Everyone complains about the high cost of prescription drugs, but not many people try to do anything about it. An admirable exception is the Department of Health and Human Services (HHS), which recently proposed a pilot program to change the way Medicare reimburses doctors for medications they administer directly to patients, as opposed to those distributed through pharmacies or hospitals.
At present, the doctor gets the average price of a drug plus 6 percent, a clear incentive to use higher priced drugs instead of lower priced equivalents. HHS wants to make the reimbursement 2.5 percent plus a flat fee. The idea is to curb Medicare spending on physician-dispensed drugs — which grew from $9.5 billion in 2005 to $22 billion in 2015 — without harming quality of care.
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