Savings From Use Of Generics In USA Assessed

Possibly as much as $145.5 million could have been saved inreimbursement to US pharmacies in calendar years 1994 and 1995 for 200 generic drugs with the greatest amount of Medicaid reimbursement in each year, had the reimbursement been based on the findings of a new report compiled by the office of the Department of Health and Human Services' Inspector General.

The report, which came in response to a request from Medicaid to document the difference between average wholesale price and actual invoices paid by retail pharmacies to buy drugs, determined that pharmacies pay an average of 42.5% less than AWP for drugs sold to Medicaid beneficiaries.

Unlike brand-name drugs, where reimbursement is predominantly based on a discounted AWP, reimbursement of generic drugs is limited by federal upper limit amounts that are set by the Health Care Financing Administration, it was noted. Taking the upper limit into consideration, the IG came up with the $145.5 million figure.