What if doctors could not only prescribe drugs to their patients but also dispense them–no writing a prescription and sending it off the pharmacy? Not only would it be more convenient, it could be cheaper—a lot cheaper.

That's the premise of a proposal put before the Senate health committee this week. Dr. Josh Umbehr, cofounder of Kansas-based Atlas MD, one such company providing generics directly to patients says it's much cheaper than alternatives. In fact, Umbehr tells Modern Healthcare, “I'm cheaper than 340B.”

Umbehr related to the committee and chair Lamar Alexander, R-TN, that his practice, which he terms a “blue-collar concierge” direct primary care model that takes monthly membership fees from patients instead of accepting Medicare, Medicaid and private insurance, has a cabinet stocking about $50,000 in medications. The markup on those 200 different medications? About 10 percent. And since he gets extremely low prices on generics, his patients save money.

Umbehr did say that his practice doesn't stock or sell high-cost drugs such as insulin for which there's no generic competition.

Hearing that such a direct purchase setup is legal in 44 states, Alexander asked, “Why won't they do it?”

According to Umbehr, doctors, for the most part, don't know they can do it, or are reliant on the process with insurance and don't separate generic drugs out from other goods and services.

Alexander told Modern Healthcare after the hearing, “We're looking for ways to lower health care costs, and 17 percent of healthcare costs are prescription drugs. The manufacturers say their list prices haven't gone up much the last two or three years. But prices to the consumer have.”

There hasn't been much discussion about drug wholesalers—most attention has been focused on rebates for pharmacy benefit managers and insurers and on manufacturers. But when it comes to wholesalers, there are two business types—full-line, which typically stocks the complete line of a drugmaker's medications and sells them to pharmacies, hospitals and physicians' offices, and specialty distributors, which concentrate on specialty medicines for physician-owned and -operated clinics, hospitals and hospital-owned outpatient sites.

Umbehr pointed out in the hearing that people should save their insurance for expensive care, while finding ways to save on low-cost treatments and drugs.

Instant Insights /

Physician-dispensed generics proposal pitched to Senate panel

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