Thread by @DrHussainL

NEW STUDY: Medicare could have saved up to $3.6 billion in 2020 if it bought 77 generic drugs at prices by Mark Cuban's @costplusdrugs prices! 💵💵💵

Published today in @AnnalsofIM with @bnrome @akesselheim via @PORTAL_Research

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https://twitter.com/EricTopol/status/1538992603881820161

1. The @costplusdrugs launched in January 2022 selling generic drugs at the cost of manufacturing + 15% + $3 pharmacy fee + $5 shipping.

We compared the unit price for 89 of 109 drugs sold in February to what Medicare Part D plans paid in 2020 @CMSGov ...

2. We found that Medicare spent $9.6 billion on 89 generic drugs in 2020.

It could have saved up to $3.6 billion on 77 of the 89 drugs if it purchased them at the largest quantity sold by Mark Cuban's Cost Plus Drug Company.

The other 12 drugs ($1.5B) did not offer savings..

3. Of the $4.5 billion in spending where savings were able:

- 43% went towards making the drug 💊 ($1.9B) 💰💰💰

- 30% to shipping 🚛 ($1.4B) 💰💰

- 18% to Pharmacy fees @truepill_rx ($820 M)

- 9% margin ($402M)

4. Distribution (shipping +pharmacy) cost MORE than making the drug, especially if you buy a 1 vs. 3-month supply

Though @costplusdrugs does not sell by month-supply, it sells by the count which can be tricky.

Carvedilol is taken twice daily. A 90-day supply is 180 pills...

5. The 10 generics with the big savings for Medicare:

-esomeprazole
-rosuvastatin
-aripiprazole
-duloxetine
-losartan-hydrochlorothiazide
-ezetimibe
-memantine
-tizanidine
-colchicine
-bupropion XL

Medicare paid $1.77/pill for esomeprazole.

Mark Cuban sells it for $0.19!

6. Limitations:
-We were unable to look at out of pocket costs that Medicare recipients pay with Medicare Part D dashboard data unfortunately

-This is a conservative estimate, actual savings likely higher b/c of our methods (highest unit price by strength and NADAC adjustment)

7. Policy: The price transparency provided by @costplusdrugs is helping us to understand the cost of many generic drugs & highlights inefficiencies in the supply chain for generic drugs.

Look at this hypothetical for a $100 generic drug:
-Insurer
-PBM
-Pharmacy
-Wholesaler

9. Notice there are multiple actors involved in distributing the drug from the pharmaceutical manufacturer to the patient.

Mark Cuban's company does not accept health insurance, buys from the manufacturer and sells it directly to consumers online!

10. Their focus is on generic drugs and it helps people who are:

1) uninsured, or

2) underinsured with high deductibles the most!

But, We know the BIGGEST problems are:

- Expensive brand-name drugs at pharmacy💊
- Infusions at clinic/hospital 🏥

Not generics!

11. Brand-name drugs are NOT included in this analysis or sold by the company (yet).

Even still, the supply chain costs for brand-name drugs are COMPLETELY different.

Look at this hypothetical for a $100 brand-name drug (before rebates).

Lower % of $$ goes to supply chain

12. We know that many drug prices are outrageous, and the supply chain is also expensive & NOT working right.

We need a system that delivers innovative, affordable, and accessible medicines for all Americans. #Pharmacoequity 💊

This requires innovation + policy reform....

13. We need to realign incentives that put patients, families, and seniors over profits.

@AARP's call to action below:

@drsforamerica @Public_Citizen @P4AD_ @FamiliesUSA @P4ADNOW @SpeakerPelosi @SenSchumer @RonWyden @SenSanders @SenFinance @MikeCrapo @RepJerryNadler