By Berkeley Lovelace Jr. -
NBC News
How can the US Government reduce the high price of prescription drugs?
You may have to look to tech entrepreneur Mark Cuban for answers.
Medicare could have saved nearly $4 billion in 2020 by buying generic drugs at the same prices offered by Cost Plus Drug Company, Cuban's online pharmacy that launched this year, according to a study published Monday in the Annals of Internal Medicine.
[Health for Hire: An Investigation of Latinos Making a Living in Clinical Trials]
Cost Plus Drug offers certain generic drugs, such as the depression drug fluoxetine or the blood pressure drug lisinopril, at discounted prices, selling the drugs at a fixed 15% markup plus a flat fee of three dollars, according to the company website.
Cost Plus does not offer brand-name drugs or accept insurance, so patients pay out-of-pocket for medications.
The study "shows that Medicare is overpaying for some of the generic drugs," according to 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 to be higher," he added.
Money is the motivation for many Latinos who enroll in clinical trials.
Others seek to cure themselves of diseases
June 15, 202204:15
Researchers at Brigham and Women's Hospital compared the price of 89 generic drugs sold by Cost Plus Drug in 2022 with the price paid by Medicare Part D plans in 2020.
Medicare Part D provides coverage for a wide range of prescriptions, including self-administered drugs, such as those used to control high blood pressure or diabetes.
After adjusting for changes in drug costs between 2020 and 2022, the researchers found that Medicare paid more on 77 generic drugs: $8.1 billion compared to $4.5 billion if Medicare had purchased the drugs at the same prices as Cost Plus. .
[Food Service Recalls Lentil Product After Customers Report Gastrointestinal Problems]
Only 12 drugs do not offer any savings.
The researchers didn't take into account the out-of-pocket costs of Medicare enrollees, which means it's not clear how much their cost at the pharmacy would have been reduced if Medicare had purchased the drugs at a lower price.
The results illustrate the need for political reform, the authors wrote.
Sonia Rojas, a pharmacy technician, works at the P&P pharmacy, in Miami, Florida, on December 22, 2020.Joe Raedle/Getty Images
Medicare "could save a lot more money if it had stricter policies on how you pay for drugs," Lalani said.
“There are a lot more reforms that could be done to streamline the generic drug pricing system, and we should really consider doing those things to lower costs for patients,” she said.
Price negotiation is a "black box"
Lalani noted that the study had limitations: The researchers were only able to compare drug prices that were sold by Cost Plus Drug, which accounts for 25% of the roughly $38 billion in Medicare Part D generic drug spending in 2020.
[What is the best diet to face the extreme heat that hits much of the US]
Juliette Cubanski, deputy director of the program on Medicare policy at the Kaiser Family Foundation, thinks the study raises the question of whether Medicare plans are leaving money on the table, and could be getting better deals on drugs.
She was not involved in the investigation.
Right now, price negotiation is “a completely black box.
There is not a lot of transparency,” he noted.
“We are putting the burden on patients to seek lower drug prices, instead of finding ways to make them more affordable,” he lamented.
The Government announces that the monthly premium for Medicare Part B will rise to $21.60 in 2022
Nov. 14, 202100:25
However, according to Cubanski, policymakers have not focused on making changes that could solve the problems of generic drug prices.
This is because the type of drugs that patients typically have to pay for are brand name drugs.
Democrats have pushed for legislation allowing Medicare to directly negotiate the prices of the most expensive drugs, which is currently prohibited.
[“It is difficult in society to be overweight.” One woman transformed her quality of life by changing her diet and losing 130 pounds]
“Saving $3.6 billion is certainly something worth pursuing if there is an opportunity to achieve that kind of savings,” he said.
But most of the Medicare dollars "go to the most expensive, brand-name and specialty drugs."
Lalani, who led the study, said it underscores the need to take a closer look at our prescription drug pricing system, which includes wholesalers, pharmacy benefit managers, pharmacies and insurers.