JAMA Article Finds Medicare Overspent on Generics by $2.6 Billion, Costco Delivered Better Value

A recent article published in JAMA Internal Medicine compares Medicare drug spending on generics to Costco. The researchers found that switching to Costco would have saved $2.6 billion in Medicare overspending in 2018 alone. The authors note that Costco is designed with value in mind and that savings are passed on to customers.

The authors remark, “Costco’s streamlined distribution system could have saved $2.6 billion on these 184 drugs. With generic medications accounting for 22% of Part D spending, eliminating generic overspending could significantly reduce beneficiary premiums and federal spending,” adding, “More transparency and competition in the supply chain would help, as would improvements to Part D to enhance competition among plans.” Read more here.

(Source: Maggie Fox and Tami Luhby, CNN Health, 7/6/21)