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.
Much attention has focused on brand name drugs, although recent reports show that intermediaries can capture significant profits in the generic market as well. With 88% of Medicare Part D prescriptions dispensed for generic medications in 2018, 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.