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GENERICS Cost-Shift to Diabetics (Reuters)

Reuters is reporting on a new study that shows cost shifting by Walmart, K-Mart and others in generics and brand pharmaceuticals.  Everyone has taken advantage of the cost savings provided by the big box retailers when they dropped generic script prices to a few bucks per fill on commonly prescribed generic pharmaceuticals.  Even if one does not shop at K-Mart for their family pharma, the pricing in the community sets a standard on which others must adjust their consumer charges.  The new study shows that this has been at the direct expense of other lines of prescription pricing, noting that prices for brand name diabetic prescriptions in some cases have doubled.  The moral of the story might be that “there is no free lunch” or it could be a cautionary tale about watching the entire market-basket impact of any pharmaceutical contract.  Time for a meeting with your PBM?  Where did we file our formulary?  Has anyone reviewed pharmacy claims lately?

The Reuters article quotes Dr. Ronald Tanner, an endocrinologist at NY Mt. Sinai Hospital and co-author of the study, “Since 2008, everybody has lowered generic prices to the level of Wal-Mart, but the differential in pricing for brand-name drugs is huge.”  His work showed that there were increased costs in branded diabetic drugs across-the-board that reflected 32%-35% increases at Walmart and K-Mart over the same period that generics were being adjusted to loss-leader levels.