ProPublica: Medicare Wasting Taxpayer Fortune on Name-Brand Drugs

Monday, 25 Nov 2013 10:26 AM

By John Morgan

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Medicare is wasting hundreds of millions of dollars annually because of doctors who routinely give patients pricey name-brand drugs when cheaper generic alternatives are available, ProPublica reported.

Perhaps more aggravating is the fact some of those same doctors are accepting money in promotional or consulting fees from drug companies.

ProPublica, a non-profit investigative journalism group, estimated only a fraction of 1.6 million medical practitioners nationwide are responsible for the huge waste.

Editor’s Note: Obama’s Budget Takes Aim at Retired Americans

Some of those doctors said they believe name-brand drugs work better than generics.

“At some point, I think we have to hold prescribers accountable for their prescribing,” said Dr. Nancy Morden, an associate professor at the Dartmouth Institute for Health Policy and Clinical Practice. “I just don’t see how that’s different from holding them accountable for the quality of care in the exam room or the operating room.”

Just 913 internists, family medicine and general practice physicians alone cost taxpayers an additional $300 million in 2011 by mostly choosing name-brand drugs, the ProPublica analysis concluded.

Many of those same doctors have “financial ties” to the companies whose pills they prescribe, the journalism group found.

Since 2009, 48 percent of those 900-plus doctors have received at least $1,000 from drug companies for speaking, consulting and other promotional purposes, and 11 of them have accepted $100,000 or more, ProPublica reported.

Dr. Jeffrey Grove, a Florida doctor who prescribes generics 90 percent of the time for Medicare patients, said it is irresponsible for doctors not to consider costs when choosing drugs for their patients.

“I don’t care that the government pays for it,” he said. “How many people could we insure that are uninsured right now if those physicians were practicing responsibly as well?”

ProPublica said the waste is partly an unintended consequence of a well-meaning Medicare provision whereby low-income people pay less than $7 per prescription regardless of its cost. Since those patients are unlikely to complain about the covered cost of the prescription, doctors have a free hand to prescribe name-brand drugs to them.

That special low-income subsidy has mushroomed into Medicare’s biggest cost, totaling $22.8 billion in 2012, according to the Medicare Payment Advisory Commission (MedPac).

MedPac estimates that if low-income patients were prescribed generic drugs in the same proportion as other Medicare enrollees, the program could save $1.3 billion annually in only seven drug categories.

ProPublica reported: “The drug industry’s leading trade group, the Pharmaceutical Research and Manufacturers of America, opposes higher brand co-pays for the poor. And the group has a history of batting away proposals that might cut into the billions of dollars of profits drug makers earn from high-margin products…”

NJ Spotlight, a non-partisan news service in New Jersey, said the state
is number one in the nation in terms of the percentage of brand-name drug prescriptions by doctors versus generics.

“Unfortunately, the drug companies have the government and the regulators in their pocket, to be perfectly honest about it,” Dr. Richard Beck, a retired New Jersey physician, told NJ Spotlight.

Editor’s Note: Obama’s Budget Takes Aim at Retired Americans

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