Every year, Americans fill over 3.9 billion prescriptions for generic drugs. That’s 9 out of every 10 prescriptions written. But here’s the kicker: those same generics make up just 12% of total drug spending. Meanwhile, brand-name drugs, which account for only 10% of prescriptions, soak up 88% of the money spent on prescriptions. This isn’t a glitch. It’s the math of savings.

How Much Do Generics Actually Save You?

If you’ve ever paid $30 for a brand-name pill and then $7 for the same medicine in generic form, you’ve felt the difference. But the numbers go deeper. In 2024, the average out-of-pocket cost for a generic prescription was $6.95. For a brand-name drug? $28.69. That’s nearly five times more. For people without insurance, brand-name drugs jumped to $130.18 per prescription since 2019. Meanwhile, generic prices dropped by 6% over the same period.

These aren’t isolated cases. The total savings from generic and biosimilar drugs in the U.S. hit $445 billion in 2023 alone. Over the past decade, patients and the healthcare system saved $3.4 trillion by choosing generics. That’s more than the GDP of most countries. And it’s not just about pills-it’s about access. A cancer patient on a biosimilar for Stelara (ustekinumab) might pay 90% less than the original price. That’s not a discount. That’s life-changing.

Why Are Generics So Much Cheaper?

Generics aren’t cheaper because they’re lower quality. They’re cheaper because they don’t have to repeat the same billion-dollar clinical trials that brand-name drugs do. Thanks to the Hatch-Waxman Act of 1984, generic manufacturers only need to prove their drug is bioequivalent-meaning it works the same way in the body. No need to re-prove safety or effectiveness. That cuts development costs by 90%.

The FDA approved 745 generic drugs in 2024. That’s the highest number in over a decade. And it’s not slowing down. The pipeline is full. Drugs like Entresto, Tradjenta, and Opsumit-each bringing in over $1 billion in annual sales-are set to lose patent protection by late 2025. Once generics hit the market, prices for those drugs could drop by 80-90% within months.

The 90/13 Paradox: Why We’re Still Paying So Much

Dr. Aaron Kesselheim from Harvard Medical School calls it the “90/13 paradox.” Generics make up 90% of prescriptions but only 13% of spending. Sounds like a win, right? Then why do drug prices keep rising? Because the 10% of prescriptions that are brand-name are priced like luxury goods. One heart failure drug, Entresto, made $5.4 billion in 2023. Its generic version? Expected to cost under $100 a month when it launches.

The problem isn’t the generics. It’s the brand-name companies holding onto monopolies. Some drugs have been protected by over 75 patents-not for innovation, but for delay. This tactic, called “patent thickets,” lets companies file dozens of minor patents to block generics from entering the market. One drug’s patent was extended from 2016 to 2034 using this method. That’s 18 extra years of high prices.

Another trick? “Product hopping.” A company slightly changes a drug’s form-say, from a pill to a capsule-and pushes patients to the new version, then immediately patents it. The old version gets pulled from the market, and generics can’t replace it. This costs consumers nearly $3 billion a year.

Biosimilars: The Next Wave of Savings

Biosimilars are the generic version of complex biologic drugs-like those used for rheumatoid arthritis, Crohn’s disease, and cancer. They’re harder to copy than regular pills, but they’re still cheaper. Since their introduction, biosimilars have saved the U.S. healthcare system $56.2 billion. In 2024 alone, they saved $20.2 billion.

One of the biggest wins? The launch of nine biosimilars for Stelara by July 2025. Before, the drug cost over $7,000 per month. Now, the biosimilars are priced at under $700. That’s a 90% drop. Patients who couldn’t afford treatment before are now getting it. Oncology biosimilars have cut the growth rate of cancer drug spending in half since 2019, saving $18 billion in 2020 alone.

But here’s the catch: biosimilars still make up less than 30% of the market in most cases. Why? Doctors still hesitate. Patients are unsure. Insurance doesn’t always push them. Education is lagging. The FDA and HHS are pushing hard to fix that-with new guidelines, training programs, and public awareness campaigns.

What’s Holding Back Wider Use?

Even with all the savings, generics aren’t used as much as they could be. Why?

• State laws vary. Only 42 states have updated their pharmacy laws to let pharmacists substitute generics without doctor approval. In the other eight, you might get the brand name even if a cheaper generic exists.
• Pharmacy benefit managers (PBMs) don’t always steer patients to generics. Some still push brand-name drugs because they get kickbacks from manufacturers.
• Doctors aren’t always trained. Many still think generics are “less effective.” The FDA says they’re identical in active ingredients and performance. But old habits die hard.
• Patent games. As mentioned, companies use legal loopholes to delay generics. A bipartisan bill introduced in early 2025 aims to ban “pay-for-delay” deals-where brand companies pay generic makers to stay off the market.

Kaiser Permanente, one of the largest health systems in the U.S., slashed pharmacy costs by 30% in 18 months by mandating generic substitution. They didn’t cut care. They cut waste.

What’s Next? The Future of Generic Savings

The patent cliff of 2025 is just the beginning. Over $8.6 billion in brand-name drug sales are about to be up for grabs. If generics enter as expected, those drugs could become affordable within months.

The FDA is approving generics faster than ever. The number of first-time generic approvals jumped 12% in 2024 compared to 2023. The Inflation Reduction Act tried to cap brand-name drug prices, but it didn’t touch the root problem: lack of competition. The real solution? More generics. More biosimilars. Faster approvals.

By 2025, biosimilars alone are projected to save over $133 billion since their launch. The Congressional Budget Office estimates that generic and biosimilar competition will keep overall drug spending growth under 3.2% annually through 2030. Without them, it would be 6.8%.

The message is clear: generics aren’t just a cost-saving tool. They’re a public health necessity. Every dollar saved on a generic is a dollar that can go toward a child’s insulin, an elderly person’s blood pressure pill, or a cancer patient’s next treatment.

What You Can Do

• Ask your doctor if a generic version exists for any prescription you’re given.
• Ask your pharmacist to substitute if a generic is available-even if your doctor didn’t write it.
• Check your insurance plan’s formulary. Most require generics when available.
• If you’re on Medicare, look into biosimilars for conditions like psoriasis or rheumatoid arthritis-they’re often covered at the same cost as generics.
• Speak up. Tell your lawmakers you support bills that ban patent thickets and product hopping.

There’s no magic pill that lowers drug prices. But there is a proven, powerful tool: generic drugs. And the numbers don’t lie.