NCPA - National Center for Policy Analysis

Unintended Consequences Of Medicare Law

January 10, 2000

Under the law, Medicare is generally barred from covering prescription drugs that patients administer themselves. In the case of medications used by kidney dialysis patients, that prohibition is costing taxpayers an extra $110 million a year, according to a study by the Democratic staff of the House Committee on Government Reform.

  • Many people on kidney dialysis are prescribed one of two drugs used to boost the body's calcium levels -- which are driven to dangerously low levels because of the procedure.
  • The treatment is either a drug called Calcijex made by Abbott Laboratories which must be delivered through an injection, or an oral version called Rocaltrol produced by Hoffmann-La Roche.
  • So Medicare doesn't pay for Rocaltrol, but does cover injections of Calcijex.
  • An estimated 89,000 kidney dialysis patients use Calcijex at a cost of $2,065 a year per patient -- and about 23,000 use Rocaltrol, which costs $438 a year per patient.

Patients favor Calcijex because they will be reimbursed. But if all the patients on Calcijex switched to Rocaltrol, Medicare would save $110 million, according to the report.

Critics point to this situation as an example of how one-size-fits-all laws and regulations push up medical costs.

Source: Laurie McGinley, "Medicare Could Save Over $100 Million if it Covered Drug for Dialysis Patients," Wall Street Journal, January 10, 2000.

 

Browse more articles on Health Issues