Then and Now: How Prescription Drug Prices Fall Significantly Over Time

Holly Campbell   |     August 4, 2015   |   SHARE THIS

Prescription drug prices fall significantly over time because the marketplace is unlike any other part of the U.S. health care system.

Innovator companies invest in pioneering research to bring new treatments to patients, and over time those medicines become available as lower-cost generic copies. Nearly 90 percent of all medicines prescribed to U.S. patients are generics and typically cost up to 80 percent less than the original brand medicine.

This is possible because significant research and development resources are not required for the manufacturing of generic medicines.

The impact of generic medicines is widespread and swift. Newly introduced generics are adopted rapidly and can capture an average of three quarters of the market within 3 months, with some capturing as much as 90 percent.  

This is one reason why retail prescription medicines have consistently accounted for just 10 percent of U.S. health care spending, even though more than 500 new medicines have been brought to U.S. patients in the past 15 years. The savings created by generic copies free up resources to invest in new treatments - creating headroom for innovation – and resulting in significant progress against some of the most costly and challenging diseases.


Read more about how our nation’s competitive biopharmaceutical marketplace controls costs while encouraging the development of innovative new medicines here.

Read additional posts on drug cost.

Subscribe to updates on a variety of issues. Get Updates

Holly Campbell

Holly Campbell Holly Campbell is former deputy vice president of public affairs at PhRMA focusing on the cost and value of medicines. Prior to joining PhRMA, Holly worked for large and small public relations firms where she provided strategic communications counsel, media relations and partnership expertise to health care and pharmaceutical clients. In her free time, she enjoys taking barre classes, trying new restaurants and spending time with Boss and Poppy, her rescue pups.

Topics: Drug Cost

Search the Catalyst

View Posts by Topic

see all

View Posts by Date

see all

Subscribe to Email Updates