6 ms·

Medicare Could Have Saved $3.6B on Generic Drugs

172 points by lxm 4y ago

SamoyedFurFluff 4y ago
This is comparing to generic drugs from one specific company, based on the notion that the specific company is capable of providing a cheaper generic drug in a situation most favorable to the drug maker (a bulk purchase). It doesn’t actually go into if the generic will actually be a suitable replacement for each patient. For people with complex health needs, like the over 65+ folks on Medicare, it makes total sense to be on precise, non-generic drugs. I’ve known plenty of people with complex health needs that cannot take the generic, for whatever reason. Hell, I know people with needs like ADHD (a single diagnosis, not a complex health case) that cannot take a generic version.
- borski 4y ago
  Sure, this is a valid point. But this is not true for the majority of Medicare patients and, importantly, not why this is the case. This is happening because of existing deals and non-competitive drug purchasing.
- jpgvm 4y ago
  Yeah no. Generics -are- equivalent and regulated to be as such. [1] If you are hearing anything different it's just BS. [1] https://www.fda.gov/drugs/questions-answers/generic-drugs-questions-answers https://www.fda.gov/drugs/questions-answers/generic-drugs-qu...
  - throwawaymaths 4y ago
    They aren't perfectly equivalent, but see my sibling comment.
  - Spivak 4y ago
    Yes but no. Generics are not 1-1 substitutes because the FDA allows some (a lot) of wiggle room when it comes to bioequivalence. A really good example where this fails miserably is Adderall for ADHD. The generics are absolutely miserable. And if you actually find a generic you tolerate you can never switch pharmacies because they’ll be different. I’m no pharmacological expert but when I asked my pharmacist they explained it to me they said it was because Adderall is a mix of two drugs and it’s expensive to refine them into a balanced ratio but the FDA doesn’t care so generics don’t bother.
    - jpgvm 4y ago
      The rules aren't strict enough IMO but the observed variation is very low in practice. Australia allows very similar amounts of wriggle room in theory [1]. Most people I know in Australia with ADHD are treated with generics (very common among my friend group for some reason) and none that I am aware of have noticed any substantial differences between generics and brand name equivalents but I couldn't quickly find any studies that have investigated this. I wonder if that is due to variation in balance of the included amphetamines (as most of these are multiple active ingredients) though as I doubt that the inactive ingredients would play a significant part. [1] https://www.nps.org.au/assets/fc20fd821a02cf80-8d2289edb5e3-ef59843b3f060818930abb15d5ff4853aaeed461243034ea30c5d77ac475.pdf https://www.nps.org.au/assets/fc20fd821a02cf80-8d2289edb5e3-...
    - tyjen 4y ago
      ADHD medication is an excellent example illustrating the potential "wiggle room" differences between generics and brand drugs. The composition is similar enough to meet FDA generic drug standards, but the rate at which the generic drug mechanisms distribute the drug differs and potentially decreases treatment efficacy for many patients. Though, I do wonder if Vyvanse becoming a generic brand will help solve this dilemma, because the release mechanism is tied closer to the individuals metabolism via hydrolysis of an amino acid rather than relying on release rates set by minor manufacturing differences.
    - saltminer 4y ago
      I believe it's therapeutic equivalence that the FDA is lax on, not bioequivalence. Bioequivalence is just "does it deliver the same amount of the active ingredient," theraputic equivalence is "does it deliver the active ingredient in the same manner." The active ingredient is the same, the inactive ones are where the difference lies. Usually, they're similar enough that it doesn't really matter, but some drugs really do benefit from buying the name brand. A good example is with methylphenidate generics - you get the same amount of methylphenidate, but the name-brand extended release is far more effective than the generic extended release because it spreads the same amount of active ingredient over a longer period (the delivery mechanism created by the inactive ingredients in some generics is subpar). Occasionally, you'll get non-bioequivalent generics that slip through FDA approval, which happened to some methylphenidate generics [0][1]. I remember getting switched to the name brand when this came out, as the supplier for all the pharmacies near me used a non-bioequivalent manufacturer. (Authorized generics don't have this problem since it's literally the name brand with generic labels slapped onto it, but the one the nearby pharmacies could get through their suppliers was not the authorized generic.) [0]: https://www.fda.gov/drugs/drug-safety-and-availability/questions-and-answers-regarding-methylphenidate-hydrochloride-extended-release-tablets-generic https://www.fda.gov/drugs/drug-safety-and-availability/quest... [1]: https://www.reddit.com/r/ADHD/comments/3af86d/fda_rules_2_forms_of_generic_concerta_not_as/ https://www.reddit.com/r/ADHD/comments/3af86d/fda_rules_2_fo...
  - ipaddr 4y ago
