The GAO issued a report today with a nice literature review on savings from generic drug use. One fact caught my eye, on therapeutic substitution:
While the overall generic utilization rate was 78 percent in 2010 for drugs dispensed in retail settings and long-term care facilities, the rate at which generic drugs were substituted for brand-name drugs when a generic equivalent was available was 93 percent. Thus, additional savings from generic drugs are likely to come mostly from an increase in therapeutic substitution, in which a generic is substituted for a brand-name drug that is not bioequivalent. (at 9, emphasis added)
The legal and clinical issues with therapeutic substitution are significant, since the molecules are different, even if in the same class. Mandatory therapeutic substitution is a non-starter, but perhaps tiered copay structures might make sense.