The Patriot Post® · Targeting Doctors to Lower Drug Costs
Medication, like every other aspect of America’s health care industry, is a metastasizing mass of government rules, large companies and some feeble attempts at the free market. Recently, the Centers for Medicare and Medicaid Services introduced a rule that tries to reduce the number of times doctors prescribe medication with high cost. Currently, the cost of medication through Medicare Plan B runs the government about $19 billion a year. Currently, when doctors prescribe medication, they receive a payout of 6% of the cost of the drug. Drug costs $100? Doctor gets paid $6. Some point out that this “commission,” if you will, encourages doctors to scribble out prescriptions for more expensive drugs.
Dr. Allen Litcher, CEO of the American Society of Clinical Oncology told the WSJ that the government is laying the blame for high drug costs on the wrong people. “It is inappropriate for CMS to manipulate choice of treatment for cancer patients using heavy-handed reimbursement techniques,” he said. “Physicians did not create the problem of drug pricing and its solution should not be on their backs.”
The new rule is more complicated — not an encouraging first sign for reform — and it would first drop the premium to 2.5% of the price of the drug and go to a fee-based system. The goal is to remove the incentive from doctors to prescribe more expensive drugs for better cash and instead put the focus on what drugs work, preferably less expensive drugs.
But the larger problem remains: Just how did the nation’s medication get so expensive? Last year, WSJ examined the factors, comparing the cost of name-brand drugs across several countries against the cost the U.S. government pays for them. Most of the time, American patients pay more than someone in, say, Norway or England. Some of the costs passed on to the consumer are because drug companies can advertise to consumers in the United States, unlike a more socialist nation where they are banned from doing so. In other instances, drug entrepreneurs like Martin Shkreli realize they can make a killing by jacking up prices. When he was called before Congress in February, he smirked, almost laughed at the lawmakers during the hearings and all the while remained silent before their questioning. Later Shkreli tweeted, “Hard to accept that these imbeciles represent the people in our government.”
But perhaps the biggest factor for the price disparity is that Norway, England and other “enlightened” socialist countries place price controls on drugs. This means that if drug companies want money to spend on research and development, they have to pull it from the pockets of consumers. It’s something America could do too, but at the cost of more regulation and less ability to develop life-saving drugs. Yet there the market forces remain. Patients can still insist on more inexpensive medication.