August 13, 2022

Brand-name prescription drugs cost Americans billions more than generics

BALTIMORE, Maryland – Brand name prescription drugs are something that many patients simply trust more than their generic (or no-name) alternatives. However, the cost of these drugs weighs heavily on the American health care system. Researchers at the Johns Hopkins Bloomberg School of Public Health find that switching to brand-name prescriptions over generics costs the Medicare Part D program an additional $ 1.7 billion each year.

While there are laws that encourage the use of affordable generic drugs, the study finds that clinicians and patients requested a brand name generic drug 30 percent of the time in 2017. The Medicare Part D program offers coverage plans for outpatients aged 65 and over, as well as disability benefits. Coverage accounts for almost a third of the total amount spent on prescription drugs in the United States alone.

Costly choices for U.S. taxpayers

The study analyzed 169 million prescriptions, of which 8.5 million were branded even though a generic version was available for each. Overall, 17 percent of brand name drugs issued were requested by a physician. An additional 13.5 percent was requested by the patients themselves.

“Even with the laws in place, asking for a brand name drug is much more common than it should be. This distribution model results in exponentially higher costs for both the Medicare Part D program and for patients, ”says Gerard Anderson, Ph.D., professor in the Department of Health Policy and Management, in an academic publication. .

In the study, researchers analyzed a random sample of Medicare beneficiaries in 2017, as well as 224 prescription drugs that all had at least one generic version available. In addition, each of the drugs had at least 1,000 claims. The researchers determined the type of drug prescribed, the cost of Medicare Part D drugs, and the amount spent by the patient.

The results show that patients could have saved $ 161 million if their doctor had ordered generic drugs instead. Plus, if patients had requested the generic version, Americans could have saved an additional $ 109 million.

Why don’t people like generic drugs?

Current research indicates that many patients are skeptical about the overall effectiveness of generic drugs, with three in 10 people preferring brand names and 46% asking their doctor for these more recognizable drugs. Although only five percent of drugs dispensed under the Medicare Part D program are brand name drugs, researchers say the cost of brand name drugs is harmful to the program and to patients.

The study found that $ 4.42 billion was spent on brand name prescription drugs that were not specifically screened by doctors or patients. The researchers recommend that the program reduce branding and offer generic drug options when available. Additionally, improving clinicians’ perception of generic versions is an important step in persuading patients to seek generic options rather than the more expensive alternative.

“Patients should always be aware of the additional costs to themselves and to taxpayers associated with applying for a brand name prescription drug. Prescribing clinicians can also play an important role in educating their patients about the safety and efficacy of generic drugs, ”adds Ge Bai, Ph.D., CPA, associate professor at Johns Hopkins Carey Business School.

The problem with prescription drug prices tends to be a uniquely American problem. A recent study found that drug prices in the United States are 2.56 times higher than in 32 other countries.

The results appear in the newspaper JAMA network open.


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