Amid realities of soaring medical costs and Medicare’s depleting budget, a number of recent investigations scrutinize the role of prescription drugs in the nation’s health care spending habits.
In an article this month in The Washington Post, Peter Whoriskey and Dan Keating report on two nearly identical drugs that treat age-related macular degeneration: Avastin, sold for around $50 per injection, and Lucentis, sold for around $2,000. They are equally effective and cost virtually the same amount to produce. Yet doctors choose the pricier drug more than half a million times per year, costing Medicare an extra $1 billion or more annually.
In an early installment of her “Paying Till It Hurts” series for The New York Times, Elisabeth Rosenthal explains that the U.S. far outspends similarly developed nations on medicines per capita, with drugs accounting for 10 percent of the country’s $2.7 trillion annual medical bill.
Unlike its peers, the US. government leaves prices to market competition among pharmaceutical companies, who in other countries are barred from advertising prescription drugs to consumers, Rosenthal writes. Medicare, the largest payer in the health care industry, is unable to negotiate prices with drug makers and cannot restrict payments to the amount of the cheaper alternative. Meanwhile, drug companies aggressively market their more expensive treatments and lobby to restrict the use of cheaper alternatives.
If we value health care value, prescribing practices may be as critical as – or even a factor of – the quality of services provided inside the doctor’s office. The difference between a generic and name-brand drug is worth a transparent conversation between patient and physician. The example of Avastin and Lucentis is evidence that keeping an eye on cost can save health care dollars without inherently sacrificing medical innovation.
In November, ProPublica investigators analyzed prescription data for 1.6 million providers and found that a small fraction of doctors accounts for enormous waste in Medicare spending. In 2011, just 913 practitioners cost Medicare $300 million by choosing expensive brand-name drugs instead of cheaper generics. Of the doctors favoring brand drugs, each wrote at least 5,000 prescriptions that year and many have financial relationships with drug companies. One Los Angeles internist alone could have saved Medicare $5 million, the analysis shows.
The ProPublica report cites Jeffrey Grove, M.D., a Florida doctor who orders generics for his Medicare patients nine out of 10 times, asking: “How many people could we insure that are uninsured right now if those physicians were practicing responsibly as well?”