New data shows FDA’s proposed generic labeling rules would add to health costs

The US Food and Drug Administration’s Proposed Rule on prescription drug labeling would add $4 billion annually to the nation’s already high health care costs, undercutting the cost savings that generic medicines have brought to America’s patients and health care system, according to an analysis released by economic consulting firm Matrix Global Advisors (MGA).

“Flooding the marketplace with multiple versions of labels for the same medicines would not only seriously jeopardize patient safety, but also would burden consumers, taxpayers, large and small businesses, and state and federal governments with billions of dollars in increased costs for generic medicines,” said Ralph Neas, president and chief executive of the Generic Pharmaceutical Association (GPhA). “The study demonstrates that in proposing this Rule, the FDA overlooked its very real financial impact on the affordability and availability of generic medications for patients and all stakeholders in the drug supply chain,” he added.

Of the projected increase in health care costs, MGA estimates that Medicare and other government programs will incur $1.5 billion in annual new spending, while private insurers and patients will pay $2.5 billion per year.