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Nov 20 2013

Medicare and the prescription drug problem

While I am a big proponent of a single-payer system that could be implemented by allowing everyone to enroll in Medicare, this does not mean that Medicare is perfect. In fact, there is a lot of waste that could be eliminated in it but has not been.

ProPublica has a new report out that says that Medicare’s policies are such that it does not make much difference in cost to low-income patients if they are given high cost name-brand prescription drugs or their much cheaper generic equivalents. This enables drug companies to market their brands directly to consumers as if they are more effective and results in patients demanding those brands from their doctors who find it is less of a hassle just to give them what they want.

Meanwhile the companies also woo doctors with incentives to give those drugs. The net result is that more money is spent than necessary, most of it as a result of actions by just a few medical practitioners.

ProPublica analyzed the prescribing habits of 1.6 million practitioners nationwide and found that a tiny fraction of them are having an outsized impact on spending in Medicare’s massive drug program.

Just 913 internists, family medicine and general practice physicians cost taxpayers an extra $300 million in 2011 alone by disproportionately choosing name-brand drugs. These doctors each wrote at least 5,000 prescriptions that year, including refills, and ranked among the program’s most prolific prescribers.

Many of these physicians also have accepted thousands of dollars in promotional or consulting fees from drug companies, records show.

Many of the 900-plus primary care doctors who favored name brands shared another trait: Financial ties to the companies whose pills they prescribe.

Since 2009, 48 percent of them have received at least $1,000 for speaking, consulting and other promotional purposes, according to data ProPublica compiled from company web sites. Eleven have accepted $100,000 or more, the data show.

Medicare could ask Congress for authority to forbid doctors from prescribing name-brand drugs if equivalent generics are available but it has not done so. The Veteran’s Administration and even private insurers like Kaiser Permanente have such policies in place.

9 comments

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  1. 1
    moarscienceplz

    Medicare could ask Congress for authority to forbid doctors from prescribing name-brand drugs if equivalent generics are available but it has not done so.

    Sure, if you want to see more “Get Government out of my Medicare” placards at Tea Party rallies. (Although they are hilarious.)

    I would think a better plan is to make the name brand match the generic from Medicaid’s POV, i.e., if Medicaid pays $25 for the generic and the patient pays $3, let Medicaid also pay $25 for the name brand and let the patient pay the rest. If it turns out to be a $150 copay, maybe the patient might wish to rethink her decision.

  2. 2
    moarscienceplz

    Before anyone else points it out, I am aware that Medicaid and Medicare are two distinct programs, but my typing fingers haven’t yet got the message.

  3. 3
    F [i'm not here, i'm gone]

    Meanwhile, they give people with no means a a need for medicine a hard time about some of their scripts. Astonishing, isn’t it?

  4. 4
    Cathy W

    Medicare is also forbidden to use its size as negotiating leverage – they have to pay the market price for prescriptions. If Medicare could negotiate the same level of discount as the VA – and there’s every reason to believe they could do better; Medicare pays for a lot more prescriptions than the VA does – a conservative estimate placed the savings at $50 billion/year. Appalling.

  5. 5
    wtfwhateverd00d

    I had a viral caused pneumonia about two years and one of the drugs I was prescribed was a monthly inhaler that I needed which cost, if I recall $50 per month. And I needed this for 4 – 6 months.

    BUT!!!

    But there were always manufactuer coupons that could be found to reduce the cost to $5.00 out the door.

    My suspicion was that this was basically an insurance scam, but possibly a Medicare scam too, in that if a person had insurance, their insurance, or Medicare was probably billed at $50 per prescription. But that for us coupon conscious, face goes white with $50 prescription folks, we could get it at $5.00.

  6. 6
    doublereed

    Just 913 internists, family medicine and general practice physicians cost taxpayers an extra $300 million in 2011 alone by disproportionately choosing name-brand drugs. These doctors each wrote at least 5,000 prescriptions that year, including refills, and ranked among the program’s most prolific prescribers.

    Isn’t this pennies compared to other effieciency issues? $300 million? Like, for instance, didn’t Obamacare manage to save something like $700 billion from cutting out middle management?

  7. 7
    doublereed

    Since 2009, 48 percent of them have received at least $1,000 for speaking, consulting and other promotional purposes, according to data ProPublica compiled from company web sites. Eleven have accepted $100,000 or more, the data show.

    Again, this also sounds like small amounts of money. Only eleven accepted $100,000 or more. That’s not a lot.

    Look, there’s always going to be problems and corruption. The point is not to fix every little efficiency issue we find. We’ve got to get our priorities straight here. These are issues that we can get around to fixing if we would like at some point in time. These aren’t critical problems, and even seem relatively harmless.

  8. 8
    AMM

    There are times when the generic isn’t exactly equivalent to the name-brand version. My son tried switching to generic Lexapro and got side effects. Yes, I wish he could have stayed on generic — the name-brand costs me (after insurance) roughtly $100/month.

  9. 9
    trucreep

    “Medicare could ask Congress for authority to forbid doctors from prescribing name-brand drugs if equivalent generics are available but it has not done so.”

    Just want to point out that if a generic is available and the prescription is written for the name brand, you can still have it filled as generic. Only thing that stops that is if the doctor writes it as DAW, but that is rare.

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