Medicare doctors prescribing expensive name-brand drugs over cheaper generics is costing taxpayers hundreds of millions of dollars.  That is the conclusion of a new study from the non-profit investigative journalism group ProPublica.  The research examined Medicare's Part D prescription drug program, and found that a certain group of doctors disproportionately prescribed name-brand drugs even when generic versions were available, costing the program an extra $300 million in 2011.  Doctors can do this because Part D allows low income people to pay the same co-pay for prescription drugs, regardless of whether the drugs are name-brand or generic.  That means customers don't see the price difference, so the added cost is borne by the program.

The entire system of "name-brand" versus "generics" is based on incentivizing new research and development, according to Dr. Marc Fleming, professor at the University of Houston College of Pharmacy.  "Once these drugs go off patent, they're opened up for the masses of people to get a lower price (through generics), which means now these brand-name companies have to go back and come up with the next great discovery," he says.  Most patents allow developers to exclusively sell the drug for 7-11 years, before competition takes hold.  Dr. Fleming doesn't think that changing or doing away with the patent system is the answer.  "If the system didn't exist, or if companies didn't lose patents, we don't know if that would actually hurt new drug development," he says.

Another issue found in the study is that many of the doctors who prescribe name-brand medications have financial ties to the companies that make those drugs.  "Patients believe what doctors tell them," says Dr. Fleming.  "Some patients will tell you only Nexium works for them, even though Prilosec is available generically."  The solution, he argues, is better communication between patients and doctors when it comes to prescriptions.  "Ask your doctor is there any particular reason why you prescribed this drug over the other one," says Dr. Fleming.  "And if they can't give a valid explanation, then patients should request the generic version."