    Coke and Pepsi and RC Cola are equivalent but they are not the same. People can react differently to equivalent medication.
- throwawaymaths 4y ago
  Wait what? This analysis is very much a broken window fallacy (fallacy of the seen vs the unseen); there are also very likely individuals "who can only take the generic version" because maybe the dosing schedules/bioavailability are slightly tweaked by the fillers or delivery additive, etc.
- jnwatson 4y ago
  Generics are literally identical to the original drug.
  - ceejayoz 4y ago
    Anecodtally, my wife had significantly different experiences with two different manufacturers of a generic prescription pain management medication that came in patch form. The medication might've been the same, but the amount that made it into her system seemed to vary enormously based on which company’s patches she received. Same dosage, same delivery method. There’s more than just the raw chemical in play in a lot of meds.
  - drc500free 4y ago
    Bioequivalent as judged by the FDA does not at all mean identical. ETA: The fact that generics are not “literally identical” is probably the most important scientific, policy, and commercial consideration in that industry. FDA has to determine whether the benefits of lower costs justify the potentially lower efficacy, and set bounds for how different a generic can be and still count as “bioequivalent.”
- LarsAlereon 4y ago
  There's certainly nobody that can't take a generic medication, barring unusual ingredient allergies. What is actually happening is that people "dialed in" the dose they need on a different formulation of a drug, so they'd need to go through the process of figuring out the correct individualized dose for them if they switch to a different version. It would probably have made more sense for them to have started with a generic version so they don't have to go through this process more than once.
selectodude 4y ago
Note: this is less than one half of one percent of total Medicare spending.
- csours 4y ago
  A billion here, a billion there, soon you're talking real money
  - Clubber 4y ago
    3.6b ($) / 258m (adults) = $14 in taxes per adult in the US, per year.
    - labster 4y ago
      Or $1.4 M each to America’s Job Creators (tm) Edit: Wait, these are payroll taxes. There’s no real benefit to the rich because the taxes are capped. Which is why it’s not worth it to do anything about it, as no plutocrats will get significantly more than the masses.
    - ta988 4y ago
      Just that single problem is around ten basis point of average tax. All these problems compound because to find the hundreds of millions to close a fiscal exercise, things will get cut and never repaired after. So any fiscal inefficiency causes much more damage than just the direct problem.
    - daenz 4y ago
      Death by a thousand paper cuts. No one cut is egregious enough to warrant an emergency, yet you still die.
  - paulpauper 4y ago
    except this is a solution that is often touted to cut spending a lot, and second, it's not like finding new solutions becomes easier as earlier solutions are exhausted. Finding one solution is easy, finding dozens...not so much.
  - 4y ago
mmmmkay 4y ago
the problem is most capitalists wouldn't dare venture into that arena due to how intrenched the incumbents are. This makes the market highly inefficient due to lack of competition. Good on Cuban for daring to go whether other capitalists will not. I hope it works out for him.
- gremlinsinc 4y ago
  yeah, good on him, but it'd be so much better if it were an employee co-op. He's still making bank, and eventually could be the amazon of pharmacy undercutting everyone else, and still make a tidy profit. A non-profit or co-op could do the same thing and only aim for a small revenue target in the green, so they stay afloat and can keep paying payroll, and providing good service as needed. I'm eventually planning on branching into this area, if I can get my co-op CRM/ERP software platform finished. I'm wanting a system to manage a network of union/worker businesses that work in syndication and encourage loyalty to in-network brands, through benefits, discounts, etc. Think if you had a software to basically combine worker, consumer, and housing co-ops into a sort of network or social net or mutual aid network where volunteering, working as an employee, or just loyalty as a customer dictates if you've qualified to earn a dividend or free healthcare.
gumby 4y ago
Not just generics. Ever get a coupon from a drug manufacturer that drops your copay from hundreds of dollars to $10 or $20? Ever wonder why? It’s because Medicare gets an automatic discount (I think 20% these days but I’m no longer in the biz) from the manufacturer’s official price. So they simply set the official price at some huge figure and rake in huge bucks from the largest buyer, Medicare. Then they negotiate with the for profit insurance companies and subsidize the copays so that nobody complains to their congress person. It’s a huge rip off. Medicare should be paying a discount to the median price actually paid on the open market. But apparent nobody has an incentive to fix this.
- naniwaduni 4y ago
