In the 24 months between June 1999 and May 2001, estimates of the public costs of a far-from-comprehensive Medicare prescription drug benefit have soared from $118 billion over 10 years to $300 billion. Because U.S. prescription drug spending per person is already highest in the world, it is surprising that a Medicare drug benefit should be so expensive.
We have separately estimated the actual incremental costs of prescription drug coverage for Medicare beneficiaries, and for all Americans. These include manufacturing, distributing, and dispensing costs. They are the added costs that must be covered to keep drug manufacturers and pharmacists financially whole when they produce and dispense the additional prescriptions that Americans need.
The total incremental cost for all citizens is only a fraction of most estimates for Medicare-only plans. That is because, unlike most estimates, we exclude increases in drug makers’ profits, marketing costs, and the like. All these are at least adequate already. (Profits would not be reduced, though.) By contrast, both Bush and Gore Medicare drug plans would have bestowed very substantial windfall profits on drug makers.
We describe arrangements for raising money to finance drug coverage, paying for medications, spurring breakthrough research, cutting wasteful marketing costs, and providing more accurate and useful information to physicians and patients. These steps would make it much easier to win low-cost coverage of all Americans’ prescription needs without harming drug makers’ profits or research.
See dcc2.bumc.bu.edu/hs/ushealthreform.htmLearning Objectives: 1. Identify the incremental costs of financing all needed prescription drugs for all Americans. 2. Identify the possible methods of raising the money and paying drug makers. 3. Assess the strengths and weaknesses of each method of money-raising and payment.
Keywords: Access to Health Care, Drugs
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.