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This was before the Medicare Drug plan passed, which makes matters worse.
This was in the New York Times in April of last year. It shows the beginning of the end for the Medicare program. It is slow destruction. It is sickening. I do not have the link to article, but it would be archived and pay for access now.
SNIP……”WASHINGTON, April 20 - In a fundamental change, the Bush administration has begun to weigh cost as a factor in deciding whether Medicare should pay for new drugs and medical procedures. Most notably, in recent weeks, federal officials have adopted policies to limit what Medicare pays for prescription drugs. These actions, they said, set a significant precedent, illustrating how Medicare will try to control spending if President Bush and Congress agree on a plan to provide more extensive drug benefits to the elderly and the disabled…..”
¶The federal official in charge of Medicare and Medicaid told doctors last month that they should not prescribe Nexium, a new heartburn drug, saying it was identical to an older drug, Prilosec, which became available in a cheaper generic form in December. The admonition infuriated executives of AstraZeneca, the maker of Nexium and Prilosec, who contend the new drug is superior. (My doctor disagrees, prefers Nexium for some) ¶Medicare refused to pay the full price for a new drug to treat anemia in cancer patients, saying it was "functionally equivalent" to an older drug with a lower price. Amgen, the maker of the new drug, Aranesp, contends that it is more effective than the older drug, Procrit, sold by Johnson & Johnson.
¶In deciding whether Medicare should cover a new test for colon cancer, the government said last month that it would analyze the cost-effectiveness of the procedure in detecting cancer among people with no symptoms. The government has rarely been so explicit about considering cost. (Cost differential is $30 and could save lives)
{{More on that test: “But the new test, which uses more sophisticated laboratory procedures, is also more expensive. The company wants to charge Medicare $34 for each test, compared with Medicare's payment of $4.54 for the current test. On the other hand, Enterix says, its test is much cheaper than a colonoscopy, which can cost $500 or more.”}} Makes no sense at all.
The Bush administration's aversion to regulating prices sometimes collides with its desire to save money for Medicare.
"We fix prices for every physician procedure and hospital visit," said Thomas A. Scully, administrator of the federal Centers for Medicare and Medicaid Services, who sets overall payment policy for the programs. "It would be much better to have private health plans make those decisions, but I try to be the best price-fixer I can be."
A federal advisory committee said last month that Medicare should systematically weigh costs against benefits in deciding whether to pay for new drugs, medical devices and other technology. Medicare coverage decisions have an impact far beyond the federal program because private health insurers often follow the government's lead.
From April to December of last year, Medicare paid hospitals $3.89 for each microgram of Aranesp given to a Medicare patient for treatment of anemia in a hospital outpatient department. But this year the Bush administration cut the payment by 39 percent, to $2.37, after concluding that Aranesp was "almost identical" to Procrit and should be paid at the same rate. (This is not believed to be true.....they are making decisions for doctors. )
"Both products use the same biological mechanism to produce the same clinical result, stimulation of the bone marrow to produce red blood cells," the government said. Medicare spends more than $1 billion a year on the two drugs in hospital outpatient departments and in doctors' offices. Doctors decide which drugs to prescribe, based on information from many sources.
Under the Medicare law, federal officials say, they have broad discretion to set drug payments for outpatients at whatever levels they consider equitable. Moreover, they say, drug companies have no standing to challenge such decisions in court because they are not among the intended beneficiaries of the Medicare law.
Amgen disagrees with those conclusions. It says that Aranesp is less expensive and more potent than Procrit, so patients do not have to visit the hospital as often for treatments. That is a significant advantage for patients who are elderly, disabled or terminally ill, Amgen says.
Moreover, drug companies say, the concept of "functional equivalence" cannot be found anywhere in the Medicare statute. They say coverage decisions should be made by the market - doctors, patients and private health plans - even when the government is paying the bills.
Alan F. Holmer, president of the Pharmaceutical Research and Manufacturers of America, said he was deeply troubled by the new standard of "functional equivalence" because it meant that Medicare might not pay for incremental improvements needed to achieve major advances in drug therapy. "Such a policy will chill innovation," Mr. Holmer said.
Who to believe? A gastroenterologist? Or the administrator who wants to save money?
SNIP…”Mr. Scully is wrong in saying that Nexium and Prilosec are identical," said Dr. Joel E. Richter of the Cleveland Clinic, a former president of the American College of Gastroenterology. "Nexium is superior for some patients, particularly those with more severe forms of disease."
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