• what day is it ……

    August 2008
    M T W T F S S
    « Jul   Sep »
     123
    45678910
    11121314151617
    18192021222324
    25262728293031
  • What Have I Missed?

  • what is my consult

  • Archives

medicare reimbursement with generic drugs

When a drug goes generic, the price plunges. But the formula Medicare uses to pay for certain drugs is slow to reflect that price drop, which means the program winds up overpaying for months.

Read all about it in this report out today from Health and Human Services’ inspector general.

drug pricesThe report looks at irinotecan, a cancer drug (sold by Pfizer under the brand name Camptosar) that went generic in February of this year. In March, Medicare was paying $126 per dose of the drug. During the same month, the average generic price was $41, the report found. Even factoring in sales of the branded version, the average price during the month was only $52.

Irinotecan is covered by Medicare Part B, which pays for medicines injected at the doctor’s office and oral cancer drugs. The program likely overpays for other new generics, the report found.

The problem is that Part B uses a backward-looking formula to calculate what it should be paying for the drugs. So when new, lower-priced generics hit the market, Medicare is still basing its payment on prices calculated when only the branded drug was available. During the current quarter, Medicare is paying about $75 for irinotecan — way down from what it was paying in March, but still far above the average price.

The report suggests that Medicare figure out a way to “address pricing discrepancies arising from newly available generic drugs.” That may include pushing for a change in the laws that govern what Medicare pays for drugs, the report suggests.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: