The 'unprecedented' plunge in prescription drug prices

When patents for drugs like Lipitor and Plavix expire over the next two years, prices will drop as generics flood the market

A Florida pharmacist fills prescriptions: Six of the 10 top-selling drugs will go generic in the next two years, which will make them cheaper for patients.
(Image credit: CHARLES W LUZIER/Reuters/Corbis)

Dozens of patents for name-brand drugs are due to expire within the next 14 months, and generic drugs will replace some of the most popular and widely advertised drugs used today. For millions of people worldwide, this means switching from familiar brands like Lipitor to generic equivalents. How will this affect drug companies, and what will be the impact on people who depend on expensive prescription medication? Here, a brief guide:

Which drugs are scheduled to go generic?

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Why is this happening all at once?

In the 1990s, pharmaceutical researchers were "wildly successful at creating pills that millions of people take every day for long-term conditions," says the Associated Press. The patents, which were filed while the drugs were still being developed, generally last for about 20 years before expiring, so many drugs that were created in the 1990s will probably be available as generics in the next few years.

Will this result in significantly lower drug prices?

Yes. Generics typically cost 20 to 80 percent less than brand-name drugs. That's a "godsend" for people with chronic conditions like arthritis, high cholesterol, diabetes, and other illnesses — especially if these people have no prescription coverage. Hospitals, nursing homes, and long-term-care facilities will also benefit, since "using lower-priced generics will save them some money." Overall, the use of generics "saved the U.S. health-care system more than $824 billion from 2000 through 2009," says National Journal.

What about the impact on Big Pharma?

"The profit dollars that companies used to reinvest in innovation are no longer going to be coming," says pharma consultant Terry Hisey, as quoted by the Associated Press. That raises "long-term concerns about the industry's ability to bring new medicines to market." Drug companies have already started laying off employees, and more belt-tightening is expected to occur.

Sources: Associated Press (2), LA Times, National Journal

Explore More