After Martin Shkreli took a 5,000% price hike on a decades-old medicine and thwarted rivals, a movement grew to ensure companies could not corner the market on generics that lack patent protection and competition. But a new analysis suggests such efforts would not save tons of money, simply because total government spending on such drugs is not as much as some might imagine.
To wit, the total Medicare and Medicaid spending for 137 so-called single-source generic drugs was estimated to be $1.6 billion in 2018, but 89% of federal spending was concentrated among 20 generics. As a result, the researchers estimated that laws or regulations designed to boost competition and reduce prices would save the federal government between $328 million to $1.3 billion, depending on rebates.
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