Could Medicare Find Savings Through Generic Drugs?

Published Online: Friday, July 19, 2013
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Within the Medicare system, patients with diabetes are more likely to use brand-name drugs than similar patients in the US Department of Veterans Affairs (VA) system, according to the results of a retrospective cohort study appearing online June 11, 2013, in Annals of Internal Medicine.

The use of brand-name diabetes medications within the Medicare system was 2 to 3 times that of the VA system in 2008, the authors determined. Medicare spending for patients with diabetes would have been reduced by $1.4 billion had generic use mirrored that of the VA system during that year, they added.

The retrospective cohort study analyzed the percentage of patients filling brand-name prescriptions among 1,061,095 Medicare Part D beneficiaries and 510,485 veterans 65 years or older. Researchers included oral hypoglycemics, statins, angiotensinconverting enzyme inhibitors or angiotensin-receptor blockers, and long-acting insulin in their research.

The study background noted the different approaches each system takes regarding prescription drugs and how they affect spending. The VA system serves as its own benefit manager and uses a national formulary, while Medicare depends on private insurance plans with distinct formularies.

An article appearing on Kaiser Health News on June 11, 2013, featured an interview with lead study author Walid Gellad, MD, and described the differences in physician prescribing between the 2 government health care systems. The approval process within the VA requires physicians to try a generic drug before allowing a brand-name prescription. In addition, providers within that system have limited contact with pharmaceutical representatives.

“The main issue, and the only way to fix this, is to change what physicians are doing,” Dr. Gellad told Kaiser Health News. “. . .It’s an easy solution. You don’t have to change a law or do anything special to decrease costs—you just have to change the kind of drug people are using.”

According to Kaiser Health News, the study parallels other discussions regarding pharmaceutical costs. “There is not too much transparency when it comes to drug pricing,” David Lipschutz, Center for Medicare Advocacy attorney, told Kaiser Health News. “People focus on out-of-pocket expenses.”

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