  > It’s a huge rip off. Medicare should be paying a discount to the median price actually paid on the open market. But apparent nobody has an incentive to fix this. Then they start issuing rebates instead of discounts? Or yeah, sure, everyone's definitely paying $100 for this quantity of this drug, then we kick insurance back $80 for advertising for every unit that makes it to an end consumer through them. There's no easy way out of price discovery when you are the largest buyer, because it becomes more than profitable enough to structure sales to exploit your policy to make up for the loss in doing the structuring.
  - Retric 4y ago
    That's assuming structing actually works here. It's not hard to define average price as cost after all incentives be they rebates or raffle tickets with “zero nominal value.”
  - Spooky23 4y ago
    The Federal government and government in general is really good at commodity procurement. The processes and legal requirements give them the ability to price and fairly procure even single source commodities. I’ve done scaled procurements at a very large, not federal level. We were almost always 10-20% lower unit cost than large corporate, and sometimes even better. At the Federal level, the law gives them “most favored” status, and they will sue vendors for fraud if they offer lower prices for the same commodity without lowering the federal cost. “It’s hard” is a common refrain for policy discussions. “That’s bunk” is my reply. Policy without graft isn’t much harder than using high and mighty principles to enrich people at taxpayer expense.
steve76 4y ago
wolfi1 4y ago
I don't know the specifics of the USA, but in Europe some generics are sold out, because they are imported usually from India, and the supply chain is heavily broken
paulpauper 4y ago
Which is a drop in the bucket relative to overall Medicare spending, sadly..
testfoobar 4y ago
$3.6 billion is not a lot of money. Edit: E.g. In 2014, end of life care for age 65+ (final 12 months) is 25% of total Medicare spending. https://www.kff.org/medicare/issue-brief/medicare-spending-at-the-end-of-life/ https://www.kff.org/medicare/issue-brief/medicare-spending-a... "Medicare Spending at the End of Life: A Snapshot of Beneficiaries Who Died in 2014 and the Cost of Their Care"
- colinmhayes 4y ago
  $10/person year
- dehrmann 4y ago
  Elon Musk would spend $4.20 billion on a joke.
boberoni 4y ago
This is like a news article/research paper version of a cost savings calculator on a pricing page. You could save 90% on storage costs if you switch from AWS to XCloudProvider This makes me want to dig into the research data and build an interactive cost savings calculator with a slider. It would also probably be a great marketing page for Drugs.com
worik 4y ago
That all?
ackbar03 4y ago
I have a separate question regarding generics. I know a medication for a rare disease, which typically costs more than 6 figures, is having its patent expiring soon. I would love for generic drug makers (ones in India for example?) to come in and start making the drug for cheaper so it is more affordable for families. However, because it is a rare disease, I don't know if a drug maker would normally be incentivised to do this. But given the sky high costs of the drug pre patent expiration, I think there might be enough demand there for makers to make decent profit. Say I wanted to give them a nudge, or maybe I get some people who I know are ready to pay for it if they make them, showing to the generic makers the demand is there. Does anyone know how I should go about this or if it's possible? Then again I don't know how regulations and stuff work but just hypothetically.
- WesternWind 4y ago
  An interesting question that probably deserves it's own ask HN post.
- evancox100 4y ago
  Maybe contact Mark Cuban’s Cost Plus Drugs? I bet you could write to the guy and get some response. They aren’t manufacturing drugs but may be able to help. Or just contact XYZ large generic drug manufacturer in India
lkjelkj 4y ago
hahaitsfunny 4y ago
If you're angry about this, I can't imagine how angry you'll be when you find out our government sent 40 billion to pay Ukranian pensions from another illegal proxy war they helped start and have funded for the past eight years. The US government doesn't care about its citizenry and the two political parties play off one another to further enable their own agendas and further divide the citizenry. They are no different and neither has our best intentions in mind. They do whatever they can to retain and hold onto power, and once in positions of power they abdicate their duties and do whatever they want or fulfill the agenda of whomever they are bought by. The sooner people start realizing this, the better off everyone in this country, and the world will be. It's not like the US is the only country where corrupt and morally bankrupt leaders are running the show.
- serial_dev 4y ago
  I wish I had your optimism and think that the money the US sends over is to "pay Ukrainian pensions". That money will find its way to corporations, corrupt officials, warlords, weapons manufacturers. Very little of that money will be spent to actually help the average people there and ease their suffering.
  - hahaitsfunny 4y ago
