How can the US government reduce the high cost of prescription drugs? It may have to look to tech entrepreneur Mark Cuban for answers.
Medicare could save about $ 4 billion by purchasing generic drugs at the same price offered by Cost Plus Drug Company, an online pharmacy in Cuban in 2020, according to a study published Monday in the Annals of Internal Medicine Journal.
According to the Cost Plus Drug Company website, some generic drugs, such as Depression Drug Fluoxetine or the blood pressure drug Lisinopril, are sold at a discounted price of 15% and a fixed markup for a flat fee of $ 3. 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 paying more for certain generic drugs,” said Dr. Carr, a researcher at Brigham and Women’s Hospital in Boston and lead author of the study. Hussein Salim Lalani said. “And it’s a conservative estimate, so the actual savings will be higher.”
Researchers at Brigham and Women’s Hospital have compared the price of 89 generic drugs sold by Cost Plus Drugs in 2022 to Medicare Part D plans in 2020. Medicare provides coverage for a wide range of prescription medications, including Medicare Part D self-administration For example to control 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 if it were purchased at the same price as Medicare Cost Plus, compared to $ 4.5 billion.
Only 12 drugs offer no savings.
Researchers did not calculate out-of-pocket costs for Medicare registrations, meaning that if Medicare were to buy drugs at lower prices, it would not be clear how much their cost would be at the pharmacy counter.
The authors wrote that the findings illustrate the need for policy reform.
Medicare “can save a lot of money if we have strict policies on how to pay for drugs,” Lalani said. “There are still many improvements that can be made to optimize the generic drug pricing system, and we really need to consider doing those things to make patients less expensive,” he said.
A ‘black box’ for price negotiations
Lalani said the study has limitations: Researchers can only compare the prices of drugs sold by Cost Plus Drugs, which represent about 25% of the $ 38 billion in Medicare Part D generic drug costs in 2020.
Juliet Kubansky, deputy director of the Medicare policy program at the Kaiser Family Foundation, said the study certainly raised the question of whether Medicare plans would leave money on the table and get better deals on drugs. She was not involved in research.
Right now, the price negotiations are “just a complete black box. There’s not enough transparency,” he said.
“We’re putting a burden on patients, as opposed to ways to make them more widely accessible, to lower the prices of lower prescription drugs,” he said.
However, Kubansky said making changes to tackle the problems of generic drug prices is not the primary focus of policymakers. Because the types of drugs that patients usually struggle to pay for are brand-name drugs.
Democrats, in particular, have urged laws that allow Medicare to negotiate the price of the most expensive drugs, which are currently banned.
Saving $ 3.6 billion is definitely worth it if you have the opportunity to get that amount of savings, he said. But most dollars from Medicare “go to higher prices, brand names and specialty drugs.”
“This highlights the need to take a closer look at our prescription drug pricing system, which includes wholesalers, pharmacy profit managers, pharmacies and insurers,” said Lalani, who led the study.
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