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Medicare Overspending Attributed to Lack of Generic Prescribing.

NEW YORK -- Two studies have revealed missed opportunities for massive Medicare savings because of the program's choice of branded drugs over generics.

One study, published in the Annals of Internal Medicine, found that Medicare could have saved nearly $18 billion between 2011 and 2017 if generic versions of older medicines were dispensed instead of updated branded medicines introduced to replace pharma companies' older off-patent pills.

The bulk of the missed savings came from Medicare's expenditure of $13.4 billion on AstraZeneca acid reflux pill Nexium. The program could have saved $12.7 billion if doctors instead prescribed a generic version of AstraZeneca's older acid reflux pill Prilosec, the study reported. The company launched Nexium after Prilosec's patent expiration. While they are chemically comparable drugs, Nexium is considered a new compound with patent protection.

Medicare beneficiaries could have saved over 80% of the more than $832 million they spent on Nexium between 2011 and 2015, the study added.

The other study reported that broader use of generic drugs for hypertension and congestive heart failure could have saved hundreds millions of dollars in just two years. In 2016 and 2017, Medicare could have saved about $676 million by using generic angiotensin-II-receptor blockers (ARBs) and angiotensin converting enzyme (ACE) inhibitors or therapeutically interchangeable drugs of the same class--nearly 90% of the dollars spent those years on branded ARBs and ACE inhibitors.

"These findings underscore the value of generic substitution and therapeutic interchange as strategies to contain rising prescription drug costs," Dr. Matthew Growdon, chief medical resident in internal medicine at Brigham and Women's Hospital, and colleagues wrote in JAMA Internal Medicine.

"Prescription drug spending accounts for an increasing share of U.S. health care costs," the study authors added. "Spending can be de creased by substituting generic drugs for identical brand-name drugs (generic substitution) or for brand-name drugs with similar effect (therapeutic interchange)."

Medicare Part D beneficiaries received over 126,000 scripts for brandname ACE inhibitors with generic substitutes in the study period, costing the program over $42 million. Generics would have saved $41 million, researchers found.

Prescriptions for branded ARBs with identical generic versions cost close to $229 million. Generics would have saved more than $164 million over the two years.

Branded ARBs that did not have exact generic substitutes cost over $452 million in 2016. Depending on rebates, therapeutic interchange with losartan would have saved $269 million to $441 million, and interchange with candesartan would have saved $134 million to $306 million.

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Publication:Chain Drug Review
Date:Sep 23, 2019
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