FDA Flags Link Between Generic Competition and Lower Drug Prices

The price of a generic drug continues to drop as the number of competing products increases, the FDA found in a new analysis.

The agency looked at two sets of numbers for generics launched between 2015 and 2017 — the average manufacturer prices (AMP) reported to the Centers for Medicare and Medicaid Services, and IQVIA’s database of wholesale prices paid by pharmacies.

For products with a single generic producer, the generic AMP is 39 percent lower than the brand drug price before generic competition, or 31 percent lower for invoice-based drug prices, the agency found.

With six or more competitors, generic prices using both AMP and invoice-based drug prices show price reductions of more than 95 percent compared to brand prices before generic entry.