Cash Pay Generic Drugs Are a Functioning Market in Healthcare. Policymakers Beware and Be Careful.

Cash-Pay Generic Drugs Are a Functioning Market in Healthcare, and Policymakers Could Break It. Beware of PBM Spread Pricing. Episode 520. Cash-pay generic drugs are one of the few corners of US healthcare where a real, functioning market already exists — which is why Stacey Richter argues policymakers need to tread carefully when trying to "fix" drug affordability. In this solo episode, Stacey explains why cash generic prices can run as low as $1 a prescription, then plays clips from four past guests — Ge Bai, PhD, CPA; Bryce Platt, PharmD; Benjamin Jolley, PharmD; and Luke Slindee, PharmD — showing how inserting a PBM extracts $41 out of every $100 spent, leaving patients paying more for the "privilege" of using their insurance. WHAT YOU'LL LEARN ✅ Why cash-pay generic drugs are one of the few genuinely functioning markets left in US healthcare, with multisource manufacturer competition keeping prices as low as $1 to $18 per prescription ✅ Why using insurance/PBM coverage makes the 20 most prescribed generics more expensive 43% of the time overall, and up to 79% of the time in the deductible phase, per Ge Bai, PhD, CPA's research in Annals of Internal Medicine ✅ How PBMs extract $41 out of every $100 spent on generic drugs that cost roughly 47 cents to manufacture, largely through the administrative overhead of risk pooling ✅ How Most Favored Nation "lesser of" clauses in PBM-pharmacy contracts punish pharmacies for lowering their cash prices, and why Luke Slindee, PharmD, argues removing that single clause could unlock a more robust cash-pay market without pulling generics from insurance entirely ✅ Why generic drug adoption has slowed from about one month to six months to reach peak uptake, which Bryce Platt, PharmD, ties to PBM formulary control rather than reduced competition or prescriber resistance ✅ Four policy ideas Stacey floats for keeping generics affordable without wrecking the underlying market: eliminating MFN clauses, funded wallets or prepaid cards, pre-funded cash-pay pharmacy relationships, and removing generics from PBM adjudication entirely WHY THIS MATTERS Generic drugs are one of the only truly functioning markets left in US healthcare, and cash prices are already low because of it. But policymakers trying to make medications more affordable often reach for the same lever — routing everything through insurance/PBM adjudication — which the data shows frequently raises what patients pay while handing PBMs a 41-cent cut of every dollar spent. As Stacey puts it, "you have to be really careful what levers you push because you can't see what they're attached to," and the wrong fix could break the one part of healthcare that's actually working. === LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP520 ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/joi... 🫙 Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/joi... 🎤 Follow us on Apple Podcasts https://podcasts.apple.com/us/podcast... 🎤 Follow us on Spotify https://open.spotify.com/show/6UjgzI7... 📺 Subscribe to our YouTube channel    / @relentlesshealthvalue   === CONNECT WITH THE RHV TEAM === ✭ LinkedIn   / relentless-health-value   ✭ Threads https://www.threads.net/@relentlesshe... ✭ Bluesky https://bsky.app/profile/relentleshea... ✭ X   / relentleshealth   00:00 Introduction to this episode. 01:30 EP444 with Ann Kempski. 02:43 LinkedIn post by Bryce Platt, PharmD, on drug pricing structure consequences 03:48 Intermediaries versus functioning markets. 05:30 The use case for today's episode. 07:18 EP495 with Mick Connors, MD. 10:56 The reason why cash-pay generics are cheap right now. 11:03 EP420 with Ge Bai, PhD, CPA. 11:42 The value proposition of PBMs versus cheap generics. 14:13 EP422 with Benjamin Jolley, PharmD. 16:09 What risk pooling is and how it plays into all of this. 17:47 EP517 with Stacey. 17:55 LinkedIn post by Bryce Platt, PharmD, on PBMs' slow generics adoption 20:35 EP439 with Luke Slindee, PharmD. 23:58 LinkedIn post by Patrick Moore: 26:16 Solutions to keeping generics affordable. 27:58 EP465 with Chris Crawford.