    Oh, I know - most likely it will contribute to more death and destruction or as you described, wind up in some corrupt official / warlord / oligarch's pocket. There are no good guys in corrupt and evil wars, yet people love to try and pick one. If folks new the whole story behind this war and the history of the region and US / NGO intervention in it, before throwing their support blindly behind a cause because their government and media told them to, I believe the sentiment around this war would be much different and no one would be cheering either side on in it. It's just like Medicare and prescription drugs though - trusting citizens expect their government to enact policy that has their best interests at heart. Then they don't, and they turn around and vote for them again anyway. Then they'll wag the finger across the aisle and find some other virtuous cause to distract from the fact they're being screwed over by the very leaders they voted for, that turned around and lied to their faces. Military industrial complex, big pharma, our state-run media - It doesn't really matter what sector the federal government decides to get in bed with, people complain about it and then go right back to the polls to signal their willingness and intent to go through with another cycle of it all over again.
psuresh 4y ago
Indian government's Janaushadhi scheme is for generic push. It is highly successful and one could save 50-70% on genetics. http://janaushadhi.gov.in/ http://janaushadhi.gov.in/
Stratoscope 4y ago
Around 2010 I went freelance and was shopping for medical insurance. I'd been on Blue Shield from a previous employer plan and liked them, so I compared their plans. I was taking one prescription medication that cost $195/month if you paid full retail price. The two plans I was comparing had a $100/month difference in premiums. They were pretty similar in most ways, but the more expensive plan had full coverage for this medication (minus a $20/month copay), and the cheaper plan did not cover it at all. This was a no-brainer, right? Obviously the more expensive plan would be the better deal. Some years later I happened to join Kaiser, and their pharmacy page listed the actual cost of the medication: $23/month without insurance, not $195. And if I bought a 100 day supply the total copay for the three month+ refill was $30. Out of curiosity I checked Blinkhealth and GoodRx, and yes, they each showed a total cost of about $23/month cash payment with no insurance.
- endre 4y ago
  what? how? how can they sell it for $195 then? pharmacy knows if you have insurance and then sells it to you for a more expensive pricetag?
  - Stratoscope 4y ago
    $195 was the retail price for the name brand drug. Even though my doctor had prescribed the generic (which I've taken for many years now - in fact I don't think I've ever taken the name brand), the pharmacies were charging the name brand price for the generic unless you had insurance. One time when Blue Shield messed up on my premium payment and the pharmacy didn't think I had any coverage, I went ahead and paid the full $195 out of pocket to avoid delaying the refill. That was what got me curious about checking the actual cost of what I was buying. Here's how I feel about this: "Nice prescription you've got there. Be a shame if anything happened to it."
    - endre 4y ago
      > unless you had insurance nice. not nice. and I think the same could happen in Europe as well.
jjmorrison 4y ago
This is completely incorrect and fundamentally misunderstands the drug supply chain. The price cost plus lists as typical are just made up. The price they have is just a markup on top of the acquisition price that every pharmacy gets. And the savings the claim are often comparing brand prices to generic prices. First, the consumer view of a brand price is not the same as the 'net price' paid by medicare (there are 20% to even 90% discounts handed by pharma to medicare directly). And second, brands are only dispensed when argued for by the prescriber. The waste and high prices in the system is generated by pbms taking massive discounts from pharma (of which they keep a %) for brand drugs that shouldnt be covered or often even sold. Cost plus pharmacy is vaporware - they are a website which applies a flat markup on top of third party pharmacies that will ship you the med. There are no special discounts, they literally aren't doing anything.
Terry_Roll 4y ago
And would have lowered the GDP of the economy, ergo the state will waste taxpayers money to keep the GDP up, even if it means building up a massive national debt.
ekianjo 4y ago
generics arent the same as the original drug. The level of testing required to get a generics approved is ridiculous (basically just a dissolution profile test) and does not give a full picture at all on how the efficacy and safety profile changes in the body.
jenkstom 4y ago
I'd like to point out that sometimes a "regular" generic is not an option. For instance, anyone who has a sensitivity to one of the non-active ingredients in a medication is going to jump through a lot of hoops to find medication they can take - including decreased outcomes because of "noncompliance". It is very hard to get approval for compounded medication either through private insurance or through medicare or medicaid. I'm thinking specifically of microcrystalline cellulose, but there are other problematic fillers used in medication.

