Medicare Could Have Saved Nearly $1 Billion by Using Generics, Study Finds

August 22, 2019

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Source: Washington Examiner

Medicare could have saved nearly $1 billion in 2016 if it used generic versions of pricey combination drug-device products instead of the brand name versions, according to a new study.

The study, published Tuesday in the Journal of the American Medical Association, indicates that Medicare is doing an inadequate job of getting doctors to prescribe more generic drugs. The Trump administration released a blueprint in May to tackle drug prices, but it does not include anything to get doctors to prescribe more generics.

The report looked at Medicare spending in 2016 for brand-name combination products, which are combinations of drugs and devices. An example of a combination product is a stent that is coated with a drug and implanted in the body.

The study looked at the cost of 29 brand-name combination products and the estimated spending for the generic equivalent at the same dose under Medicare Part D, the program’s prescription drug plan. It found that Medicare in 2016 could have saved $925 million if it substituted the brand-name product with the cheaper generic.

Sometimes a doctor does not prescribe a generic for their patient if the patient asks for the brand name version or they do not know a generic is available. Medicare needs to change those practices in order to save on drugs, the study concluded.

“Promoting generic substitution and therapeutic interchange through prescriber education and more rational substitution policies may offer important opportunities to achieve substantial savings,” wrote the authors, researchers affiliated with Brigham and Women’s Hospital and Harvard Medical School.

Expanding generic drug availability is a key pillar of Trump’s drug pricing plan. It aims to boost competition by hastening approval of more generic drugs by the Food and Drug Administration.

The agency has already improved its approvals of generic drugs due in part to a 2012 user fee program through which generic drug makers pay the agency money for new applications. The FDA in turn uses that money to speed up the approval process.


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