Given an ideal race situation, a hare will outrun tortoise without much efforts. Such ideal situation seems to have withered for the prescription drugs in their race against the generic drugs.

The pace is now slowing to the tortoise. With a near-hollow pipeline of brand-name drugs, paired with a recent flood of generics and increased consumer skepticism regarding drug safety; the US drug spending growth has slowed to a sleepy 5.4% in 2005 according to Medco Health Solutions. It was +8.5% in 2004, and a rosy +16.4% in 1999.

Even more noteworthy, just 20 new drugs were approved by the Food and Drug Administration last year, the fewest total approvals since 2002 and the third-lowest total in the last 25 years.

With the pipeline for new drugs drying up rapidly, every gain in the generic pipeline is expanding at the expense of the patented drugs whose IPR expire after the usual 20-year honeymoon period. Between 2002 and 2005, 57 first-time generics were brought to market, which collectively accounted for nearly US$6 billion in brand-name sales in 2004.

Consumers and prescribers alike are recognizing the financial burden borne by payors - such as private employers and insurers. Acceptance of generic medicines is in part a prudent strategy.

In the US, the top drug cost-drivers were categories of:

• lipid-lowering drugs,
• asthma drugs,
• arthritis drugs,
• diabetes drugs and
• high blood pressure drugs.

With the recent high profile safety concerns with some brand-name medicines which were eventually recalled, physicians, pharmacists and consumers are wary of the safety of newer drugs.  Generics further outshine them due to the long experience and confidence the healthcare professionals had with these older drugs.

_{Kelley M. Butler  Employee Benefit News • August 2006
http://www.benefitnews.com/detail.cfm?id=9361}

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