172 points by lxm 4y ago

This is comparing to generic drugs from one specific company, based on the notion that the specific company is capable of providing a cheaper generic drug in a situation most favorable to the drug maker (a bulk purchase). It doesn’t actually go into if the generic will actually be a suitable replacement for each patient. For people with complex health needs, like the over 65+ folks on Medicare, it makes total sense to be on precise, non-generic drugs. I’ve known plenty of people with complex health needs that cannot take the generic, for whatever reason. Hell, I know people with needs like ADHD (a single diagnosis, not a complex health case) that cannot take a generic version.

borski 4y ago
Sure, this is a valid point. But this is not true for the majority of Medicare patients and, importantly, not why this is the case. This is happening because of existing deals and non-competitive drug purchasing.
jpgvm 4y ago
Yeah no. Generics -are- equivalent and regulated to be as such. [1] If you are hearing anything different it's just BS. [1] https://www.fda.gov/drugs/questions-answers/generic-drugs-questions-answers https://www.fda.gov/drugs/questions-answers/generic-drugs-qu...
- throwawaymaths 4y ago
  They aren't perfectly equivalent, but see my sibling comment.
- Spivak 4y ago
  Yes but no. Generics are not 1-1 substitutes because the FDA allows some (a lot) of wiggle room when it comes to bioequivalence. A really good example where this fails miserably is Adderall for ADHD. The generics are absolutely miserable. And if you actually find a generic you tolerate you can never switch pharmacies because they’ll be different. I’m no pharmacological expert but when I asked my pharmacist they explained it to me they said it was because Adderall is a mix of two drugs and it’s expensive to refine them into a balanced ratio but the FDA doesn’t care so generics don’t bother.
  - jpgvm 4y ago
    The rules aren't strict enough IMO but the observed variation is very low in practice. Australia allows very similar amounts of wriggle room in theory [1]. Most people I know in Australia with ADHD are treated with generics (very common among my friend group for some reason) and none that I am aware of have noticed any substantial differences between generics and brand name equivalents but I couldn't quickly find any studies that have investigated this. I wonder if that is due to variation in balance of the included amphetamines (as most of these are multiple active ingredients) though as I doubt that the inactive ingredients would play a significant part. [1] https://www.nps.org.au/assets/fc20fd821a02cf80-8d2289edb5e3-ef59843b3f060818930abb15d5ff4853aaeed461243034ea30c5d77ac475.pdf https://www.nps.org.au/assets/fc20fd821a02cf80-8d2289edb5e3-...
  - tyjen 4y ago
    ADHD medication is an excellent example illustrating the potential "wiggle room" differences between generics and brand drugs. The composition is similar enough to meet FDA generic drug standards, but the rate at which the generic drug mechanisms distribute the drug differs and potentially decreases treatment efficacy for many patients. Though, I do wonder if Vyvanse becoming a generic brand will help solve this dilemma, because the release mechanism is tied closer to the individuals metabolism via hydrolysis of an amino acid rather than relying on release rates set by minor manufacturing differences.
  - saltminer 4y ago
    I believe it's therapeutic equivalence that the FDA is lax on, not bioequivalence. Bioequivalence is just "does it deliver the same amount of the active ingredient," theraputic equivalence is "does it deliver the active ingredient in the same manner." The active ingredient is the same, the inactive ones are where the difference lies. Usually, they're similar enough that it doesn't really matter, but some drugs really do benefit from buying the name brand. A good example is with methylphenidate generics - you get the same amount of methylphenidate, but the name-brand extended release is far more effective than the generic extended release because it spreads the same amount of active ingredient over a longer period (the delivery mechanism created by the inactive ingredients in some generics is subpar). Occasionally, you'll get non-bioequivalent generics that slip through FDA approval, which happened to some methylphenidate generics [0][1]. I remember getting switched to the name brand when this came out, as the supplier for all the pharmacies near me used a non-bioequivalent manufacturer. (Authorized generics don't have this problem since it's literally the name brand with generic labels slapped onto it, but the one the nearby pharmacies could get through their suppliers was not the authorized generic.) [0]: https://www.fda.gov/drugs/drug-safety-and-availability/questions-and-answers-regarding-methylphenidate-hydrochloride-extended-release-tablets-generic https://www.fda.gov/drugs/drug-safety-and-availability/quest... [1]: https://www.reddit.com/r/ADHD/comments/3af86d/fda_rules_2_forms_of_generic_concerta_not_as/ https://www.reddit.com/r/ADHD/comments/3af86d/fda_rules_2_fo...
- ipaddr 4y ago
  Coke and Pepsi and RC Cola are equivalent but they are not the same. People can react differently to equivalent medication.
throwawaymaths 4y ago
Wait what? This analysis is very much a broken window fallacy (fallacy of the seen vs the unseen); there are also very likely individuals "who can only take the generic version" because maybe the dosing schedules/bioavailability are slightly tweaked by the fillers or delivery additive, etc.
jnwatson 4y ago
Generics are literally identical to the original drug.
- ceejayoz 4y ago
  Anecodtally, my wife had significantly different experiences with two different manufacturers of a generic prescription pain management medication that came in patch form. The medication might've been the same, but the amount that made it into her system seemed to vary enormously based on which company’s patches she received. Same dosage, same delivery method. There’s more than just the raw chemical in play in a lot of meds.
- drc500free 4y ago
  Bioequivalent as judged by the FDA does not at all mean identical. ETA: The fact that generics are not “literally identical” is probably the most important scientific, policy, and commercial consideration in that industry. FDA has to determine whether the benefits of lower costs justify the potentially lower efficacy, and set bounds for how different a generic can be and still count as “bioequivalent.”
LarsAlereon 4y ago
There's certainly nobody that can't take a generic medication, barring unusual ingredient allergies. What is actually happening is that people "dialed in" the dose they need on a different formulation of a drug, so they'd need to go through the process of figuring out the correct individualized dose for them if they switch to a different version. It would probably have made more sense for them to have started with a generic version so they don't have to go through this process more than once.

