Some Generics Cost More Than Brand Drugs for Medicare Beneficiaries

Study blames flaws in the structural payment system for Part D.

When Congress last year addressed pricing problems that led to biosimilars actually costing more than biologics, it neglected to do the same for some traditional small molecule drugs. Axios this morning reports on a study in Health Affairs that shows that some Medicare beneficiaries have had to pay more for the generics than they would for the brand drugs.

As Axios reports: “Branded drug companies pay discounts in Medicare’s ‘donut hole’, which count toward that senior’s overall out-of-pocket spending. Generics don’t, so it takes longer for seniors using those drugs to spend enough for the government to start picking up more of their costs.”

Stacie Dusetzina, one of the study’s authors, tweeted: “If you need a lot of drugs or some very expensive drugs you would save more money out-of-pocket by using brands instead of generics.”

Axios reports that overpayments for specialty generic drugs compared to brand-name drugs ranged from $869 to $1,072 in 2019. This, despite lower point-of-sale prices for these drugs.

Dusetzina tweeted that “we need to redesign [Part D] to work for people needing high-priced drugs. All of them. And we need to make generics CONSISTENTLY less expensive for patients than brands.”