Report (2007-08): US Save $1 Billion on GDs?

US government is making the lots of profits by supporting the sales of generic drugs (GDs) in the pharmacy sector. According to the latest report published by the Food and Drug Administration, US government is able to save $1 Billion in the year 2007-08 by promoting the use of generic drugs instead of branded drugs. Even the customers survey conducted by the American Pharmaceutical Association has claimed that generic drugs have save nearly the $2 Billion amount of the customers overall. The insurance agencies have declared that because of the persistent use of the generic drugs the insurance companies have made a considerable profit. The surge in use was driven by a flood of new generic drugs that entered the market this year after patents expired on $16 billion worth of medicines. At the same time, insurers and retail pharmacies are pressuring generics makers to cut prices as they compete against each othe

US government was previously ignoring the importance of the generic drugs, but after the approval of the generic drugs by Food and Drug Administration, the government in United States started supporting the use of the generic drugs. US government as a fist step supported only the over-the-counter generic versions of the drugs and then after understanding the fact that generic drugs are absolutely safe, started supporting the generic drugs of all the branded drugs. In the year 2005-06, under the Bush administration, generic drugs were promoted. The money saved by the US government was not considerable during this phase as the people were not so sure about the quality and safety of the generic drugs. But, after the more and more promotion of generic drugs by the US government, the generic drugs started getting its hold on the pharmacy market in United States. . Generic Viagra was the first drug that was sold like the hot cakes in the US market. By the year 2006-07, the US government was able to save $50 million. In the year 2007-08, the generic versions of the drugs became very famous among the customers about their quality and very cheap price. The insurers also started forcing the doctors to prescribe the generic drugs as they were able to save lots of money because of the use of the generic drugs by the patients. The insurance companies were asking doctors to prescribe the generic drugs according to the step therapy that includes the prescribing the generic drugs as primary medicines and then prescribing the branded drugs as the secondary medications. This theory is still not accepted by few doctors but majority of the doctors in US are following this therapy.

Patients have become so cautious about the use of the generic drugs that they are visiting only those doctors who are prescribing the generic drugs. This has tremendously helped the sale of the generic drugs. The sharp increase in the sales of generic drugs is observed in the last year. The growth in the sales of generic drugs is nearly double of the last year. This tremendous rise in the sale of the generic drugs is observed because of the efforts of the US government that has made generic drugs a household name. The US government supported the generic drugs and advertised the generic drugs in such a way that no question about the safety of the generic drugs was put up by the people. The US government on the other hand also reduced the taxes on the drugs that helped the generic drug manufacturer to maintain their prices low in comparison to the branded drugs. A sudden increase in the use of the generic drugs was observed this year because of the financial crises that everybody is facing. Sinking generic drug prices are contributing to a slowdown in total spending on medicines. The prices of the branded drugs increased in the last year whereas the cost of the generic drugs is decreasing everyday. Thus, the US government saved around $1 Billion on GDs in the last year