Prescribing older generics could've saved Medicare $17.7B, study finds

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Between 2011 and 2017, Medicare could have saved $17.7 billion if generic versions of older medicines were prescribed instead of updated brand-name drugs launched by drugmakers to replace their older off-patent pills, according to a new study published in the Annals of Internal Medicine.  

In one instance, researchers found that between 2011 and 2017 Medicare spent $13.4 billion on Nexium, an acid reflux pill manufactured by AstraZeneca. However, Medicare could have saved $12.7 billion if physicians instead prescribed a generic version of AstraZeneca's older acid reflux pill called Prilosec. The drugmaker launched Nexium after the patent expired on Prilosec. While they are chemically similar drugs, Nexium is considered a new compound protected by patent.

As patents expire on older medicines, drugmakers often use this tactic known as chiral switching to preserve sales of a drug.

While the pharmaceutical industry defends the practice, claiming the newer, updated brand-name drugs are more effective or safer, other studies have found that these updated medicines offer marginal or no therapeutic advantages, according to STAT

Based on their findings, the study authors suggest that Medicare Part D plan sponsors should encourage the prescribing of older generic versions of drugs, until drugmakers can demonstrate added benefits or improved outcomes from their updated brand-name versions. 

Access the full study here

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