US Could Save Billions on Generics Purchased at Mark Cuban Prices, Study Finds
How can the US government bring down the high price of prescription drugs? We may have to turn to tech entrepreneur Mark Cuban for answers.
Medicare could have saved nearly $4 billion in 2020 by purchasing generic drugs at the same prices offered by Cost Plus Drug Company, the Cuban online pharmacy launched this year, according to a study published Monday in the journal Annals of Internal Medicine. .
Cost Plus Drug offers certain generic drugs, such as fluoxetine, a depression drug, or lisinopril, a blood pressure drug, at discounted prices, selling drugs at a flat 15% markup plus a flat fee of $3, according to the company’s website. Cost Plus does not offer brand name drugs or accept insurance, so patients pay for drugs out of pocket.
The study “shows that Medicare is overpaying for some of the generic drugs,” said Dr. Hussain Saleem Lalani, a researcher at Brigham and Women’s Hospital in Boston and lead author of the study. “And this is a conservative estimate, so the actual savings are likely higher.”
Researchers at Brigham and Women’s Hospital compared the price of 89 generic drugs sold by Cost Plus Drug in 2022 to the price paid by Medicare Part D plans in 2020. Medicare Part D covers a wide range of prescription drugs, including drugs self-administered. drugs, such as those controlling high blood pressure or diabetes.
After adjusting for changes in drug costs between 2020 and 2022, researchers found that Medicare paid more on 77 generic drugs: $8.1 billion versus $4.5 billion if Medicare had purchased the drugs at the same prices as Cost Plus.
Only 12 drugs appeared to offer no savings.
The researchers did not consider out-of-pocket costs for Medicare enrollees, meaning it was unclear how much lower their cost at the pharmacy counter would have been had Medicare purchased the drugs at a discount. inferior.
The findings illustrate the need for policy reform, the authors wrote.
Medicare “could save a lot more money if it had stricter policies on how it paid for drugs,” Lalani said. “There are a lot more reforms that could be done to optimize the generic drug pricing system, and we should really consider doing those things to reduce costs for patients,” he said.
Price negotiation a “black box”
Lalani said the study had limitations: The researchers could only compare the prices of drugs sold by Cost Plus Drug, which account for 25% of the roughly $38 billion in Medicare Part D generic drug spending in 2020.
Juliette Cubanski, deputy program director for health insurance policy at the Kaiser Family Foundation, said the study certainly raises the question of whether health insurance plans leave money on the table and could get better deals on drugs. She did not participate in the research.
Right now, price trading is “just a completely black box. There’s not a lot of transparency,” she said.
“We’re kind of putting the onus on patients to look for lower prescription drug prices instead of finding ways to make them widely available,” she said.
However, making changes that could solve generic drug pricing problems has not been the main goal of policymakers, Cubanski said. Indeed, the types of drugs that patients generally find it difficult to afford are brand name drugs.
Democrats, in particular, have pushed for laws allowing Medicare to directly negotiate prices for the most expensive drugs, which is currently prohibited.
“Saving $3.6 billion is definitely worth pursuing if there’s an opportunity to get that amount of savings,” she said. But most Medicare dollars “go to more expensive brand name and specialty drugs.”
Lalani, who led the study, said it highlights the need to take a closer look at our prescription drug pricing system, which includes wholesalers, pharmacy benefit managers, pharmacies and insurers.
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