Better Access to Medicines Means Healthier Patients and Lower Costs

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  • 06/02/2006

This from ” A new study by researchers at Kaiser Permanente finds that spending caps on prescription drugs don’t save insurers money and may end up harming the health of patients—especially those who are chronically ill. The research, which appears in the New England Journal of Medicine, followed about 200,000 Kaiser Permanente patients in Northern California who had Medicare+Choice (now referred to as Medicare Advantage). The study found that those with limits were more likely to end up hospitalized and often chose not to pay for their medicines themselves. Researchers like Steve Soumerai at Harvard have essentially been saying the same thing for more than a decade now, but with Medicare in the business of paying for drugs, this type of research may have more impact on benefit design.”

So has our colleague and board member Susan Horn of the Inst. for CLinical Outcomes Research who showed way back in 1996 that formulary restrictions were associated with keeping people sicker and driving up health care costs.

On the one hand we have the WSJ editorial page claiming that there are no cost offsets to a drug benefit and on the other we have the leftists claiming that restrictive drug formularies as a tool for extracting price concessions won’t hurt patients. Yet here is another study showing that caps of any kind compromise health and drive up total spending…. And yet opponents of the drug benefit on either side keep serving up the same stupid argument in an increasingly hysterical form. How did Santayana define fanaticism: It consists of redoubling your effort when you have forgotten your aim. Exactly.

The NEJM article link can be found here:

And speaking of hysterical…get a load of Congresswoman Louise Slaughter’s off-base attack on Part D in the same medical journal. Compare it with the essay by Mark McClellan and Peter Bach. It’s not even worth trying to refute all the lies and inaccuracies except to say that any drug benefit that is cutting costs by massive use of generic drugs is not generating brand drug companes $139 billion in gross profits. That number, a fake factoid drawn up by the urban planner who pretends he is an economist — Alan Sager — was immediately discredited by the people who really know their stuff — the Wall Street analysts who would have issue heavy buy recommendations if gross profits would have increase 50 percent in one year….Yet the MSM and then John Kerry and now Slaughter continue to invoke this number… As it turns out of course, what drug companies that are making money are doing so with new products, many of which are not covered by Part D plans….because they are cancer products.

The two dueling articles can be found here:


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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