A Hidden Cost in Medicare Drug Benefit: ‘Reference-Based Pricing’

Posted by Jacob Goldstein in the Wall Street Journal Health blog Seniors who insist on getting a brand-name drug when a generic version is available may wind up paying a high price. That seems fair enough: Why should the Medicare drug benefit pay extra because someone refuses to take a generic? The problem, this morning’s WSJ suggests, is a lack of transparency that may leave seniors unaware they’ll be on the hook for the higher price of the branded drug. “I am concerned that beneficiaries could find themselves paying far more out-of pocket than they expected,” Rep. Pete Stark (D., Calif.) recently wrote in a letter to the Centers for Medicare and Medicaid Services. Today, the AARP is going to issue a warning to seniors and send a letter to CMS complaining about the lack of disclosure around the practice, known as reference-based pricing.