selectodude 4y ago

Note: this is less than one half of one percent of total Medicare spending.

csours 4y ago
A billion here, a billion there, soon you're talking real money
- Clubber 4y ago
  3.6b ($) / 258m (adults) = $14 in taxes per adult in the US, per year.
  - labster 4y ago
    Or $1.4 M each to America’s Job Creators (tm) Edit: Wait, these are payroll taxes. There’s no real benefit to the rich because the taxes are capped. Which is why it’s not worth it to do anything about it, as no plutocrats will get significantly more than the masses.
  - ta988 4y ago
    Just that single problem is around ten basis point of average tax. All these problems compound because to find the hundreds of millions to close a fiscal exercise, things will get cut and never repaired after. So any fiscal inefficiency causes much more damage than just the direct problem.
  - daenz 4y ago
    Death by a thousand paper cuts. No one cut is egregious enough to warrant an emergency, yet you still die.
- paulpauper 4y ago
  except this is a solution that is often touted to cut spending a lot, and second, it's not like finding new solutions becomes easier as earlier solutions are exhausted. Finding one solution is easy, finding dozens...not so much.
- 4y ago

mmmmkay 4y ago

the problem is most capitalists wouldn't dare venture into that arena due to how intrenched the incumbents are. This makes the market highly inefficient due to lack of competition. Good on Cuban for daring to go whether other capitalists will not. I hope it works out for him.

gremlinsinc 4y ago
yeah, good on him, but it'd be so much better if it were an employee co-op. He's still making bank, and eventually could be the amazon of pharmacy undercutting everyone else, and still make a tidy profit. A non-profit or co-op could do the same thing and only aim for a small revenue target in the green, so they stay afloat and can keep paying payroll, and providing good service as needed. I'm eventually planning on branching into this area, if I can get my co-op CRM/ERP software platform finished. I'm wanting a system to manage a network of union/worker businesses that work in syndication and encourage loyalty to in-network brands, through benefits, discounts, etc. Think if you had a software to basically combine worker, consumer, and housing co-ops into a sort of network or social net or mutual aid network where volunteering, working as an employee, or just loyalty as a customer dictates if you've qualified to earn a dividend or free healthcare.

gumby 4y ago

Not just generics. Ever get a coupon from a drug manufacturer that drops your copay from hundreds of dollars to $10 or $20? Ever wonder why? It’s because Medicare gets an automatic discount (I think 20% these days but I’m no longer in the biz) from the manufacturer’s official price. So they simply set the official price at some huge figure and rake in huge bucks from the largest buyer, Medicare. Then they negotiate with the for profit insurance companies and subsidize the copays so that nobody complains to their congress person. It’s a huge rip off. Medicare should be paying a discount to the median price actually paid on the open market. But apparent nobody has an incentive to fix this.

