Pharmacist holding prescriptionDoctors, for the most part, aren't aware they can bypass insurersto access drugs or are reliant on the process withinsurance and don't separate generic drugs out from other goods andservices. (Photo: Shutterstock)

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What if doctors could not only prescribe drugs to theirpatients but also dispense them–no writing a prescription andsending it off the pharmacy? Not only would it be moreconvenient, it could be cheaper—a lot cheaper.

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

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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 monthlymembership 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 differentmedications? About 10 percent. And since he gets extremely lowprices on generics, his patients save money.

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Umbehr did say that his practice doesn't stock or sell high-costdrugs such as insulin for which there's no genericcompetition.

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

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

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

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There hasn't been much discussion about drug wholesalers—mostattention has been focused on rebates for pharmacy benefit managers andinsurers and on manufacturers. But when it comes to wholesalers,there are two business types—full-line, which typically stocks thecomplete line of a drugmaker's medications and sells them topharmacies, hospitals and physicians' offices, and specialtydistributors, which concentrate on specialty medicines forphysician-owned and -operated clinics, hospitals and hospital-ownedoutpatient sites.

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

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Marlene Satter

Marlene Y. Satter has worked in and written about the financial industry for decades.