George examines the economic impact of generic pharmaceuticals on the U.S. economy. He argues that the generics industry provides safe, effective, and affordable medicines for many Americans.
To learn more, download the Teva United States Economic Impact Report.
Read on for George’s insights.
Why Generic Medicines Are Especially Good for the U.S. Right Now
By George Keefe, Senior Vice President, External Affairs and Public Policy, Teva Pharmaceuticals
True, the healthcare system has known for decades that generic medicines are a force for good clinically. Data that demonstrate the value of high-quality generic medicines is extremely compelling.
Both industry and the general public realize—especially now, with demand expanding—that generic medicines are affordable, too delivering low costs and high savings. Generic medicines cost, on average, 80% to 85% less than brand-name drugs, even though patients are receiving the same medicine that’s in the brand-name version of the product, according to the U.S. Food & Drug Administration.
Generic medicines account for 90% of prescriptions in the U.S., but only 22% of total spending on Rx medicine here, says the Association for Accessible Medicines (AAM). In 2018, all in all, AAM reported that generic medicines saved the U.S. healthcare system an estimated $292.6 billion over the past 10 years.
I have worked in the industry for over 25 years, holding numerous leadership roles supporting the branded and generic businesses. Through this experience, I’ve observed that among the general public and even policymakers an important reality remains little understood, much less deeply appreciated—namely, that generic medicines pack a wallop when it comes to overall economic impact. Indeed, generic medicines are increasingly critical in our national economy, especially with the financial challenges the U.S. now faces as unemployment runs high, Medicaid’s role grows, and the healthcare sector, particularly hospitals, is so hard hit.
The generic pharmaceutical industry in the U.S. employs over 52,000 people as of this year. It ranks 73rd as an industry by employment.
As it happens, Teva confirmed such data early this year when we released a comprehensive study conducted to examine our own influence economically. Our U.S. Economic Impact Report, an analysis from economic policy experts at Matrix Global Advisors, is a telling snapshot of our contributions domestically and worldwide—and, by implication, a persuasive overview of the value of generic medicines to the larger economy.
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This independent report showed Teva employed approximately 6,800 workers and supported more than 57,000 jobs in the U.S., contributing $15.0 billion to GDP and generating $4.8 billion in labor income. In the process, Teva saved the U.S. healthcare system just under $42 billion, with nearly $6 billion of those savings going directly to patients. Worldwide, Teva employed more than 42,000 workers across 60 countries, pouring $50.7 billion into GDP and stimulating $10 billion in labor income in 19 of those nations.
These economic achievements are possible because Teva is the leading generic pharmaceutical company in the U.S.—one out of every nine prescriptions here is filled with a Teva product—and because every day about 200 million people worldwide take one of our medicines.
A case in point about how Teva boosts the larger economy is evident at our manufacturing facility in Cincinnati, Ohio. Over the last two years, we invested in growing our workforce by adding over 100 new employees. This personnel increase has enabled our site to expand production output over the same period by 35%, from 1.5 billion dosages a year to two billion, and to introduce new and more sophisticated technologies.
Higher production efficiency led in turn to higher product quality and efficiency. There, in the heartland of America—as elsewhere—we’re manufacturing affordable products for the world’s medicine cabinet.
By every measure, then, Teva both leads and exemplifies the generics industry. The business argument for generic medicines is convincing beyond dispute. More ambitiously, a healthy pharmaceutical industry requires a thriving generics industry to inspire innovation and offset costs.
Today, in confronting the coronavirus crisis, the generics industry has demonstrated tremendous leadership and rallied for the greater good. Every hour of every day, a plane takes flight, a ship sets off across the seas and a truck rumbles down the highway to deliver medicines to pharmacies and hospitals worldwide.
Teva, too, is weathering the challenges from COVID-19—logistical and otherwise—to stay operational. We’re caring for our workforce through safety protocols of the highest standards. Our network of 70 global manufacturing sites function around the clock to make sure our medicines reach patients in more than 60 countries across six continents.
The bottom line is this: Every one of us should have access to high-quality medicines that help manage disease, fight infection and improve overall health. That’s the centerpiece of the Teva philosophy, and it is also good business.
The value proposition for the generic drug industry should be apparent to everybody. Teva is proud to contribute to a healthy economic ecosystem, maintaining access to safe, effective and affordable medicines for all Americans, and to bring these generic medicines where they belong, namely the U.S. healthcare marketplace,
What the U.S. still needs right now is a more informed understanding of our business. It’s essential to promoting good policy and a thriving, innovative industry.
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