On the same day the Legislature’s Health and Human Services Committee unanimously approved a 25 percent price cut for prescription drugs for Maine’s uninsured, the National Institute for Health Care released a study showing drug costs rose 19 percent last year and 40 percent since 1998. The timing was coincidental, but the events raise a range of questions, from how much marketing plays a role in increasing pharmaceutical costs to why the federal government, for yet another year, has failed to propose anything like a comprehensive health plan.
The decision by the Maine legislative committee is welcome. Cutting, even temporarily, the rapid rate of health care costs to the uninsured should help Mainers afford needed drugs and afford to take complete prescriptions rather than spreading it out to make pills last longer. The price cut comes through a federal waiver in the Medicaid program that lets states offer residents up to 300 percent of poverty the negotiated Medi-caid price of a drug instead of the retail price. The difference in cost is to be absorbed by the pharmaceutical industry.
The NIH study breaks down the higher cost into three large areas: 42 percent of it came from an increase in prescriptions, a shift toward more expensive drugs accounted for 36 percent and higher prices made up 22 percent of the total. The effect of marketing on all three areas deserves greater examination. The pharmaceutical industry employs some 7,000 sales people and spends $7 billion a year on marketing – including free trips and honoraria for doctors, plenty of ads urging patients to tell their doctors to prescribe the most expensive of the new drugs. Assuming that investment is effective, and it is hard to imagine an industry as successful as pharmaceuticals spending $7 billion a year on something that doesn’t work, the NIH should follow up on earlier studies that have at-tempted to get a sense of how much marketing raises drug prices.
The Health and Human Services Committee last month voted against a bill that would have required drug companies to break down their expenses for gifts, promotions to doctors and marketing, including television and printed material in addition to requiring them to disclose wholesale prices. The lawmakers saw needless complications with the bill, which is understandable – the question of prices and reform still would be better handled at the national level.
Why Congress has failed repeatedly to respond to this pressing need and instead chosen the path of incremental improvement might be traced back to the failed attempt at health care reform by the Clinton administration in 1993. But that failure does not excuse timidity now. Perhaps while Maine lawmakers watch the drug discount provided to the uninsured get lost in price increases it could draft a resolve for other states to join that demands federal health care reform. Either that, or a demand that members of Congress start paying for their own drugs.
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