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Discarded Medicare Part B drugs led to $1.4 billion in wasted spending in 2017 and 2018, according to a new report from MedicareAdvantage.com, a Medicare insurance broker.
The study analyzed claims data from the Centers for Medicare & Medicaid Services, finding that Medicare spent $695 million on discarded drugs in 2017 and $725 million in 2018. Cancer and chemotherapy drugs accounted for most of the unused drug waste
Why weren’t these potentially life-saving drugs used? Fierce Healthcare reports that in many cases, a single-dose vial contains a higher dose than is needed, leading to the excess being discarded.
For 49 drugs, Medicare wasted more than $49 million in 2018 alone.
The $1.4 billion in waste could have covered a year’s worth of insulin for more than 3.3 million Americans, according to the study.
The report also pointed to the traditional “buy and bill” model for providers stocking Part B drugs. A provider, such as a hospital or clinic, buys vials of a therapy and then bills when they’re used, incentivizing the waste of any excess product to secure the full reimbursement per vial. It’s also a great deal for drug manufacturers.
“Profits are increased by billing for the whole vial, even if only a portion of it is needed and used,” the analysts wrote. “Doctors and hospitals also enjoy bloated profit margins under this system.”
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