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Comment by mistercow | Hacker News Reader

>they are reimbursed for the average price of the drug plus 6 percent.

I do not understand why anyone thought this was a good idea, or even one that made sense. What was the purpose here?

If they were only reimbursed for exactly the cost of the drug, they'd lose money on expensive drugs because of inventory costs. Inventory costs include interest on money for the time they're holding it, damage and spoilage, security, theft, insurance, etc.

6% is probably a reasonable guess at the average costs. Large, high-volume operations can make a profit by keeping their costs below 6%, and that may create a wrong incentive. But the right answer isn't to change 6% to 0%, because nobody will want to handle expensive drugs.

For the most part prescribing doctors aren't the ones who have to deal with inventory costs, it's pharmacies that have the inventory costs. I've even had doctors send me to the pharmacy to pick up injectable medication, primarily because they didn't want to deal with an inventory. So why should prescribing doctors get 6% of cost?

Prescribing doctors don't get 6% of the cost unless they're also supplying it. Lucentis is injected with a needle into your eyeball, so you probably want your ophthalmologist to do it in their office.

My doctor injects medication into me every few months. I go to the pharmacy to pick it up first, and then go to the doctor to get it injected.

It's actually 4% now that sequestration is in effect.

They get a 6% margin to account for all the other overhead associated with stocking the product. Someone has to order the drug, receive the drug, stock the drug, retrieve the drug and ready the drug for administration.

If they don't get that 6%, they lose money each time they administer the drug.

I don't see an interpretation of what was said in the article where reimbursement of the cost goes to a pharmacy and 6% goes to the doctor, though admittedly I skimmed.

It was probably a suggestion by a pharmaceutical industry lobbyist.

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