Generics a Commonsense Answer to High Drug Prices

OPINION 

Drug makers spent $104 billion on research and development in 2024 for drugs that Americans who need them may never be able to afford.

That investment is wasted when patients are priced out of life-saving treatments.

As healthcare costs continue to rise, one commonsense solution is expanding access to more generic medications.

Generic medications routinely cost up to 85% less than brand-name drugs, and more than 90% of patients able to access them pay under $20 at the pharmacy counter.

However, when patients are limited to brand-name drugs, that number plummets — only approximately 60% have copays below $20.

The reason is simple: competition works. According to the Food and Drug Administration (FDA), the introduction of a single generic reduces prices by about 30%, and with five competitors in the market, prices fall by nearly 85%.

For a system needing real solutions, expanding generic alternatives is one of the rare interventions that consistently delivers, and achieves this without denying needed care.

It may be surprising to learn that generic medications make up only a fraction of U.S. healthcare spending compared to branded medications.

Generics and biosimilars account for only 12% of drug spending in America, while branded medications drive 88% of prescription drug expenditures.

It is important to emphasize that the greater cost of branded versus unbranded medications does not translate to greater efficacy or safety.

Generic medications are not only affordable, but the FDA considers them fully equivalent to their brand-name counterparts, requiring that they match in dosage, safety, effectiveness, strength, stability, quality, and administration.

In other words, approved generics work the same way and deliver the same clinical benefits.

To make affordable generics available to patients, we need an efficient FDA review and approval process, as well as preferred formulary access on government-sponsored health plans.

We need to reject barriers like limited distribution systems (LDNs) that limit, and often eliminate, patient access to affordable generic medications.

One tactic used in LDNs, called "switching," is the industry’s version of musical chairs: just as a drug nears generic competition, patients are nudged — sometimes pushed — into a slightly tweaked version of the same medicine.

Maybe it’s an extended-release pill, different delivery system or dosage.

These minor updates are less about innovation and patient outcomes and more about protecting profits.

When the older formulation quietly disappears from the market, so does the chance for cheaper generics to compete.

Patients are left paying more for a drug that often works no better than the one they were already taking, navigating new insurance hurdles and, in the worst case, unnecessary disruptions to treatment.

This practice only inflates costs and further erodes trust in a system that should put patients and their needs first.

Fortunately, better government oversight of insurance coverage can prevent the detrimental impact of LDNs.

Formularies can prefer the product with generic competition, making affordable drugs more accessible to those who need them.

Built on the same rigorous science as their brand-name counterparts, generics deliver equal results at a fraction of the cost — exactly the kind of efficiency our healthcare system needs.

At a time when medical bills are straining families and federal budgets alike, expanding access to safe, affordable generic medications is a smart, practical step for the Trump administration to take to benefit patients and taxpayers alike.

Michael C. Burgess, MD, is a former Congressman for Texas's 26th congressional district and a retired OB/GYN.