Why You Won’t Be Able to Get the Drug You Need

Unless you can pay for it yourself. This is from Scott Gottlieb’s new book chapter on medical innovation:

Many of the authorities that CMS acquires [under ObamaCare] will flow from the newly created Independent Payment Advisory Board (IPAB), which has the mandate to cut Medicare outlays by $4 billion a year by capping the program’s rate of growth. The goal is to keep Medicare’s spending growth in line with the overall rate of economic inflation…

IPAB is likely to confer on CMS authority to engage in some tacit forms of reference pricing—fixing reimbursement rates on new products to those paid on similar, but older, and more cheaply priced drugs. One way is by giving CMS the authority to pay only for the “least costly alternative” (LCA) medical product within a broad class of competing treatments. Patients choosing a more costly treatment will have to pay the difference themselves.

The entire chapter is worth reading. See our previous post on how this works in Britain.

Comments (10)

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  1. Vicki says:

    This is exactly what has happenewd in Britain. you cannot get the best cancer drugs unless you pay for them yourself.

  2. Devon Herrick says:

    This is how Canada decides what it will pay for new drugs — it’s a function of the price for the old drug it replaces.

    This will create a dilemma for drug companies. Drug makers increasingly can only afford to develop drugs that treat conditions afflicting large numbers of people. This tends to be older people of Medicare age. If the only payer for this segment of the market is using reference pricing, some chemical entities will not be considered worth pursuing.

  3. Joe S. says:

    In other countries it’s called rationing.

  4. Nancy says:

    Joe, in this country, a lot of us also call it rationing.

  5. Erik says:

    This occurs with private insurance plan formulary drugs here too. You pay the difference of non-preferred, non-formulary drugs. Big Pharma is to blame, as they manipulate dosage amounts and package sizes to their advantage costing us all more.

  6. Ella G. says:


  7. Judy Simmons says:

    So, this plan was called “wonderful” and “good for the US” because it would be the best for everybody—obviously not if I can’t get the best medicine for my problem. “You lie” is so true!

  8. femi says:

    Those that can pay for it will always be able to get the drug they need…

  9. Art says:

    There are drugs taken by mouth, but the ones you reference which are usually not these, as 85% of oral drugs are generic, with prices falling while the 15% of branded drugs rise almost 10% here as they fell 5% in Europe. And with these, nobody has any idea where they are made and where the active ingredients come from.

    Effective, new drugs are usually injectables heavily advertised on TV, but as with oral meds they are or could not be any more effective.

    Then there are genetic tests and stem cells that are rapidly progressing and which will be used to determine what if any drugs are most effective for each patient, or cause side effects.

    All in all, we will experience a “Brave New World” while the administration tries and fails to catch up with Europe whose government purposesare to provide care to the entire populace, having discovered after 70 years that socialized medicine places most in a systm that tells them what they have without having the resources of specialized physicians to care for them all. We have the everse, but instead of trying to use them most effectively, we tell them we want them to do more for less. Perhaps our specialists can commute to Europe.

  10. Calvin Richardson says:

    Plans like this should not simply force patients to simply accept the least costly drug for their particular issue. They should force patients to first attempt the least costly drug with the same effectiveness as the most costly drug. They act a type of cost-effectiveness policy. Insurers (public and private) should require patients to try the low cost, same effectiveness drug first and if that fails, then push on to the more costly alternative. I do not believe that any treatment/med should be strictly forbidden but if a low-cost same effectiveness alternative exists, why should it not be tried first?

    in a competitive, rational market the higher cost product would be forced out but that clearly is not the case here. How else would you deal with the issue of two treatments with equal effectiveness but wildly different prices?