naniwaduni 4y ago
> It’s a huge rip off. Medicare should be paying a discount to the median price actually paid on the open market. But apparent nobody has an incentive to fix this. Then they start issuing rebates instead of discounts? Or yeah, sure, everyone's definitely paying $100 for this quantity of this drug, then we kick insurance back $80 for advertising for every unit that makes it to an end consumer through them. There's no easy way out of price discovery when you are the largest buyer, because it becomes more than profitable enough to structure sales to exploit your policy to make up for the loss in doing the structuring.
- Retric 4y ago
  That's assuming structing actually works here. It's not hard to define average price as cost after all incentives be they rebates or raffle tickets with “zero nominal value.”
- Spooky23 4y ago
  The Federal government and government in general is really good at commodity procurement. The processes and legal requirements give them the ability to price and fairly procure even single source commodities. I’ve done scaled procurements at a very large, not federal level. We were almost always 10-20% lower unit cost than large corporate, and sometimes even better. At the Federal level, the law gives them “most favored” status, and they will sue vendors for fraud if they offer lower prices for the same commodity without lowering the federal cost. “It’s hard” is a common refrain for policy discussions. “That’s bunk” is my reply. Policy without graft isn’t much harder than using high and mighty principles to enrich people at taxpayer expense.

steve76 4y ago

wolfi1 4y ago

I don't know the specifics of the USA, but in Europe some generics are sold out, because they are imported usually from India, and the supply chain is heavily broken

paulpauper 4y ago

Which is a drop in the bucket relative to overall Medicare spending, sadly..

testfoobar 4y ago

$3.6 billion is not a lot of money. Edit: E.g. In 2014, end of life care for age 65+ (final 12 months) is 25% of total Medicare spending. https://www.kff.org/medicare/issue-brief/medicare-spending-at-the-end-of-life/ https://www.kff.org/medicare/issue-brief/medicare-spending-a... "Medicare Spending at the End of Life: A Snapshot of Beneficiaries Who Died in 2014 and the Cost of Their Care"

colinmhayes 4y ago
$10/person year
dehrmann 4y ago
Elon Musk would spend $4.20 billion on a joke.

boberoni 4y ago

This is like a news article/research paper version of a cost savings calculator on a pricing page. You could save 90% on storage costs if you switch from AWS to XCloudProvider This makes me want to dig into the research data and build an interactive cost savings calculator with a slider. It would also probably be a great marketing page for Drugs.com

worik 4y ago

That all?

ackbar03 4y ago

I have a separate question regarding generics. I know a medication for a rare disease, which typically costs more than 6 figures, is having its patent expiring soon. I would love for generic drug makers (ones in India for example?) to come in and start making the drug for cheaper so it is more affordable for families. However, because it is a rare disease, I don't know if a drug maker would normally be incentivised to do this. But given the sky high costs of the drug pre patent expiration, I think there might be enough demand there for makers to make decent profit. Say I wanted to give them a nudge, or maybe I get some people who I know are ready to pay for it if they make them, showing to the generic makers the demand is there. Does anyone know how I should go about this or if it's possible? Then again I don't know how regulations and stuff work but just hypothetically.

WesternWind 4y ago
An interesting question that probably deserves it's own ask HN post.
evancox100 4y ago
Maybe contact Mark Cuban’s Cost Plus Drugs? I bet you could write to the guy and get some response. They aren’t manufacturing drugs but may be able to help. Or just contact XYZ large generic drug manufacturer in India

lkjelkj 4y ago

hahaitsfunny 4y ago

If you're angry about this, I can't imagine how angry you'll be when you find out our government sent 40 billion to pay Ukranian pensions from another illegal proxy war they helped start and have funded for the past eight years. The US government doesn't care about its citizenry and the two political parties play off one another to further enable their own agendas and further divide the citizenry. They are no different and neither has our best intentions in mind. They do whatever they can to retain and hold onto power, and once in positions of power they abdicate their duties and do whatever they want or fulfill the agenda of whomever they are bought by. The sooner people start realizing this, the better off everyone in this country, and the world will be. It's not like the US is the only country where corrupt and morally bankrupt leaders are running the show.

