Frugal Seniors Up Medicare Drug Plan Cost

Study: Seniors Opt For Expensive Drugs Over Generics When Government Is Footing The Bill

(AP)  Seniors who switch between low-cost generic drugs and the original products based on who's footing the bill are likely driving up the cost of the government's Medicare drug plan, according to a new study.

Figures released Thursday show seniors are more likely to ask their pharmacist for generic medications when they are paying, but choose the more expensive originals when the government is covering the costs.

The study was published by Medco Health Solutions Inc., a drug benefit manager that handles prescriptions for about 20 percent of Americans. Prescription benefit managers earn more money when patients choose cheaper medications.

While the Medicare drug benefit has pushed up the country's overall health care spending, the program's budget has actually come in below estimates, which federal officials attribute to a greater use of generic drugs and competition among insurance companies.

Generic drugs are medically indistinguishable from the original products, and can cost up to 80 percent less. They account for two-thirds of all prescriptions dispensed in the U.S, according to research firm IMS Health.

However, the figures from Medco suggest some patients are still more comfortable taking medicines from the original manufacturer.

"It may be a question of education, that some people simply believe brand-name drugs work better than generics," said Tricia Neuman, a vice president with the Henry J. Kaiser Family Foundation. Research also shows that doctors often don't talk about the potential cost savings of generic drugs, she added.

Kaiser, a nonprofit research group, estimates the average out-of-pocket expense for seniors in Medicare taking generic drugs will be $5.32 this year, nearly six times less than the $29.86 paid by seniors taking branded drugs listed by insurers.

Despite the potential cost savings, Medco found that nearly two-thirds of prescriptions initially filled by patients in Medicare were for branded medications.

The majority of seniors only switched to generics after they reached the point in spending when users must pick up the whole cost of prescriptions.

"Medicare beneficiaries become acutely aware of the cost difference between brand-name and generic drugs and most make the switch," said Medco Chief Medical Officer Woody Eisenberg.

But Medco also found that when seniors' drug costs reached the "catastrophic" phase and are again covered by Medicare, 59 percent of prescriptions are for branded drugs.

An official from the federal Centers for Medicare and Medicaid Services said the agency could not confirm the figures cited by Medco.

Overall, the federal government and beneficiaries through their monthly premiums will spend about $47 billion on the Medicare drug benefit this year.

Actually wouldn''t it be just as true to say that senior drive down the costs of medicare? If they take the cheaper generic drugs after reaching the donut hole, they have less chance of escaping the 100% costs hole at all, thereby relieving the government of the 95% ocsts of the "after hole" drug usage. Obviously, those 59% electing to return to the higher priced drugs when they reach the catastrophic level, and the government''s hand is back in the picture, are fewer than the 66% electing the higher priced drugs on the beginning end of the program. And don''t let us forget that there are those in the hole that simply forgo their medications until next year when the program starts all over again and they qualify for government assistance. If they die while saving the government money, I guess that is a good thing, huh?

[slim1h2o]

But the MD is usually either too lazy or to ignorant to prescribe for generics.


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Posted by eggy1620 at 11:55 AM : Sep 25, 2008


Or that Big Pharma has its hand in the doctors pocket, that''s the most likely the case.
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And to;

Posted by tlparp at 06:56 PM : Sep 25, 2008


You should be ashamed of yourself for allowing your mother-in-law to become sooo bored, that she ends up waisting a doctors valuable time. You should have recommend that she visits a nursing home, or some other voluntary work, that she can do.

[wogerwabbit]

"Generic drugs are medically indistinguishable from the original products"

That''s not true at all! I do synthroid every day and the generic they keep trying to foist upon me is NOT the same by any means. This is a replacement hormone, so to speak and is very subtle. When I tried the generic for 3 months after a year doing synthroid, I was surprised and disappointed to find it didn''t work as well as it was supposed to... it wasn''t the same... so I won''t do it... and it comes out of my pocket and well worth the expense.

[tlparp]

The point is people will always look for the cheaper way if they are paying for it. If it''s on somebody else''s dime, what do they care. I see this every day with my patients, and even family members. If they have Medicare and a private insurance supplement, so they are not paying anything out of pocket, they have numerous visits, numerous prescriptions - many unncessary - because it doesn''t cost them anything. There should be a copay on every visit and every prescription, even if the patient has a supplemental policy. If the copay were $2, at least the patient would stop to think before they made a visit that is essentially social in nature. My mother-in-law goes to a doctor 2-3 days a week, mostly because she''s bored and it''s somewhere to go. She will stop in to have the nurse check her blood pressure, or review her meds, or with a complaint that she got a cramp in her hand this morning, etc. You and I are paying for this, but in her mind, it''s free because SHE doesn''t have to pay anything for it.

[rudy654-2009]

I always go for generic. They are just as good as the name brands, so why waste the money on name brands?

[seetheway]

"Generic drugs are medically indistinguishable from the original products, and can cost up to 80 percent less."
This is not exactly true, Zolpidem, a generic for Ambein, was completely different in it''s effect when I took it. The are NOT the same!

Plus some brand names and it''s generic counterpart are made by the same company, which is a deceitful practice!

[mtngurl8]

It should be a requirement that if the generic is available it should be prescribed by the Dr. or offered by the pharmacy for every medicare consumer. And as for taking generics at your own risk I smell a pharm. rep commenting there is no difference except packaging.

[eggy1620]

This is not the patients fault as the article seems to suggest. It is the responsibility of the prescribing physician to write the order for generic. Then the pharmacist would not even have to ask do you want brand name or generic. But the MD is usually either too lazy or to ignorant to prescribe for generics.

[drivelphobe]

They shouldn''t allow the manufacture of generics. The original pharmaceutical company that developed the drug should have the patent forever. Generics are inferior in many ways to the Brand name, so take them at your own risk.

[ocasanas]

Duh!

[hologram5]

What a CROK!! This is pure propaganda. This is NOT the reason for the health industry skyrocketing prices. It ALL comes down to GREED!! Plain and simple.

[gramto8]

At CBSNews they really do need to get a better editor for their online news site. The title of this article insinuates that all seniors are putting the shaft to America by buying the more expensive brand name drugs if Uncle Sam is paying and going on the cheap if he isn''t. Once you get into the article, you find that this ''just ain''t so.'' In fact the program has cost less than originally projected to cost. Why couldn''t THAT have been stressed instead? I know! I know! That wouldn''t have made for a good headline. But it doesn''t seem right to accuse seniors of driving ''Up Medicare Drug Plan Cost'' either.