To Lower the Cost of Medicine, the Backbone of Affordable Healthcare Must Grow Stronger – Inside Sources

The biggest affordability crisis in America today is the threat of losing generic medicines.

In 2025, generic and biosimilar medicines saved American patients, employers and taxpayers $496 billion. Over the past decade, total savings have reached $3.6 trillion. These medicines fill 89 percent of all prescriptions in the United States, while accounting for only 11.6 percent of prescription spending. Americans depend on generic medicines to live, yet these drugs represent barely more than one dollar out of every hundred we spend on healthcare.

Generic and biosimilar medicines have been the biggest success story in healthcare. This market is also the most fragile. Sustaining a vibrant generic and biosimilar industry is critical to our health, prosperity and national security, but fundamental economic realities pose an existential threat.

Generic medicines are proof that competition drives down prices. They are the only part of the U.S. health system in sustained deflation. Over the past five years, generic prices fell an average of 7.7 percent a year while overall medical costs increased 6.2 percent. This is a spread of nearly 14 percentage points. Since 2019, the value of generics sold in America has declined by $6.4 billion, even as manufacturers launched more products and shipped more doses. In 2016, generics were 27 percent of prescription spending. Today, the industry represents only 11.6 percent of spending.

Read those figures together, and the problem is plain. We expect the industry to supply nine of every 10 prescriptions in the United States while we are paying them less and less of our healthcare dollar.

While some economic principles are complex, everyone understands that companies can’t cover their costs and will stop making things. That is already happening. New IQVIA analysis released in the annual Access & Savings Report finds that 37 percent of the generics that the FDA approved between 2013 and early 2024 never launched at all. Among medicines in shortage, 84 percent have at least one approved generic that has never reached a pharmacy shelf. The science worked. The regulator approved it. Manufacturers couldn’t afford to make it.

This is where a healthcare story becomes a security story. The United States recorded 75 drug shortages last year. Shortages are also lasting longer, now averaging five years each. Canada, with comparable regulatory standards, has 40 percent fewer shortages, and researchers keep landing on the same explanation: Canada pays more for generic medicines than the United States. By driving down prices for our most essential medicines, we have reduced incentives for manufacturers to produce these drugs and increased operational risk. Thin margins mean no redundancy, no buffer, and no second source when something breaks.

Onshoring generic and biosimilar pharmaceutical manufacturing presents an important opportunity to advance national security and infuse resilience and stability into the economy and public health — all while reducing the risk of supply chain disruptions that can be catastrophic to patient care. However, significant challenges remain in expanding and sustaining generic drug manufacturing in the United States, especially given the substantial financial, environmental and operational pressures. Onshoring more generic manufacturing will require substantial investment, and near-term actions and long-term strategic solutions from federal and state policymakers.

The fixes are known, and none of them require new spending. Streamline FDA review so approved medicines reach patients faster by deeming all biosimilars interchangeable and stop requiring redundant clinical studies. Curb patent abuse by limiting the thickets that brand manufacturers use to protect their monopolies.

American patients shouldn’t have to wait years for biosimilars that Europeans and Canadians already have. Stop Medicare rules and pharmacy benefit managers from steering patients toward higher-priced brands when a lower-cost equivalent sits right there. And roll back the federal policies working against competition, from the Medicaid generics penalty to price controls that start their clock years before a generic could possibly launch.

On that last point, the market has already run the experiment. When more than a dozen companies began selling generic Entresto in late 2025, the average prescription cost fell to $80.57 by early 2026 — about a tenth of the brand price and far below the price Medicare negotiated for the same drug. Eighty thousand more Americans got it. Competition beat the price control, and it did so faster.

The generic industry isn’t seeking special treatment. It just makes sense to support the one part of American healthcare that reliably reduces the cost of medicine, so we can keep doing it. Some $496 billion a year is not a rounding error. For millions of families, it is the difference between filling a prescription and going without.