A report released by the Generic Pharmaceutical Association (GPhA) found that a 2 percent increase in the substitution of generic drugs for identical brand name products would yield a $1 billion savings for Medicaid.  Because Medicaid’s 64 percent generic drug utilization rate is more than 10 percent lower than that of the general population, GPhA suggests that there is a significant potential for generic savings within the program.  The study also found that, from 2000 to 2009, the use of generic drugs saved the U.S. health care system $824 billion.

From the report:

This report builds on the historic study released in May 2009 showing that the use of generic drugs saved the U.S. health care system nearly three-quarters of a trillion dollars over the decade 1999-2008. Again this year, the Generic Pharmaceutical Association (GPhA) commissioned IMS Health, the world’s leading provider of market intelligence to the pharmaceutical and health care industries, to conduct a 10-year supplemental savings analysis (2000-2009) that included brand and generic drug utilization data for 2009, the most recent full-year reporting period. The results of the IMS analysis are astounding. For the decade 2000 through 2009, the use of generic prescription drugs in place of their brand-name counterparts saved the nation’s health care system more than $824 billion dollars. In 2009 alone the use of FDA-approved generics saved $139.6 billion—a 15% growth over the prior year's savings—or about $382 million every day.

Full report: Savings Achieved through the Use of Generic Pharmaceuticals (PDF | 510.4 KB) 

The Commonwealth Fund. (2010). State case studies of infant and early childhood mental health systems: strategies for change. Lyman, D.R., Holt, W. and Dougherty, R.H.