Vermont’s Medicaid program wastes more money per-patient on brand-name pharmaceuticals than any state in the nation, according to a new report from the right-leaning American Enterprise Institute for Public Policy Research.
That would have been the lead on a story in tomorrow’s editions of The Times Argus and Rutland Herald. But it turns out there’s more than meets the eye to this AEI report, which is starting to generate headlines nationwide.
In addition to being a research fellow at AEI, the report’s author, Alex Brill, is a paid consultant for the generic-drug manufacturer TEVA Pharmaceuticals (a fact he failed to disclose during an interview earlier today). And some of the key variables he used to calculate Medicaid “waste” on higher-cost brand-name drugs, according to a top Vermont health official, are “grossly incorrect.”
Brill’s report, which tracked data for 20 commonly prescribed drugs, concluded that Vermont could have shaved $5 million from Medicaid costs in 2009 alone simply by choosing generic pharmaceuticals over their more expensive brand-name counterparts.
The additional costs, Brill said, amounted to an average of $31 per Medicaid enrollee, tops in the nation.
“States have the ability to do things differently,” Brill told the Press Bureau today. “And states that are spending more should be looking at other states to see what lessons they can learn.”
Susan Besio, head of the Vermont Department of Health Access, says it’s Brill who ought to be doing things differently. Brand-name drugs may carry higher retail costs than generics, Besio said. But federal rebates for branded pharmaceuticals, according to Besio, can make the net cost to states well below that of generics. In fact by choosing brand-name drugs in some instances, Besio said, the state spent $6.4 million less 2009 than what it would have paid had it gone with generics across the board.
Besio said her office monitors the price of generic drugs as soon as they come on the market. When the net cost of those generics dips below the brand-name option, she says, the office immediately shifts prescribing protocols.
“There is absolutely no ‘waste’ in spending on these brand drugs, and we monitor the list on a frequent and regular basis,” Besio said in an e-mail.
Whether federal rebates for brand-name drugs make for sound fiscal policy is perhaps fodder for a separate study.
Comments