serial_dev 4y ago
I wish I had your optimism and think that the money the US sends over is to "pay Ukrainian pensions". That money will find its way to corporations, corrupt officials, warlords, weapons manufacturers. Very little of that money will be spent to actually help the average people there and ease their suffering.
- hahaitsfunny 4y ago
  Oh, I know - most likely it will contribute to more death and destruction or as you described, wind up in some corrupt official / warlord / oligarch's pocket. There are no good guys in corrupt and evil wars, yet people love to try and pick one. If folks new the whole story behind this war and the history of the region and US / NGO intervention in it, before throwing their support blindly behind a cause because their government and media told them to, I believe the sentiment around this war would be much different and no one would be cheering either side on in it. It's just like Medicare and prescription drugs though - trusting citizens expect their government to enact policy that has their best interests at heart. Then they don't, and they turn around and vote for them again anyway. Then they'll wag the finger across the aisle and find some other virtuous cause to distract from the fact they're being screwed over by the very leaders they voted for, that turned around and lied to their faces. Military industrial complex, big pharma, our state-run media - It doesn't really matter what sector the federal government decides to get in bed with, people complain about it and then go right back to the polls to signal their willingness and intent to go through with another cycle of it all over again.

psuresh 4y ago

Indian government's Janaushadhi scheme is for generic push. It is highly successful and one could save 50-70% on genetics. http://janaushadhi.gov.in/ http://janaushadhi.gov.in/

Stratoscope 4y ago

Around 2010 I went freelance and was shopping for medical insurance. I'd been on Blue Shield from a previous employer plan and liked them, so I compared their plans. I was taking one prescription medication that cost $195/month if you paid full retail price. The two plans I was comparing had a $100/month difference in premiums. They were pretty similar in most ways, but the more expensive plan had full coverage for this medication (minus a $20/month copay), and the cheaper plan did not cover it at all. This was a no-brainer, right? Obviously the more expensive plan would be the better deal. Some years later I happened to join Kaiser, and their pharmacy page listed the actual cost of the medication: $23/month without insurance, not $195. And if I bought a 100 day supply the total copay for the three month+ refill was $30. Out of curiosity I checked Blinkhealth and GoodRx, and yes, they each showed a total cost of about $23/month cash payment with no insurance.

endre 4y ago
what? how? how can they sell it for $195 then? pharmacy knows if you have insurance and then sells it to you for a more expensive pricetag?
- Stratoscope 4y ago
  $195 was the retail price for the name brand drug. Even though my doctor had prescribed the generic (which I've taken for many years now - in fact I don't think I've ever taken the name brand), the pharmacies were charging the name brand price for the generic unless you had insurance. One time when Blue Shield messed up on my premium payment and the pharmacy didn't think I had any coverage, I went ahead and paid the full $195 out of pocket to avoid delaying the refill. That was what got me curious about checking the actual cost of what I was buying. Here's how I feel about this: "Nice prescription you've got there. Be a shame if anything happened to it."
  - endre 4y ago
    > unless you had insurance nice. not nice. and I think the same could happen in Europe as well.

jjmorrison 4y ago

This is completely incorrect and fundamentally misunderstands the drug supply chain. The price cost plus lists as typical are just made up. The price they have is just a markup on top of the acquisition price that every pharmacy gets. And the savings the claim are often comparing brand prices to generic prices. First, the consumer view of a brand price is not the same as the 'net price' paid by medicare (there are 20% to even 90% discounts handed by pharma to medicare directly). And second, brands are only dispensed when argued for by the prescriber. The waste and high prices in the system is generated by pbms taking massive discounts from pharma (of which they keep a %) for brand drugs that shouldnt be covered or often even sold. Cost plus pharmacy is vaporware - they are a website which applies a flat markup on top of third party pharmacies that will ship you the med. There are no special discounts, they literally aren't doing anything.

Terry_Roll 4y ago

And would have lowered the GDP of the economy, ergo the state will waste taxpayers money to keep the GDP up, even if it means building up a massive national debt.

ekianjo 4y ago

generics arent the same as the original drug. The level of testing required to get a generics approved is ridiculous (basically just a dissolution profile test) and does not give a full picture at all on how the efficacy and safety profile changes in the body.

jenkstom 4y ago

I'd like to point out that sometimes a "regular" generic is not an option. For instance, anyone who has a sensitivity to one of the non-active ingredients in a medication is going to jump through a lot of hoops to find medication they can take - including decreased outcomes because of "noncompliance". It is very hard to get approval for compounded medication either through private insurance or through medicare or medicaid. I'm thinking specifically of microcrystalline cellulose, but there are other problematic fillers used in medication.