Are Generic Drugs Too Cheap for Their Own Good?

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More than 90% of prescriptions in the US are filled with generic drugs. These cheaper alternatives to branded medications have expanded access to care for millions of Americans while saving the health system hundreds of billions of dollars a year. While the prices of branded drugs have skyrocketed in recent years, generics prices have been falling steadily.

For patients, this sounds like unqualified good news. Yet there’s a downside if prices fall too low: In recent months, major manufacturers have declared bankruptcy and scaled back production. Hundreds of generic drugs are now in shortage, including lifesaving cancer treatments and medicines for premature babies.

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