New Jersey Tops Country in Prescribing Brand-Name Drugs

Andrew Kitchenman | November 20, 2013 | Health Care
Overuse of brand-name medications vs. generics costs Medicare Part D billions annually

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New Jersey Medicare recipients are more likely to be prescribed brand-name drugs than their counterparts anywhere else in the country, putting the Garden State at the forefront of a national trend of what some say is a wasteful overprescribing of brand-name medication.

The public-interest watchdog ProPublica published an article on Monday detailing how Medicare fails to rein in prescribers’ overuse of brand names compared with generic drugs, which can be equally effective. That leads to higher costs, which are borne by federal taxpayers, who subsidize the Medicare program.

ProPublica has also created a tool that makes it possible to search the Medicare database by doctor, city, and ZIP code to see the number of brand-name drugs that have been prescribed by individuals or by location.

The information ProPublica compiled for the report makes clear that practitioners in New Jersey are ahead of the curve in prescribing brand names through the Medicare Part D benefit, which provides for prescription drugs. Of the prescriptions that New Jerseyans receive, 28 percent specify brand names, ranking it first in the country and well above the national average of 21.2 percent.

The information about Medicare Part D is available because the program is publicly financed. It’s unknown whether the trend in favor of brand-name drugs also applies to those with private insurance.

But New Jersey is only 12th in the total number of brand-name prescriptions, outranked by nine states with larger populations, as well as Tennessee and Missouri, whose residents receive more Medicare Part D prescriptions despite having smaller populations.

Medicare patients began to receive prescription drug benefits in 2003, when the Part D program was enacted. The ProPublica report points out that part of the unnecessary cost is the result of a well-intended provision of the law that created the program, which requires that low-income residents pay less than $7.00 for prescriptions, without regard to how much the drug costs. More than one-third of the $62 billion that taxpayers spent on the Part D program went to subsidize prescriptions for low-income residents, according to the report.

Rutgers-Camden law professor Michael A. Carrier said it was troubling that the state led the country in using brand-name drugs. He has written about the legal and competitive issues that surround the use of brand-name drugs compared with generics.

“There is a significant difference between the price of brand-name and generic drug medications,” Carrier noted, adding that overuse of brand-name drugs can be costly for both the Medicare program and for private insurance. “That’s something we need to think about, because sometimes the generic will serve the patients just as well as the brand.”

Carrier said he is only in a position to speculate about the reason why New Jersey doctors are first in the percentage of brand-name prescriptions, but noted the state’s resident industries may be a factor.

“With a lot of the pharmaceutical industry set in New Jersey, perhaps that has an effect,” he said.

ProPublica reporters Charles Ornstein, Tracy Weber, and Jennifer LaFleur found that a relatively small number of doctors were responsible for a disproportionate share of the brand-name overprescribing, with fewer than 1,000 internal medicine, family medicine, and general-practice doctors nationally costing taxpayers an additional $300 million in 2011.

Among those heavy brand-name prescribers was Union City internal medicine doctor Gilberto Gastell. He wrote 17.5 percent more Medicare Part D prescriptions than any other practitioner in the state. Of Gastell’s prescriptions, 42 percent were for brand names, much higher than the state average of 28 percent.

The ProPublica report also points out the apparent conflict of interest that arises when doctors receive speaking fees from pharmaceutical companies and then prescribe their products. For example, Gastell earned $8,500 in speaking fees from Novartis from 2010 to 2012 and was fifth among all practitioners in the country in prescribing Novartis blood-pressure medication Diovan HCT in 2011. He also received $28,050 from GlaxoSmithKline from 2009 to 2011 and was seventh in the country in prescribing the company’s antibiotic Bactroban in 2011, according to data drawn from the ProPublica report. Gastell didn’t return a voicemail message yesterday.

Officials with the pharmaceutical trade industry association the HealthCare Institute of New Jersey issued a statement praising Medicare Part D.

“Medicare Part D is 40 percent below budget and generates 90 percent approval ratings from beneficiaries, by any measure a successful program,” HINJ President and CEO Dean J. Paranicas said in the statement. “While it is important to prevent waste, we must be careful to protect patient access as well as the physician-patient relationship. We will continue working with policymakers and stakeholders to identify solutions that allow patients to continue receiving life-saving medicines.”

Some New Jersey doctors were well below both the state and national averages for writing brand-name prescriptions. Dr. Richard Beck, who closed his Millville internal medicine practice in July, prescribed brand names 16 percent of the time in 2011. He said he has always tried to prescribe generics when possible. He attributed overuse of brand names to the aggressive advertising of pharmaceutical companies, saying that this leads to patients pressuring doctors for brand names.

“Unfortunately, the drug companies have the government and the regulators in their pocket, to be perfectly honest about it,” said Beck, who is 87.

Beck said one reason he may stand out among his colleagues in his prescription practices is the formative experience of the Great Depression.

“The so-called ‘Greatest Generation’ — we were all Depression children and we’re very conscious of what things cost,” Beck said. “We had absolutely nothing and you never forget that, so I don’t like people who take advantage of other people — who are greedy and gouge and deny people’s necessities.”

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