The drugs that count are old and cheap. It doesn’t matter if new ones are ridiculously expensive.

The prevailing narrative on drug prices, especially in the US, is that they are getting ridiculously expensive and unaffordable. That makes a story that’s easy to write – villainous drug companies vs desperate patients unable to afford life-saving medicine.

But it’s almost completely wrong. Not the expensive part – the life-saving part.

Most drugs – and in particular, the drugs that have the greatest therapeutic benefit – are getting cheaper every year. What we really have is a two-tier system in which new drugs cost more and more, but old ones cost less and less.

Here’s a nice graph that tells the story:

From The Cost of Pharmaceuticals, the Role of Public Health | SPH | Boston University

While branded drugs are getting much more expensive, generics are actually getting cheaper. And generics comprise the overwhelming majority of prescriptions – nearly 90%:

From Seven Fast Facts About Generic Drugs

The good news here is that the most effective drugs are also the cheapest. Nearly all antibiotics are generics, as are most blood-pressure medications, statins, and diabetes drugs like metformin. For a few dollars a month, these drugs add months and years of life expectancy – see here and here and here.

Here are the gains in life expectancy (GLE) from controlling blood pressure, as a function of age:

From Treatment of High Blood Pressure and Gain in Event-Free Life Expectancy

And here’s what metformin, a drug that costs $5/month, does for the risk of death in Type 2 diabetes patients:

From 10-year follow-up of intensive glucose control in type 2 diabetes

That gap in mortality risk between metformin and the control group might not look so big. But integrated over decades and multiplied by the number of T2 diabetes patients (21 million in the US), we are talking about hundreds of thousands, if not millions, of life years gained.

Let’s contrast that to new cancer medicines. Despite all the hoopla over breakthrough treatments and personalized medicine, these drugs are far less effective in extending healthy lifespan. They are not really that much better than the old and cheap chemotherapy drugs they replace:

We are frightened enough by cancer, a truly dreadful disease, to keep paying ever-increasing prices for these mediocre therapies. As a result, the cost per life-year saved keeps going up:From How the U.S. could cure drug-price insanity

Antibiotics and diuretics and statins and metformin save more lives by far than personalized cancer therapies, and they do it for a tiny fraction of the cost.

For the near future, pharma prices will continue to be two-tiered – most drugs (the generics that save lives) will have flat or declining prices, while new, on-patent drug prices will continue to skyrocket. But public health will be little affected even if more an more patients are priced out of treatment. And patent expiration dates will work like a ratchet, moving high-priced branded drugs into the low-price generic bin. There will be less and less need to pay premium prices for drugs.

Pharma as we know it is doomed. It will collapse rather quickly if new and marginally effective drugs are excluded by payors (something which Medicare currently cannot do). Or it will collapse more slowly as more and more of our drug needs are met by generics. If – like most Americans – you hate drug companies, this is good news.

And even (if like me) you mostly like and respect the work that pharma companies do, you need not worry that their obnoxious pricing practices are killing your fellow citizens. New pricey drugs just don’t matter all that much.