NCPA - National Center for Policy Analysis

Veterans' Pharmacy Benefit Program Restricts Access To New Drug Therapies

October 4, 2000

If prescription drug benefits are added to Medicare, the program will eventually restrict seniors' access to the most effective new drugs, concludes a new study from the Hispanic Business Research Center.

Both the U.S. Department of Veterans Affairs and the government-controlled health-care system of Canada limit access.

  • Under the federal government's Veterans Affairs (VA) pharmacy benefit program, only 12 of the 31 drugs most commonly used by elderly and disabled Medicare recipients are available.
  • For instance, VA patients with pancreatic cancer are not allowed to receive Gemzar, the newest drug for that disease, as a matter of course -- they must "fail" on other drugs first, according to Robert Goldberg.
  • In Canada, the health care system is both slow to approve new drugs and reluctant to allow their use.
  • In addition, Canada's Patented Medicines Price Review Board generally does not allow new drugs to be sold for more than the price of older, similar drug treatments, even if the new drug is more effective.

The result is that many drugs commonly used in the U.S. are unavailable in Canada. More affluent Canadians cross the border to purchase needed health-care treatments and prescription drugs, but low-income Canadians are limited to the government system.

  • For example, according to physician William McArthur, writing for the National Center for Policy Analysis, a 64-year-old patient who had peptic ulcers for more than five years was required to switch to an older, less effective drug.
  • Within three days, he required hospitalization and a lifesaving blood transfusion.
  • After 10 days' hospitalization and several more transfusions, he was discharged and placed on the same drug he had originally taken.

Similar cost control measures could be used in the Medicare program.

Source: Naomi Lopez Bauman (Pacific Research Institute), "What Americans Should Know Before Letting Government Control Medicare's Medicine Cabinet," October 2, 2000, Hispanic Business Research Center, 3213 Duke Street, Suite 242, Alexandria, Va. 22314, (703) 837-1944.


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