How about this for a headline: Medicare Wastes Billions on Newer Drugs.
I didn’t write it, of course… but believe me, I couldn’t have said it any better myself.
And as a matter of fact, I was lamenting this very problem just the other day. But even I had no idea just how staggering the numbers really are…
Full scripts, empty pockets
Researchers at Yale School of Medicine recently reported that Medicare could have saved a whopping $17 billion between 2011 and 2017, simply by prescribing older versions of a dozen new drugs.
Medicare Part D, in particular, spent upwards of $20 million total on these new drugs—which is more than six times the cost of older versions of the same drugs. (For example, if they would have prescribed a drug like Prevacid for reflux, instead of a new and only slightly different version of the same drug, known as Dexilant, they could have saved nearly $2 billion total, and close to $190 a pop!)
And the same goes for manufacturers, if they had paid their Medicare rebates—which in this case would be a rate of 17.5 percent for brand name drugs, and 26.3 percent for drugs of any therapeutic class. Meaning Medicare could have saved as much as $13.7 billion!
And if that doesn’t sting enough, all of these savings could have been passed on to patients insured under Medicare, who shelled out a needless $1 billion extra in out-of-pocket costs during the same time period.
In fact, from 2011 to 2015, Medicare Part D beneficiaries filled more than 104 million prescriptions for these twelve new drugs, adding up to $1.6 billion out of their own wallets. But buying the original versions would have saved them $11 a script… and $1.1 billion total.
And if that isn’t bad enough, things only go south from here…
Passing the buck
In response to these findings, experts are proposing that physicians be informed of generic alternatives when they write prescriptions. Because I suppose doctors are too stupid to exercise sound judgment when they’re doling out drugs?! (Nevermind that most electronic health records already offer this feature.)
Another “helpful” suggestion: Patients should ask their pharmacist if there’s anything cheaper. Look, I’m not saying this is a bad idea, but… since when was it the responsibility of the patient—someone who is likely without a medical degree, mind you—to be doing this kind of legwork?
Prescribing physicians should know full well that these newer drugs aren’t any better than their predecessors, regardless of the stories their drug reps are peddling.
It’s the responsibility of the doctor to prescribe effective treatments at the lowest financial cost to the patient, who may not otherwise be able to afford filling that script—at least, not without unnecessary hardship.
And yet, here we are.
Big Pharma sends sales reps to doctors to convince us that their newer drug is better than the older one. And tens of billions of dollars are then wasted on them, when less expensive generic versions are available—and just as effective.
And it’s not just generics versus brand names, either. Because that’s another thing that drug companies do: They tinker with a drug’s chemical composition just enough to create a “new” drug, which can then be patented and marked up—exorbitantly—for sale.
Sadly, this type of trickery is typical in the modern American medical establishment. It’s a blatant theft of our hard-earned tax dollars, which are being siphoned into the drug industry’s deep pockets.
And in the end, we’re all footing the bill.
P.S. At the end of the day, I believe health should always be your No. 1 priority. So when you’re looking at the bigger picture of what you spend your money on—especially when it comes to prescription drugs—remember to consider the REAL price of taking them. I talked about this in more detail back in the December 2012 issue of my monthly newsletter, Logical Health Alternatives (“The real cost of prescription drugs”). So if you’re not yet a subscriber, why not sign up today? Click here now!
“Medicare Wastes Billions on Newer Drugs.” Medscape Medical News, 08/15/2015. (medscape.com/viewarticle/916873?src=rss)