarter of 2004, as well as from the date that generic equivalents for each drug became available.
The authors found that Medicaid during the study period could have saved $1.5 billion on these drugs by substituting generic equivalents for the brand-name drugs. In addition, they found that each of the companies' patent protection was extended for an average of 26 months.
The researchers concluded that policymakers should not allow as many extensions on patent protection and should require Medicaid to mandate generic substitution of bioequivalent drugs after patent protections end (Kesselheim et al., Health Affairs, November/December 2006).