Americans are overpaying for generic drugs, newspaper says
According to a white paper from the USC Leonard D. Schaeffer Center for Health Policy & Economics, American consumers are overpaying generic drug prescriptions by up to 20% and it’s largely due to industry middlemen known as the name of Pharmacy Benefit Managers (PBM)..
Why is it important: PBMs are powerful, secretive and heavily consolidated, and have a big impact on drug prices in America.
- This report focuses specifically on generics, which account for more than 90% of prescriptions in the United States and 18% of drug spending.
The big picture: PBMs are facing increasing scrutiny from Congress and the Federal Trade Commission, as well as the now usual ire of drugmakers, pharmacies, hospitals and patient groups.
- Among the strategies driving up generic costs, researchers say, are co-payment clawbacks when overpayments for drugs are pocketed by PBMs, as well as spread pricing when a PBM charges a health insurer a price. higher for a drug than the amount it reimburses a pharmacy for – and pockets the difference.
What they say : “Generics are overlooked when we talk about drug pricing issues in this country,” said Erin Trish, co-director of the USC Schaeffer Center. “But the same lack of transparency that is causing outrage over high and growing brand name drug spending is also creating problems in the area of generic drugs.”