Medical Tuesday Blog
Medicare’s Total Lack of Economic Understanding
The very idea of Government negotiating or establishing drug price is not only illegal, but reflects a total lack of understanding of the medical marketplace. Price controls have not worked in the past and cannot work in the future. The fiasco of Medicare Part D implemented during the Republican administration of President George W. Bush was unfortunate and a major socialistic endeavor which leads to other government intrusion such as drug price controls which is now in active development.
In the original Medicare, outpatient healthcare required a 20 percent copayment. Pharmacy could have easily been added to outpatient healthcare and would have everted the current problems. With the patient having a 20 percent copayment, each patient could decide when he filled the prescription to change from proprietary to generic. For instance, if he was on a cholesterol reducing drug, such as Lipitor at $240, he would ask the pharmacist if there was a generic equivalent. The pharmacist would be obliged to say, I have atorvastatin for $9. This would have totally control drug prices without any further government intrusions. Patients would have transparent view of all drug prices and the pharmaceutical houses would fall in line.
When aminophylline, digitoxin, phenobarbital, Dilantin and other inexpensive drugs skyrocketed to hundreds of dollars, sales would plummet to affordable levels because patients would not pay the 20% copay (up to $200 copay on some outlandish increases reported) on these cheap medicines that previous cost less than $20. When sales drop to zero percent, the pharmaceutical companies would be dropping prices precipitously since no sales is anathema to any business. The solution would occur within days or even hours with the 20 percent copayment of the original Medicare programs.