Competition is really key to lowering prescription prices

There’s been a lot of attention on the federal government’s move to set price limits on 10 prescription drugs under Medicare to help reduce costs. While it’s encouraging to see some relief for a segment of consumers, this is merely a drop in the bucket when it comes to overall prescription drug cost savings – and more needs to be done to help Floridians.

The real opportunity to meaningfully cut prescription prices comes from increasing competition in the pharmaceutical industry. Today, there are only a handful of big players dominating the drug manufacturing space, allowing them to set astronomical prices for their products, stall the approval of lower-priced alternatives, and abuse the patent system to maximize profits. The free market is being restricted and as a result, patients and employers in Florida are facing higher prescription drug costs.

One area where lawmakers could help drive greater competition and ultimately lower prescription drug costs is by streamlining the approval process for generics and biosimilars, bringing more lower-cost alternatives to market faster. The potential savings are clear – IQVIA reported that Americans saved $408 billion in 2022 alone through the use of generic and biosimilar options.  

Generic drugs, which are equivalent to their brand-name counterparts in terms of dosage, safety and efficacy, are typically sold at a fraction of the price. U.S. Food and Drug Administration (FDA) studies show generic medicines are priced, on average, 39% lower than brand-name drugs, with some studies estimating savings of up to 80%. Generics make up about 17% of the prescription costs despite accounting for 90% of the total number of prescriptions filled. In short, brand-name drugs with little to no competition, represent the vast majority of costs for consumers and employers.