New generic drugs can save you money

But it can take more than a year to see substantial savings when you switch to a generic

Consumer Reports magazine: May 2012

When the blockbuster cholesterol drug atorvastatin (Lipitor) finally became available as a generic last November, people who were taking it looked forward to lower prices. (Lipitor costs about $191 a month.) But it’s only now, six months since the expiration of Lipitor’s patent, that prices for atorvastatin have begun to drop. And it could be a year or more before consumers and their health plans see substantial savings.

The same delayed savings will apply to many other widely used drugs whose patents are set to expire by 2013.

Why? The answer has to do with complex laws that govern pharmaceutical patents, says Stephen Schondelmeyer, Pharm.D., Ph.D., a pharmaceutical economics professor at the University of Minnesota. Before a company’s patent on a drug expires, manufacturers of generics often race to file lawsuits to challenge the patent. The company that wins gets a six-month exclusive to sell the drug.

That doesn’t always happen. But when it does, the market doesn’t really open to competition until multiple manufacturers can start making the generic version of the drug. By the end of the first year, the price can drop by as much as half the original cost, Schondelmeyer says. By the second year it can fall by 70 percent, and by year three it can drop by as much as 95 percent of the original amount.

During the next few years an unprecedented number of widely used brand-name drugs will become available as generics. Ten noteworthy ones that are available now or will be no later than early 2013 are listed in the chart below.

Medicare alert

Even after a drug goes generic, some drug plans, including Medicare Part D, charge lower co-payments for the branded version than for its generic counterpart. That has to do with agreements between insurers and pharmaceutical companies that make it seem like the name-brand drug is the better deal.

But even if you pay only $3 a month for Lipitor (as is the case for people covered by the Cigna RX1 plan, for example), the entire cost of the drug under that plan—$167—is put toward your “doughnut hole” limit of $2,930. If you take multiple drugs, that raises the chance that you’ll hit the maximum before year’s end, at which point you’ll start paying half the cost of your brand-name drugs. If you’re concerned about cost or maxing out your coverage, ask your doctor to prescribe the generic version of a drug whenever available, even if it means a few extra dollars in co-payments up front.

What you could save

Brand-name drug

Availability date  for generic (estimated)           

Used to treat

Brand-name retail price*

Generic price per month after
1 year

Generic price per month after 2-3 years

Actos (pioglitazone)

August 2012

Type 2 diabetes

(30 mg)



Caduet (amlodipine/atorvastatin)

Available now

High blood pressure, high cholesterol

(10-20 mg)



Lexapro (escitalopram)

Available now

Depression, anxiety

(20 mg)



Lipitor (atorvastatin)

Available now

High cholesterol

(20 mg)



Plavix (clopidogrel)

 May 2012

Blood-clot prevention

(75 mg)



Propecia (finasteride)

January 2013

Hair loss (men)

(1 mg)



Provigil (modafinil)

April 2012

Excessive sleepiness

(200 mg)



Seroquel (quetiapine)

Available now     



Schizophrenia, bipolar disorder, severe depression

(25 mg)



Singulair (montelukast)

August 2012


(10 mg)



Tricor (fenofibrate)

July 2012

High cholesterol

(145 mg)



*Retail prices for 30-day supply are for the most common dosage and are derived from data provided by Wolters Kluwer Pharma Solutions, which is not involved in our analysis or recommendations.

Photo: Scott Camazine/Photo Researchers/Getty Images

The Viagra effect for less

The erectile dysfunction drug Viagra (sildenafil) comes in 25-, 50-, and 100-milligram pills, none of which are slated to become available as generics until 2019. But sildenafil is also sold as Revatio, a 20-milligram pill for pulmonary arterial hypertension that will become available as a generic in September. (Pfizer makes both drugs.) Men who take the 25-milligram dose of Viagra ($23 a pill) could talk with their doctor about switching to a 20-milligram pill of generic sildenafil (expected to drop to $10 a pill by March 2013). Those who take higher doses of Viagra are better off staying with the branded version for now. But by 2015, generic sildenafil is expected to cost $1 a pill; at that point, men who take 50 or 100 milligrams of Viagra might combine multiple 20-milligram pills of generic sildenafil.
Editor's Note:

These materials were made possible by a grant from the state Attorney General Consumer and Prescriber Education Grant Program, which is funded by a multistate settlement of consumer fraud claims regarding the marketing of the prescription drug Neurontin (gabapentin).

A version of this article appeared in the May 2012 issue of Consumer Reports magazine with the headline "Watch for These New Generics."

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