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Research Letter
July 6, 2021

Comparison of Spending on Common Generic Drugs by Medicare vs Costco Members

Author Affiliations
  • 1Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles
  • 2Department of Pharmaceutical and Health Economics, School of Pharmacy, University of Southern California, Los Angeles
  • 3Department of Health Policy and Management, Price School of Public Policy, University of Southern California, Los Angeles
JAMA Intern Med. 2021;181(10):1414-1416. doi:10.1001/jamainternmed.2021.3366

Efforts to control drug prices have highlighted the role of the pharmaceutical supply chain. Rather than driving efficiencies, this complex web of highly concentrated intermediaries with proprietary contracts may instead raise prices.1

Much attention has focused on brand name drugs, although recent reports show that intermediaries can capture significant profits in the generic market as well.2 With 88% of Medicare Part D prescriptions dispensed for generic medications in 2018,3 excess profits retained by intermediaries in the generic supply chain could be substantial. This analysis compared the amount Medicare pays for common generic prescriptions in Part D with prices available to patients without insurance at Costco.

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    2 Comments for this article
    Cost of Common Generic Drugs for Costco Members and Non-Members
    Michelle Cochran, MD | Vanderbilt University Medical Center, Dept of Psychiatry
    Non-Costco members are allowed to use the pharmacy without joining.
    Reply to Dr. Cochran
    Erin Trish, Ph.D. | USC Schaeffer Center for Health Policy and Economics

    We appreciate Dr. Cochran's interest in our article.

    People who are not Costco members can purchase prescription drugs from Costco, but prices differ for members and non-members. In our study, we were unable to estimate the magnitude of this difference for the drugs in our sample, given the information that was available to us.

    CONFLICT OF INTEREST: These are described in the COI statement for the research letter