Researchers Find Overspending in Generic Drug Market, Advocate for More Transparency

Researchers from the USC Leonard D. Schaeffer Center for Health Policy & Economics are pushing for more transparency in the pharmaceutical supply chain and policy changes in the generic drug sector. Their recommendations, published in a white paper on May 31, were based on their findings that PBMs and health insurers cost patients, employers and the federal government billions of dollars per year in the generic drug market.

Karen Van Nuys, Ph.D., one of the paper’s authors and executive director of the Center’s Value of Life Sciences Innovation Project, tells AIS Health, a division of MMIT, that she recommends changes in the way pharmacies set their cash prices as well as in some formularies that favor branded drugs over generics and so-called spread pricing, where PBMs reimburse pharmacies one price, charge health plans a higher price and pocket the difference.