Monday, November 22, 2004
The drug price delusion
[Robert Pear and James Dao, "States devise own remedies for drug costs," The Wichita Eagle, 21 November 2004.]
According to this article reprinted from The New York Times, public officials in states around the country are trying to solve their escalating health care costs by focusing on drug spending:
Alarmed at soaring pharmaceutical costs, states are trying a range of tactics to curb spending on prescription drugs for Medicaid recipients, public employees, prisoners and other residents, bringing them into lobbying combat with the drug industry in capitals across the nation.
A dozen states have joined purchasing pools to use market power to reduce costs. Dozens more are requiring Medicaid recipients to use generic drugs or lower-priced products from preferred lists.
And in one of the more innovative programs, Oregon and 11 other states have joined in an effort to compare the safety and effectiveness of hundreds of drugs. Medicaid officials steer doctors and patients away from costly drugs found to have no proven clinical advantage.
Worries have risen so high in West Virginia that the governor called a special session of the Legislature on Tuesday to consider legislation authorizing a single state coordinator to negotiate discounts on drugs purchased for the state's insurance and health care programs. The measure passed unanimously.
The problem with this approach is that it addresses a symptom of a larger problem, and therefore will create a host of unintended consequences, none of which are likely to be positive. In addition, it places public officials in positions far outside of reasonable responsibility - determining, for instance, the appropriate medical regimen for patients. This kind of decision should be left between doctor and patient, and there is no reason for shifting the choice to a public agency other than cost.
Cost, though, is really where the argument for such draconian measures falls apart. Research has shown that drug costs are not nearly as significant a factor in health care as some claim, and that the rise in drug costs is largely due to a rise in drug use - not a rise in price. This increased use can pay off in reduced expenditures elsewhere in the system, a point often lost in the discussion of health care costs.
Regardless of the role prescription drugs play in rising health care costs, clamping down on their pricing and use through artificial government means fails to address the underlying overutilization taking place throughout the health care system. If public officials are serious about curbing this long-term problem, then their focus would be much better placed on introducing consumer-driven options.
[Robert Pear and James Dao, "States devise own remedies for drug costs," The Wichita Eagle, 21 November 2004.]
According to this article reprinted from The New York Times, public officials in states around the country are trying to solve their escalating health care costs by focusing on drug spending:
Alarmed at soaring pharmaceutical costs, states are trying a range of tactics to curb spending on prescription drugs for Medicaid recipients, public employees, prisoners and other residents, bringing them into lobbying combat with the drug industry in capitals across the nation.
A dozen states have joined purchasing pools to use market power to reduce costs. Dozens more are requiring Medicaid recipients to use generic drugs or lower-priced products from preferred lists.
And in one of the more innovative programs, Oregon and 11 other states have joined in an effort to compare the safety and effectiveness of hundreds of drugs. Medicaid officials steer doctors and patients away from costly drugs found to have no proven clinical advantage.
Worries have risen so high in West Virginia that the governor called a special session of the Legislature on Tuesday to consider legislation authorizing a single state coordinator to negotiate discounts on drugs purchased for the state's insurance and health care programs. The measure passed unanimously.
The problem with this approach is that it addresses a symptom of a larger problem, and therefore will create a host of unintended consequences, none of which are likely to be positive. In addition, it places public officials in positions far outside of reasonable responsibility - determining, for instance, the appropriate medical regimen for patients. This kind of decision should be left between doctor and patient, and there is no reason for shifting the choice to a public agency other than cost.
Cost, though, is really where the argument for such draconian measures falls apart. Research has shown that drug costs are not nearly as significant a factor in health care as some claim, and that the rise in drug costs is largely due to a rise in drug use - not a rise in price. This increased use can pay off in reduced expenditures elsewhere in the system, a point often lost in the discussion of health care costs.
Regardless of the role prescription drugs play in rising health care costs, clamping down on their pricing and use through artificial government means fails to address the underlying overutilization taking place throughout the health care system. If public officials are serious about curbing this long-term problem, then their focus would be much better placed on introducing consumer-driven options.
Comments:
Post a Comment
