May 1, 2008
From the Crow's Nest: The sickening costs of medicine
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Hillary Clinton can drink a shot and a beer at a blue-collar bar, Barack Obama fails to wear an American flag lapel pin and has had acquaintances who harbor some disquieting beliefs, and John McCain confesses that economics are not his strong suit and that he’d stay in Iraq for a hundred years.
That much we know about the three people who aspire to be our president. What we’re less sure of is how they would cope with the prices of prescription drugs that drive up health care costs generally and often impose real burdens on people who are most critically ill.
More than just a commentary on the fatuous nature of political campaigns, this gap in information reflects not only the complexity of the issue but the need for a remedy before the health care system, to use Sen. McCain’s word, “implodes.”
The plight of patients was outlined in a recent New York Times article headlined “Co-Payments Go Way Up for Drugs with High Prices.” An AARP Medicare Rx pamphlet details the problem. Co-pays for a 90-day supply of Tier I medications rose this year from $18 to $21, Tier II from $84 to $90 and Tier III from $205 to $226 while the “Specialty Tier” is 33 percent of the actual retail cost of the drug.
Tier I includes most generic drugs, Tier II lists preferred brand-name drugs, Tier III includes non-preferred drugs and the Specialty Tier, as its name implies, lists unique and high-cost medications. Insurers say the tier system was devised to encourage use of the less expensive generic drugs, but, of course, these are seldom available on the upper levels.
Here’s where problems begin to mount. At those rates, the annual $2,510 ceiling is quickly reached in the Medicare prescription drug coverage. After that, co-pay benefits are limited to generic drugs and the patient must meet the full price of other medications until out-of-pocket expenses reach $4,050. Then coverage resumes at a $2.25 co-pay for generics and $5.60 for brand names. In the meantime, retail prices of the drugs continue to soar, as does the monthly cost of the insurance.
Obviously, there is no need to belabor the point. People with serious illnesses reach those limits early in the year and the pricing system sometimes puts badly need life-saving medication beyond their reach.
It’s obvious, too, that the entire health care system is ailing. Remedies advanced by the presidential candidates range from universal and compulsory insurance to plans for tax credits to help people meet rising costs of premiums. Details remain scarce. Wholesale reform that is viable and acceptable may be elusive, but a cure for part of it — the rampant escalation in the costs of medicine — should be a manageable target.
First the federal government needs to fix the Bush Administration’s flawed Medicare prescription bill. When it was enacted a few years ago, the cost to the taxpayers was estimated at $300 million, but it is now in the range of a third of a trillion dollars. And it’s not getting the job done.
For one thing, the legislation incredibly forbids Medicaid from negotiating drug prices with the pharmaceutical companies. That’s impossible to explain other than to attribute it to a massive lobbying effort by those companies. Indeed, Sen. Obama says the industry spent more than a billion dollars lobbying Congress over the past decade.
He and Sen. Clinton appear to be adamant about making price negotiations an indispensable first step in getting a handle on costs of medicines. Sen. McCain’s “Straight Talk Express” seems to have left this one back at the depot. But he does call for legislation requiring drug companies to reveal their costs and prices. He suggests also that higher-income Medicare beneficiaries should pay higher premiums for prescription drug coverage. It’s doubtful, though, that such a requirement would have much impact.
All three candidates agree that it is essential to legalize “re-importation” of prescription drugs from Canada, where they are 16 to 60 percent cheaper. Much of the research and development of these medications had been done in the United States (with some federal support, by the way) before the manufacture and marketing went elsewhere.
To make medicines more readily affordable to those who need them, the Congress should authorize “re-importation,” instruct Medicare to negotiate prices with the pharmaceutical industry and devise incentives that would encourage drug companies to develop more generic alternatives.
Perhaps what is most necessary, as suggested by Jennifer Reck of Prescription Policy Choices, a national nonprofit group, is a realization that “the notion of insurance as a for-profit venture has almost completely eroded the notion of insurance as a social good in this country.” There ought to be ample accommodation for both notions.
© Copyright 2008 by Hersam Acorn Newspapers
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