Enhancing Meaningful Transparency

In recent years, many of the proposed legislative solutions in states have focused solely on price transparency by pharmaceutical manufacturers. While well intentioned, often transparency legislation does not factor in the difference between brand and generic medicines in the marketplace and ignores the roles others in the medicine value chain play in setting the prices patients pay.

States often group generic and brand medicines into a one-size-fits-all solution by requiring that manufacturers provide information on any price increase over a certain percentage. This approach often captures many generics for whom a large percentage increase equals a very small real-dollar increase. Also, these states rarely capture price decreases, which represent the majority of price changes within the generic industry. These reporting requirements burden generic manufacturers and threaten their ability to provide access to lower-cost medicines.

States should also consider including the many players within the medicine value chain to identify the cost drivers that can increase a patient’s out-of-pocket expense. Insurance design and formulary composition also play a role in setting these prices, and any attempt to understand what patients pay at the pharmacy counter must include these players.

$313BN

Saved from generics in U.S. healthcare industry

90%

Of prescriptions dispensed are generics dispensed

20%

Of prescription drug spending are generics

92%

Of generic prescriptions are filled for $20 or less

$48.5BN

Total cost saved to medicaid from generics