HEALTH - DECEMBER 3, 2003

New Medicare Rx program: A benefit all right – but for whom?

Since last week was Thanksgiving, we should still have a bit of thankfulness left over for Congress, which has been working very hard for a number of months now to bring our elderly citizens a Medicare prescription drug benefit. Look what our elected representatives managed to put together in one bill:

– Sticking taxpayers with a $400 billion price tag over 10 years.

– Making the pharmaceutical and health insurance industries ecstatic over projected new profits.

– Oh, yes, remember prescription drugs? According to Gail Shearer of Consumers Union, once the new plan kicks in fully in 2007, most seniors will be paying more for prescription drugs than they do today.

Let’s assess what Congress has done, by comparing this bill to a serious attempt to attack the problems with American health care.

First question: If we lived in the ideal world, what should one do to fix the prescription drug problem while at the same time addressing all the rest of what’s broken in the system? The obvious answer is some variety of a single-payer system of universal access for all Americans. The take-home message is that one of the major factors driving up the cost of health care is the incredible bureaucracy of having so many different folks all paying for health care. It’s unlikely the shift to a single-payer system would all by itself save enough money to pay for care for all those now uninsured, plus fund a generous new drug benefit for the elderly. But it would both save a bundle of money in the short run and put us in a much better position to control costs in the long run.

But the political wisdom is that a single-payer program will never get out of the starting gate, and even the family-doctor, tough-talking darling of the liberals, Howard Dean, has shied away from recommending this approach. So, next question. Let’s play the so-called realism game and ask what we could do instead - -if we’re willing to let the rest of the system keep sinking into the swamp, and all we wanted to do was to have an affordable and comprehensive prescription drug benefit for Medicare.

Here it would seem not to require rocket science to figure out the answer. Who has a pretty good drug benefit and manages to pay absolute bottom dollar for it? Turns out to be the Veterans Administration. And how does the VA pull off this trick? Simple. It buys all its drugs as one huge bulk purchase. No company can afford to let that big chunk of business go by the wayside. So the VA can bargain the price of its drugs down lower than just about anyone else in the United States.

The obvious answer for Medicare is to do the same thing, only on a bigger scale. Use Medicare’s purchasing power as a single program covering nearly all the elderly to bring down the exorbitant costs of drugs. Bingo – no more busloads of seniors heading to Canada to buy the supposedly “unsafe” drugs up there.

So what did the rocket scientists on the Republican side of the House and Senate do with the prescription drug bill? Just what you’d expect them to when the industry spending the most money to lobby Congress this year was Big Pharma. They wrote specific language into the bill prohibiting Medicare from using concentrated buying power to negotiate drug prices.

That’s why seniors are likely to pay more for drugs in the future. And that’s why the $400 billion to be shelled out by taxpayers becomes yet another subsidy for the most profitable industry on Earth. And that’s why the big drug companies are laughing all the way to the bank.

The Republicans in Congress were right in calling this a drug “benefit.” Problem was they neglected to tell us exactly for whom.

Howard Brody, MD, teaches family practice and medical ethics at Michigan State University. You can reach him at brody@msu.edu.

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