Americans often shell out extra for generics due to hazy pricing practices from pharmacy benefit managers and other middlemen, according to a new report from researchers at the USC Schaeffer Center in Los Angeles.
Three notes from the May 31 report:
1. U.S. consumers pay inflated prices that may be 13 percent to 20 percent too high for generics.
2. Both privately insured beneficiaries and Medicare beneficiaries overpay for generics. The report references an analysis from Schaeffer Center researchers that found Medicare Part D stand-alone drug plans in 2018 paid $2.6 billion more for 184 common generic medications compared to the same drugs available to cash-paying Costco members. The same analysis found similar overpayments in a sample of commercial claims, though they were slightly less common than in Medicare claims.
3. Commercially insured patients' copayments for a generic prescription exceeded the total cost of the medicine 28 percent of the time, a 2018 study cited in the report found. The average overpayment was $7.32.
"Generics are overlooked when we talk about drug pricing issues in this country," said Erin Trish, PhD, study co-author and co-director of the USC Schaeffer Center. "But the same lack of transparency that is causing outrage over high and rising spending on branded drugs is also creating issues in the generic drug space. If you filled a prescription for a generic medicine recently, there is a good chance you overpaid."