May 7, 2019

How to save $80 billion a year on prescription drugs

Illustration: Rebecca Zisser/Axios

Medicare could have saved almost $80 billion, just in 2018, by matching the U.K.'s prices for prescription drugs that don't have any competition, according to a new study released in Health Affairs yesterday.

Why it matters: Medicare's drug benefit was designed to keep prices in check through competition. But competition doesn't always exist, and the U.S. doesn't have many options to keep prices down in those cases.

  • Unlike the other three countries examined in the study, the U.S. doesn't regulate drug prices.

Details: This study focuses on a group of single-source brand-name drugs in Medicare Part D that have been on the market for at least 3 years. Researchers compared U.S. prices for those drugs to prices in the U.K., Japan and Ontario.

  • On average, after accounting for rebates, Medicare paid 3.6 times more than the U.K., 3.2 times more than Japan, and 4.1 times more than Ontario.
  • The longer a drug was on the U.S. market, the larger that gap grew.
  • If Medicare Part D had adopted the average price from those countries, it would have saved an estimated $72.9 billion on sole-source drugs in 2018 alone.

Between the lines: The Trump administration wants to rely on international prices for Medicare Part B, which covers drugs administered in a doctor's office. But this study shows that there are also a lot of savings to be had in Medicare Part D, which covers drugs you pick up at a pharmacy.

The other side: "An international reference pricing system could result in American seniors losing access to their choice of medicine, and waiting years longer for new breakthrough treatments," the trade group PhRMA said in a statement.

The bottom line: The political interest in cutting drug prices is real, but we're still a very long way from President Trump's stated goal of matching other countries' prices.

Go deeper: The drug pricing maze

Go deeper

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3:30 a.m. ET: 1,203,923 — Total deaths: 64,795 — Total recoveries: 247,273Map.
  2. U.S.: Total confirmed cases as of 3:30 a.m. ET: 312,237 — Total deaths: 8,502 — Total recoveries: 14,997Map.
  3. Public health latest: CDC launches national trackers and recommends face coverings in public. Federal government will cover costs of COVID-19 treatment for uninsured. The virus is hitting poor, minority communities harder and upending childbirth.
  4. 2020 latest: "We have no contingency plan," Trump said on the 2020 Republican National Convention. "We're having the convention at the end of August."
  5. Business updates: Restaurants step up for health care workers. Employees are pressuring companies to provide protections during coronavirus.
  6. Oil latest: Monday meeting among oil-producing countries to discuss supply curbs is reportedly being delayed amid tensions between Saudi Arabia and Russia.
  7. Education update: Many college-age students won't get coronavirus relief checks.
  8. 1 🏀 thing: The WNBA postpones start of training camps and season.
  9. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

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World coronavirus updates: Confirmed cases top 1.2 million

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

The number of novel coronavirus cases surpassed 1.2 million worldwide Saturday night, as Spain overtook Italy as the country with the most infections outside the U.S.

The big picture: About half the planet's population is now on lockdown and the global death toll was nearing 64,800, by Sunday morning, per Johns Hopkins data.

Go deeperArrowUpdated 48 mins ago - Health

U.S. coronavirus updates: Death toll surpasses 8,500

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

Recorded deaths from the novel coronavirus surpassed 8,500 in the U.S. early Sunday, per Johns Hopkins data. The death toll in the U.S. has risen over 1,000 every day for the past four days, since April 1.

The big picture: President Trump said Saturday America's is facing its "toughest" time "between this week and next week." Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said U.S. deaths are expected to continue to rise during this period.

Go deeperArrowUpdated 1 hour ago - Health