Medicare could save millions by taking inspiration from Mark Cuban’s online pharmacy | Health
TUESDAY, June 21, 2022 (HealthDay News) — Medicare might want to take notice of the pricing strategy of a new online pharmacy led by tech entrepreneur and “Shark Tank” judge Mark Cuban if it wants to save billions on drugs on prescription, a new study suggests.
Cuba’s Cost Plus Drug offers some generic drugs at lower prices by selling them at a 15% markup plus a $3 flat rate. Patients pay for the drugs, which include the blood pressure drug Lisinopril and the antidepressant Prozac (fluoxetine), out of pocket because Cost Plus does not accept insurance. It also does not sell brand name drugs.
The new study found that if Medicare paid the same prices, it would have saved nearly $4 billion in 2020.
“Medicare overpays for some of the generic drugs,” said study author Dr. Hussain Saleem Lalani, a researcher at Brigham and Women’s Hospital in Boston. BNC News. “And this is a conservative estimate, so the actual savings are likely higher.”
Medicare “could save a lot more money if it had stricter policies on how it paid for drugs,” Lalani said. “There are a lot more reforms that could be done to optimize the generic drug pricing system, and we should really consider doing those things to reduce costs for patients.”
The research team looked at the prices of 89 generic drugs sold by Cost Plus Drug in 2022, comparing them to the prices of those same drugs paid by Medicare Part D plans in 2020. Then they adjusted for changes in costs medication between the two years. .
The study found that Medicare paid more than Cost Plus for 77 generic drugs. The total dollars spent was $8.1 billion compared to the $4.5 billion it could have cost. It’s unclear whether out-of-pocket costs would have been lower for Medicare enrollees if the drugs were cheaper.
Juliette Cubanski, deputy program director for health insurance policy at the Kaiser Family Foundation, said BNC News that the study raised the question of whether health insurance plans are leaving money on the table.
Right now, price trading is “just a completely black box. There’s not a lot of transparency,” Cubanski added.
“We’re kind of putting the onus on patients to look for lower prescription drug prices instead of finding ways to make them widely available,” she said.
Cubanski noted that the types of drugs that patients typically struggle to afford are brand name drugs, not generic drugs. Democrats have called for laws that would allow Medicare to negotiate directly to lower the prices of the most expensive drugs.
“Saving $3.6 billion is definitely worth pursuing if there’s an opportunity to get that amount of savings,” Cubanski said. But most Medicare dollars “go to more expensive brand name and specialty drugs.”
Limitations of the study include that the researchers could only compare the prices of drugs covered by the Cuban company, which make up only about 25% of the drugs included in the $38 billion in Medicare Part D spending in 2020.
Lalani called for a closer look at the prescription drug pricing system, which includes wholesalers, pharmacy benefit managers, pharmacies and insurers.
The results were published Monday in the journal Annals of Internal Medicine.
Kaiser Family Foundation has more on public opinion about prescription drugs and their prices.
THE SOURCE: BNC News