As health insurance costs and government spending on health care continues to increase, many people are looking for ways to reduce costs. A recent report by the American Enterprise Institute (AEI) examines the costs associated with name-brand drugs and Medicaid spending.
AEI observed two-thirds of the $21.8 billion spent by Medicaid on medications last year according to The Hill. The research conducted by AEI found that Medicaid could have saved $271 million using generics instead of name-brand drugs for just 20 prescription drugs. They also found that out of that $271 million, only 2 drugs made up for $95 million of the spending.
Ralph Neas, the head of the National Coalition on Health Care, said, “Rising pharmaceutical costs, the aging population, and the increased use of costly specialty drugs makes containing drug-related spending an urgent health system priority closely linked to expanding access to care and improving quality.”
Unfortunately, health care reform did little to control rising costs of the health care industry and efforts to import drugs from Canada were squashed in the health care debate.
Instead, health care reform focused on the health insurance industry without looking at reasons for increases health insurance costs. There are many drivers behind health insurance rates and paying for brand-name prescriptions is just one of them.
Many health insurance companies offer better copayments for generics because they are a lot more affordable. Still many brand name drugs have patents protecting them for years. Until those patents run dry, brand name drug costs will remain high for the government, health insurance companies and Americans.