Medicare Part D beneficiaries could have saved more than $600 million through generic substitution of brand name drugs, HHS reported.
The analysis found that Medicare spent nearly $9 billion in 2016 on brand name drugs through Part D plans, although generic equivalents were available. Had the prescriptions been dispensed as generics instead, the program and its beneficiaries would have had savings of almost $3 billion, HHS claimed, although it did not include rebates or discounts in its calculation.
“Recent press coverage of price increases for brand drugs when generics are available highlights a potential need for regulatory or policy action,” HHS said.
The report said that although price reductions from generic competition created considerable savings for Part D and its beneficiaries, “incompletely aligned incentives for generic substitution” resulted in missed opportunities for more savings.