Stupid Is as Stupid Does – Why Aren’t Generic First Approvals Automatically on Medicare Part D?

I read four articles this morning (here, here, here, and here) about Medicare and how it can take years to get a generic drug placed on the appropriate tier for coverage after a first generic is approved, and it just makes my blood boil.  With all the press about lowering drug prices and knowing that the Medicare program pays a lion’s share of prescription drug costs in this country, one would think that Medicare would be standing at the FDA doorstep waiting for the announcement of a first generic approval and immediately place it on its formulary at an appropriate tier.  But why should the government save money, right?  Want to buy a $1,000 toilet seat?

This seems like such an easy fix, not only to save billions each year for taxpayers but also for saving out-of-the-pockets of the seniors who must pay higher costs and copays for branded drugs (estimated alone to be $4 billion a year).  What in the world is the government waiting for?

A report from the Association of Accessible Medicines (AAM) states:

“Over the past four years, seniors have been forced to spend almost $22 billion in unnecessary out-of-pocket costs because Medicare Part D plans are increasingly placing lower-cost generics on brand drug formulary tiers with higher copayments.  It is important that policymakers ensure generic drugs are automatically placed on formulary tiers with lower cost-sharing immediately upon launch so seniors reap the full benefit of these less expensive options.”

AAM also states that “only half of those [first generics] that launched are available on Medicare Part D formularies.”

And it is not just Medicare patients that are caught up in the delay.  Due to rebates from brand name drugs and pharmacy benefit managers (PBMs), other insured patients are often paying more for their prescriptions as some of the deals that are made with the insurance companies and health care programs by PBMs lock out generics, resulting in higher cost shares for covered patients.  I remember the days before PBMs and the rapid price decreases that occurred when generic products were first approved; now it is sometimes a wait and see or a significant delay that must first occur after first generic approval.  Will the administration do something about this?  With the way the WH (White House or, in this case, the Waffle House) flip flops on drug pricing, it is anyone’s guess.