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Excessive Medicare Part D Reimbursements for Generic Drugs

Medicare Part D plan sponsors reimbursed pharmacies for generic drugs at excessively high rates during 2021, according to a study of reimbursement rates, which were more than 10 times the acquisition costs for a number of agents. The authors conclude that these “findings are concerning because generics represent over 90% of dispensed prescriptions, and excessive reimbursements result in increased patient out-of-pocket costs.”

For the top 50 generic drugs based on spending, the researchers obtained the median amount a Part D plan reimbursed an in-area pharmacy for the formulation with the greatest use. The ratio between the reimbursed amount and the drug acquisition cost based on national averages was evaluated for each Part D sponsor.

The results showed the following: “Part D plans reimbursed generics at a mean of 5.4 times acquisition costs (95% CI, 3.9-6.8). Reimbursement rates were highest for Rite Aid (reimbursement to cost ratio, 10.6; 95% CI, 6.3-14.9; mean reimbursement, $8.6/unit), followed by Cigna (7.2; 95% CI, 5.2-9.2; $4.9/unit), CVS Health (6.2; 95% CI, 3.6-8.8; $6.8/unit), Centene (5.7; 95% CI, 4.3-7.1; $3.5/unit), UnitedHealth (4.3; 95% CI, 3.4-5.1; $1.5/unit), and Humana (2.2; 95% CI, 1.5-3.0; $2.4/unit). Rite Aid reimbursed 12 drugs at over 10 times cost, followed by Cigna (9 drugs), Centene (6 drugs), CVS Health (5 drugs), Humana (2 drugs), and UnitedHealth (1 drug).

“Imatinib 400 mg and aripiprazole 5 mg had the largest reimbursement to cost ratios. Imatinib 400 mg had an acquisition cost of $4.20 per tablet but was reimbursed at a mean of $126.05 per tablet. Aripiprazole 5 mg had an acquisition cost of $0.17 per tablet but was reimbursed at a mean of $3.16 per tablet.” The authors note that a limitation of the study was lack of data on claw-back amounts that could offset the point-of-sale reimbursements.

Source: JAMA