Brand or Generic – Whose Paying?

I spoke about this months ago, but a Medco study provided good real data on this.

It’s different when you are spending your own money versus someone else’s money.

Medco found that seniors on Medicare chose branded drugs when covered, generic drugs during the donut hole (i.e., paying out of pocket), and many chose branded drugs again when they got through the donut hole.

This was consistent with a point I have talked about where consumers believe they are getting a better “deal” on the branded drugs.

Would I rather pay $20 for a $100 product or $10 for a $30 product? In one case, I am saving 80% and in the other I am saving 66%. That’s one of the challenges in our healthcare system.

Imagine applying that to a surgery…would I rather pay $2,000 for a $10,000 surgery or $1,000 for a $3,000 surgery.

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