Many antibiotics aren’t a prescription you fill at your corner pharmacy, they’re infused medicines generally given in a hospital (for really serious infections). And Medicare (and many private insurers) pay hospitals a fixed fee per hospital stay (fee varies depending on what the condition is).
If say, the hospital received a fee of $20,000 for treating the patient with the serious infection, but then had to pay $50,000 for the new antibiotic that cures the patient, the hospital loses $30,000 on that patient. That is what Mr. Coukell means by a “financial incentive to choose cheaper drugs that are older and less effective.”
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