Affordable Prescriptions for the Elderly
Authors: Thomas S. Bodenheimer
Journal: JAMA (2001)

MANY CLINICIANS HAVE ORDERED A LIPID PANEL for an elderly patient with diabetes and coronary artery disease, only to find that the statin drug prescribed 6 weeks ago has failed to lower the patient’s low-density lipoprotein cholesterol level. “Are you taking your cholesterol pill every day?” the physician is likely to ask. “I hate to tell you, doc, but I just couldn’t afford that pill. I never even bought it.” Recent studies indicate that lack of prescription drug coverage for Medicare beneficiaries is associated with lower use of essential medications and may lead to higher rates of adverseoutcomessuchashospitalizationandnursinghomeplacement. These studies comprise a subset of the medical literature demonstrating that imposing out-of-pocket costs on patients reduces use of medical services, especially for lowincome persons, with worsening of clinical processes or outcomes. In the Rand Health Insurance Experiment, patients contributing to the cost of their care had fewer ambulatory visits, fewer Papanicolaou tests, and higher diastolic blood pressures (for people with hypertension) compared with the freecare group, which had prescription drug coverage. In another survey, 37% of patients with uncontrolled hypertension reported difficulty paying for their medications compared with 16% of those whose blood pressure was controlled; the investigators concluded that pharmacy costs contributed to inadequate hypertension control. In this issue of THE JOURNAL, Federman et al add important findings to this literature, showing that for Medicare beneficiaries with coronary heart disease, only 4% of those without drug coverage—compared with 27% with adequate coverage—used high-priced statin drugs to lower cholesterol in 1997. The association was less marked for lowercost -blockers and nitrates, suggesting that the price of a drug was related to its use in this population. The implication is that elderly patients with coronary heart disease who lack coverage for high-cost medications are at greater risk for myocardial infarction and death. This article appears at a critical time for national health care policy. Serious concerns and anger about drug costs are pervasive among elderly patients. Whereas 73% of the 41 million Medicare beneficiaries have some drug coverage, only 39% have reliable coverage, since Medicare managed care and Medigap drug plans have deteriorated in the past few years. Among Medicare beneficiaries, 27% will spend more than $1000 out-of-pocket for medications in 2001. The average cost per prescription for an elderly person increased from $28 in 1992 to $42 in 2000 and is expected to reach $73 by 2010. However, the currently elected representatives may have painted themselves intoacorneron theMedicareprescription drug issue. The budget agreement stemming from the recent $1.35 trillion tax cut stipulates that only $300 billion can be spent for Medicare prescription drugs over the next 10 years. Yet, the Congressional Budget Office projects drug expenditures forelderlypatients at$1.3 trillion in thecomingdecade. Prescription drug coverage will pay for only 23% of Medicare drug costs unless beneficiaries are charged substantial premiums to increase thepoolof available funds.AsofAugust2001, someRepublicanandDemocraticdrugcoverageproposalscontained a $636 yearly premium that would double by 2011. These are devastatingly high sums for elderly persons, whose median income in 1999 was only $14425. Even with high premiums, these congressional proposals will still require large co-payments. Unless the budget agreement is modified, the $300 billion 10-year limit has sabotaged the chances of a Medicare drug benefit that makes prescriptions affordable to allelderlypersons.TheonlyhopeforreasonableMedicaredrug coverage is a reduction in the cost of medications. From 1998 to 1999, national expenditures for prescription drugs increased 16.9% compared with a 5.6% growth in all other health expenditures. From 1999 to 2000, drug expenditures increased another 18.8%. Three factors have played major roles in the increase in pharmaceutical expenditures from 1993 to 1998: 18% of the increase resulted from higher prices for drugs; 43% from the increasing number of prescriptions written; and 39% from newer, higher-priced drugs replacing older, less-expensive drugs. Price Increases. The pharmaceutical industry claims that high drug prices are needed to finance research and development of new products, each of which costs an average of $500 million to develop. While this argument has some merit, it does not tell the entire story. For years, pharmaceutical manufacturing has been the most profitable of all industries, earning a 1999 median net profit after taxes equal to 19% of revenues, compared with 5% for all Fortune 500 firms. In 1998, the 10 largest drug companies spent only 11.1% of their sales