ALEXANDRIA, VA – Vice President Al Gore promises a Medicare prescription drug benefit that would be “affordable, accessible, meaningful, and competitively administered.” It is an easy promise to make but much harder to keep.
As experience with Medicare demonstrates, centralized efforts to provide access to health care almost always turn government into a medical gate keeper, deciding what kinds of care are eligible for coverage and how much to pay for it. There is no reason to assume it will be any different for prescription drugs.
Bureaucratic intrusion in health systems throughout Europe provides myriad examples of where the road to a government-run health benefit leads.
For decades, European governments, each in their own way, have made prescription drugs part of a national health benefit package. In most countries, the government, not the market, decides the price of prescription drugs and the amount citizens will be reimbursed for them.
The results hardly have been reassuring. In several European countries, new drugs that have already been approved for safety and efficacy take months, even years, to reach the market as health officials argue over price and reimbursement levels. Rather than getting less expensive new drugs, European patients often have no access to them at all.
The full scope of this problem is described in detail in two incisive studies by the London-based Europe Economics research group.
In one study of breakthrough medicines between 1986 and 1996, Europe Economics found patients in many countries suffered long delays in obtaining widely prescribed drugs. The products covered by this study were not merely the costly medicines for rare diseases. It included such popular drugs as Zoloft, Prozac, Norvasc and Zocor.
In Greece, Belgium and Portugal, which appear to be the worst offenders, residents have gone for years unable to gain medications through government programs that can effectively treat cardiovascular problems, respiratory ailments, urinary system infections, and other illnesses. In every case, these are medicines that are widely available in the United States. The patients being denied these state-of-the-art medicines simply have the misfortune of getting sick in a country with misguided health policy.
As a result of drawn-out reimbursement negotiations, European Economics researchers found powerful new anti-infective therapy take four years to get to patients in Greece and Portugal and three years to reach them in Belgium and France. Portuguese patients who needed a major new nervous system medication were denied access for nearly six additional years.
In the 1995-1997 period, more than half of the new medications included in the survey weren’t available in pharmacies in Portugal, Italy and Greece. And more than one-third weren’t available in Belgium, France and the Netherlands pharmacies.
Why is this happening? When faced with tight budgets, European health officials resorted to a deliberate, if callous, policy of using price controls as a way to control their health care budgets.
That is why Greece takes an average of 264 days to price new medicines, with an additional 278 days to award reimbursement levels. It is why Belgium takes an average of 102 days to price new medicines, with an additional 464 days to award the reimbursement level.
Prescription drugs, in other words, have become a tool of budget policy rather than health policy. That seems to be an inevitable result once government gets in the business of healthcare price controls. History suggests that American healthcare policy advocates often ignore such warning signs at their peril.
Indeed, in the United States, the original Medicare plan of 1965 promised to avoid setting any fees schedules or prices on physicians, much in the way Vice President Gore forswears the need for them in his prescription drug plan.
But as the American Enterprise Institute’s John Calfee pointed out in a recent monograph, the free market system for Medicare didn’t last long. An initial effort to limit physician reimbursements to the rate of inflation gradually became a complex schedule of fees.
Today, the reimbursement system for Medicare is monolithic and contentious, with a pricing scheme that controls and limits the health care seniors receive.
Government bureaucrats in Washington manipulate this system to “socially engineer” health services by revising or adding to the 110,000 pages of regulation that govern the program. Similarly, there is every reason to believe that Mr. Gore’s prescription drug proposal would lead quickly to price controls and more ham-fisted government intrusion.
Today’s, seniors – and the millions of Americans about to join their ranks – should be especially wary of policy proposals that almost certainly will deny them swift access to life-saving and life-enhancing medicines.
Grace-Marie Arnett is president of the Galen Institute, a health policy research organization based in Alexandria, VA. Readers may write her at firstname.lastname@example.org, or P.O. Box 19080, Alexandria, VA, 22320.