Billions Wasted as Medicare Turns Blind Eye to Excessive Brand-Name Drug Prescriptions

Wednesday, November 20, 2013

Officials in charge of Medicare have allowed doctors to routinely, and in some instances excessively, prescribe brand-name drugs to patients when cheaper generics were available, resulting in the government overspending by hundreds of millions of dollars each year.


A ProPublica investigation found that a little more than 900 physicians caused Medicare to spend an extra $300 million in one year alone (2011) on name-brand medicines.


The 913 doctors each wrote at least 5,000 prescriptions that year, making them some of Medicare’s most prolific prescribers. “Many of these physicians also have accepted thousands of dollars in promotional or consulting fees from drug companies, records show,” Charles Ornstein, Tracy Weber and Jennifer LaFleur wrote for ProPublica.


Nearly half of the doctors in the study received at least $1,000 for speaking and consulting on behalf of drug firms since 2009, and 11 were paid more than $100,000.


Top brand-name prescribers cost Medicare more than $1 billion in 2011 alone, a third of which could have been saved had they settled for lower-cost generic drugs.


Part of the problem stems from Medicare’s Part D drug program, which mandates that low-income patients pay less than $7 per prescription—even when a doctor prescribes an expensive brand-name drug.


“The unintended consequence is that doctors can dole out name brands with little fear of pushback from patients about price,” ProPublica reported.


Through Medicare, taxpayers spent $62 billion in 2012 on Part D. More than 30% of this total went towards the low-income subsidy.


One physician singled out by ProPublica was Dr. Hew Wah Quon, whose practice is in Los Angeles’ Chinatown. Quon wrote $27 million in prescriptions from 2009 to 2011 for his mostly low-income patients. But he largely prescribed branded medications. Had he recommended available generics instead, Medicare would have saved $5 million from this one doctor alone.


“Boy, this doctor is a walking economic disaster,” Dr. Jerry Avorn, a Harvard medical professor who has written about the risks and benefits of prescription drugs, told ProPublica.


Quon defended “some of his choices but abruptly ended the interview and has since declined to comment,” ProPublica reported.


Various doctors who also lean toward prescribing brand drugs told ProPublica they do so because they believe they are more effective than generic drugs. However, numerous studies show that generics are just as effective for most patients, according to ProPublica.


“At some point, I think we have to hold prescribers accountable for their prescribing,” Dr. Nancy Morden, associate professor at the Dartmouth Institute for Health Policy and Clinical Practice, told ProPublica. “I just don’t see how that’s different from holding them accountable for the quality of care in the exam room or in the operating room.”


The Department of Veterans Affairs, the U.S. military, and certain private health insurance plans impose limits on the brand-name drugs that doctors may prescribe. Medicare has not requested the authority from Congress to do the same.

-Noel Brinkerhoff, Danny Biederman


To Learn More:

Medicare’s Failure to Track Doctors Wastes Billions on Name-Brand Drugs (by Charles Ornstein, Tracy Weber and Jennifer LaFleur, ProPublica)

Medicare Pays $31 Million per Year for Unauthorized Prescription Drugs (by Noel Brinkerhoff, AllGov)

Medicare Drug Program Fails to Monitor Prescription Safety (by Noel Brinkerhoff, AllGov)


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