Should government negotiate drug prices?

Apr 20 2007

The following is written by Dr. Gary A. Puckrein, PhD, President and Chief Executive Officer of National Minority Quality Forum, on the topic of drug prices and the emerging majority:

More frequently than we care to admit, when national health policy is being deliberated, its implications for America's emerging majority are ignored. This omission has created a one-size-fits-all system that, by its design, provides care of unequal quality to a diverse community.

According to estimates by the U.S. Bureau of the Census, by 2020 minorities (U.S. citizens who, by descent, are American Indian or Alaska Native, Asian, black or African American, Native Hawaiian or other Pacific Islander, or Hispanic or Latino) will account for 40 percent of the population; by 2050 whites will represent about 50 percent of the country's population-down from 69 percent in 2000. It is thus likely that by the end of this century, whites will be one of a number of distinct minorities.

Given the time that it takes to bring innovation to this system, it is quite possible that as the population tipping point approaches and minorities emerge as the majority in the American workforce, they will depend on a system that has a history of providing them disparate care. The tendency among policy makers to consider health policy as if our society were monolithic is brought into stark relief by the debate over legislation to require government to negotiate drug prices for Medicare beneficiaries.

Virtually lost in this discussion about drug prices is any recognition that the methods used to contain drug prices could undermine the health of the emerging majority. Yet pharmacogenetic research in the past few decades has uncovered significant differences in the metabolism, clinical effectiveness, and side-effect profiles of many clinically important drugs among the minority groups that constitute the emerging majority.

While our knowledge of pharmacogenetics is moving us toward personalized medicine (where drugs are designed for the individual, taking into account such variables as age, environment, gender and genetic background), current scientific limitations cause us to continue to develop and prescribe drugs according to the traditional one-size-fits-all approach: A medication is approved, and we tacitly accept that many patients will benefit from it (though dosage may vary), that others will be unresponsive, and that others will react adversely.

The traditional method includes a major drawback for the emerging majority: Minorities are almost uniformly underrepresented in clinical trials for drug development. The failure to include adequate minority subjects in clinical trials means that while pharmacogenetic research instructs us to anticipate difference, data on drug efficacy, usage, and safety are inadequate to determine the impact of medications on minority patients. The usual practice has been to generalize from the study subjects, who are generally white males, to the rest of the population.

It is in the clinical setting that physicians, through experience, must calibrate what works and what does not for each patient. In pursuit of cost containment, our health-care-financing system, without reflection on the needs of individual patients, intervenes and restricts choice. As a consequence, the health of the emerging majority is being sacrificed to achieve short-term financial benefits. The debate over government negotiation of drug prices for Medicare beneficiaries must be understood in this context.

When Congress created a prescription-drug benefit for Medicare beneficiaries, it decided to prohibit the Medicare program from bargaining with pharmaceutical companies to secure lower drug prices and it placed bargaining in the hands of private prescription-drug plans (PDPs). Under the current system, with PDPs negotiating drug prices, formularies exist. By restricting access to certain medications, these formularies can put minority populations at a disadvantage, but at least beneficiaries have choices. Looking at their own medical needs, they can choose PDPs whose formularies provide them with greater access to medications that work for them. Government negotiations of drug prices would eliminate those choices. We would have one national formulary, and the absence of choices would limit physicians' ability to prescribe appropriate therapy to minority patients. Because of variations in the metabolism of drugs, minority patients would be required to fail on drugs that are listed on the government's formulary before prescribers could request authorization for more effective therapy. Minority patients might even find that they must produce a higher co-payment or even pay the entire cost out of pocket in order to obtain medicines that do not make the preferred-drug list.

Population changes will mean fundamental changes for our health system. Health plans will need to anticipate that their member base will become more diverse, and this diversity could bring with it differences in disease-risk profiles and treatment modalities. Pioneering drug companies will have to determine whether the traditional method of developing medications can be relied upon to answer the requisite safety and efficacy questions when historical minorities become the collective majority. As it moves to manage costs and set standards for quality, government will have to remember its responsibility to the larger American community lest it institute policies that leave us ill prepared for our future.