Uncovering the Economics of Paying Cash for Generic Drugs with Ge Bai

To read the full article and show notes with links mentioned as well as a full transcript, click here.

In this episode, Stacey Richter talks with Dr. Ge Bai, a professor at Johns Hopkins, about the rationale and financial implications of paying cash for generic drugs instead of using insurance. The discussion highlights the inherent inefficiencies and high administrative costs associated with PBMs (Pharmacy Benefit Managers) and insurance systems when it comes to low-cost generics. Key insights from studies are discussed, revealing that for a significant portion of generics, paying cash is often cheaper than using insurance. The conversation also explores alternative solutions such as Health Savings Accounts (HSAs) and the role of policy and market dynamics in improving drug affordability.

Love the show? Please consider signing up for our weekly newsletter. We'll send you an article covering the latest episode with show notes, mentioned links and a transcribed intro. Join the RHV Tribe.

06:13 What is the background on generic drugs that is need-to-know?

06:39 EP344 with Steven Quimby, MD.

07:04 Do we have affordability for generic drugs?

15:40 What’s the policy failure around generic drugs?

18:34 Why is there a huge health equity issue?

20:13 How do PBMs have both a monopoly and a monopsony?

21:59 What should be the goal for cheap generics?

23:36 “Whenever we have no competition, we’ll see high price.”

26:00 What’s the best approach to addressing operational challenges behind generic drug costs?

28:42 How do we solve generic drug costs on the back end?

31:15 “Healthcare insurance is not the same as health.”

36:07 “It’s time for us to reflect and think whether there is a better way to try.”