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Competition is Driving Costs Down
The U.S. generic drug market is highly competitive, making it an essential part of healthcare. According to a study published in JAMA Health Forum (Gaudette et al., 2024), generic medications dominate the pharmaceutical landscape, especially in high-income countries. In the U.S., generics account for about 90% of all dispensed prescriptions, largely due to their affordability compared to brand-name drugs. This trend holds even when considering the broader international market. The study emphasizes that countries like the U.S. and Germany have particularly competitive markets, with multiple manufacturers vying for market share.
Between 2010 and 2022, the number of generic manufacturers in the U.S. jumped by 74%, reflecting a growing competitive environment. This increase benefits consumers by keeping prices low and ensuring availability. However, despite this robust competition, the study warns that high market concentration remains a concern, with certain drugs dominated by one or a few manufacturers. This raises the risk of shortages and supply disruptions, which could limit patient access to essential medications.
Specialty Medications Drive Costs Up
While generic medications make up 90% of prescriptions dispensed in the U.S., they account for only a fraction of total drug spending. The real cost burden comes from specialty medications—a category that includes treatments for complex, chronic conditions such as cancer, autoimmune diseases, and rare genetic disorders. Despite representing only about 2% of all prescriptions, specialty drugs account for nearly 50% of total U.S. drug spending.
These medications are typically expensive due to several factors, including advanced manufacturing processes, limited competition, and the high cost of research and development. While they are vital for patients who rely on them, the rising cost of specialty drugs poses significant financial challenges for both consumers and the healthcare system.
This imbalance—where a small percentage of drugs drive a large percentage of costs—underscores the importance of finding cost-effective ways to manage everyday medications. Specialty drugs will likely remain expensive due to their complexity, but there’s no reason for patients to pay inflated prices for the 90% of medications that are generic and inexpensive.
Saving by Simplifying
That’s why Forest Park Pharmacy’s cost-plus model is so crucial. By focusing on eliminating unnecessary costs for generics, we help keep everyday medications affordable for most patients. While specialty drugs will continue to command a high price, the savings on generics can help offset some of these costs and make healthcare more manageable overall.
For the majority of medications you take—those low-cost generics that treat common conditions—there’s no reason to use insurance or pay marked-up prices. At Forest Park Pharmacy, we’re committed to transparency and affordability, ensuring that patients don’t overpay for the medications they need.