Study: Brand Name Drugs Drive Up Medicare Spending

A new study suggests that cash-strapped Medicare missed an opportunity to save more than $1 billion by not addressing the varying costs and use of prescription drugs.

Comparing Medicare enrollees and those on the U.S. Department of Veterans Affairs (VA) health plan, researchers found that Medicare beneficiaries were up to three times more likely than VA patients to choose higher-cost brand name drugs over generic brands, according to the Annals of Internal Medicine report.

“The main issue, and the only way to fix this, is to change what physicians are doing,” said Dr. Walid Gellad, a lead author and internist with the VA Pittsburgh Healthcare System and the University of Pittsburgh.

Physicians in the VA system follow an approval process that requires them to try the generic drug before they prescribe a patient the brand-named version. The system also limits their providers’ interactions with pharmaceutical representatives, which Gellad said can alter the way a doctor chooses to prescribe certain drugs.