As the recession continues to ravage Iowa’s budget, it has become an urgent imperative for our lawmakers to drastically cut state expenditures. Some of those cuts may hurt. But we can also make common sense choices that won’t hurt at all.
It goes without saying that generic versions of brand name drugs are less expensive. But a recent study showing just how much money states are wasting on brand name drug prescriptions should raise eyebrows. Economist Alex Brill analyzed Medicaid spending on 20 different brand name drugs that had generic equivalents available but not being fully utilized. Brill calculated how much money could be saved if the brand name drugs had been fully replace with generic versions, and found a whopping $271 million in missed opportunities for savings.
You read that correctly – Medicaid is wasting hundreds of millions of taxpayer dollars reimbursing brand name drug prescriptions when generic equivalent versions are available. That’s an average of $96 per prescription among the 20 drugs Brill analyzed.
The implications of this study are clear. In the face of this uphill battle to curb spending while maintaining a high level of care for all Iowans, lawmakers in our state must take generic drug utilization into strong consideration. Taxpayer dollars must be stretched as far as possible. And the money Iowa would save if we fully utilized generic drug substitution in Medicaid would go a long way toward helping Iowa balance its budget.
If we are to get serious about balancing the state’s budget, we have a long road ahead. But common sense choices like these are one way we can make this an easier trip.
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