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Medicare Part D presents another problem

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AARP Is Looking to Hoard Even More Taxpayer Money

Medicare Part D presents another problem

Last month marked the start of the open-enrollment period for the new Medicare prescription drug benefit, heralding an immense policy victory for AARP and an enormous burden for taxpayers. In throwing the weight of its 36 million members behind the new entitlement, the senior citizen group secured an additional $724 billion in government spending over the next 10 years for AARP’s core constituency (not to mention an additional source of income for AARP — the organization is offering seniors its own “MedicareRX Plan” through a wholly-owned subsidiary).

With this triumph under AARP’s belt, where will this seniors’ lobby next focus its multi-million-dollar budget? Given the very real impact prescription drugs have on the health and financial well-being of this country’s seniors, it is not surprising that AARP is poised to turn its attention from prescription prices to the effectiveness of those very same drugs. And just like the ill-advised prescription drug benefit scheme, taxpayers are at risk.

One clue to this impending campaign is on the AARP.org website, which presents visitors with numerous opportunities to read more about “evidence-based research” for prescription drugs. In the AARP’s own words, this entails “objective research that scrutinizes all clinical studies done by universities, drug companies and others on sets of drugs used to treat the same medical condition. Each review lays out the best evidence on how effective and safe each drug is.” Essentially, evidence-based research creates a consumer ranking on the “best” drugs available for treating certain classes of medical conditions.

AARP points to an Oregon program as a model for government-funded evidence-based research. The Drug Effectiveness Review Project (DERP), an adjunct of the Center for Evidence-based Policy at the Oregon Health and Science University, is funded by a consortium of partners (including 14 state governments) and analyzes classes of drugs for effectiveness. These findings can then be used by state agencies to help determine what drugs make preferred lists for programs like Medicaid. Used properly, evidence-based research can encourage doctors and patients to choose effective, but less expensive, drugs. Taxpayers can also be winners as prescription drug spending goes down.

The catch here is pricing. Many evidence-based research programs for prescription drugs, like DERP, do not take into account the price of the drugs they analyze.  As Mark Gibson, Deputy Director of Oregon’s Evidence-based Policy Center, disclosed, “Our research doesn’t mention cost. Nowhere, no way. We just provide the evidence.”  And that can be a potential problem for states looking to use evidence-based research as the sole criterion for adding drugs to preferred lists for government-sponsored entitlements.

The state of Washington, for example, makes decisions on what drugs Medicaid should pay for primarily on the information provided by the Oregon project. The most expensive drug is still covered “if it has the best side-effects profile and is the most effective,” admits the head of pharmacy policy for Washington’s Medicaid program. The committee recommending what drugs should make the preferred list does not know the cost of any particular drug, although the state Medicaid agency can opt to provide enrollees with the lowest-priced of the committee-recommended drugs.

Processes that utilize price-blind reviews in the first round of developing preferred drug lists are not likely to cause widespread problems, because certain prescriptions that vary in cost have proven equally effective (such as long-acting beta blockers for high blood pressure). Using evidence-based research to choose the cheapest of these drugs could save taxpayers millions of dollars.

Yet, imagine a more complex situation, involving two drugs aimed at treating the same condition being compared in an evidence-based research study. Drug A was found to be somewhat more effective and had fewer side effects than Drug B, but Drug A was ten times more expensive than Drug B. By their own standards, Washington’s officials would put Drug A on the preferred drug list in lieu of the cheaper Drug B. So what started as a well-intentioned cost-saving technique has the potential to go horribly awry if non-medical factors, such as price, are completely thrown out the window.

Nor will simply adding price into the equation necessarily solve things. Self-styled “advocates” for the poor and elderly (like AARP) are likely to raise a ruckus about “injustice” and “inequality” if certain patients covered by government entitlements are steered toward less expensive (and only slightly less effective) drugs.  One can already hear the righteous proclamation: “We NEED this drug and YOU’RE going to pay for it.”

We all might wish for a world with unlimited resources, but the fact of the matter is that consumers and governments need to consider a variety of factors in their medication purchasing decisions.  My 80-year-old grandmother would be better served by choosing a less expensive, but decent, drug and not going bankrupt (or bankrupting the state and leaving her grandchildren to pay the bill) than by demanding the “best” prescription and in turn seeing her savings and the state budget shrivel.

AARP argues that “since the regulations that govern the approval of new drugs and their use do not require comparing one drug with another, evidence-based research needs to be funded separately … at an increased level.” While the federal government’s Agency for Healthcare Research and Quality already funds evidence-based research centers across the country, AARP’s cleverly-concealed jab here is aimed at the fact that the Food and Drug Administration only requires that a new drug be proven safe and more effective than a placebo in order to receive permission to offer the drug to the public. However, twisting evidence-based research from a tool to compare drugs after they’re brought to market, into a regulatory test before they even hit pharmacy shelves, will only raise costs and slow delivery to patients in need — often the very seniors AARP claims to represent.

No one would deny that access to quality information can help individuals make better choices with their doctors about what prescriptions to fill. But demanding that the government pay for the most effective drug, regardless of cost, on top of a new medicine evaluation service, won’t cure what ails the entire nation: a skyrocketing deficit and out-of-control spending. Evidence-based research is a laudable idea indeed, but not when used to force higher expenses on besieged taxpayers.

The nanny state has been throwing its weight around for some time now, but have we really gotten to the point where we need the federal government to review every single product or service we use? Or could it be that the AARP is looking to hoard even more government money for its members at the expense of future generations? Apparently $724 billion in new spending, courtesy of America’s taxpayers, is just not enough for the nation’s largest special interest group.

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Written By

Ms. Rasmussen is director of Government Affairs for the 362,000-member National Taxpayers Union (www.ntu.org), a nonpartisan citizen group founded in 1969 to work for lower taxes and smaller government at all levels. Write to her at 108 N. Alfred St., Alexandria, VA 22314, or visit www.ntu.org.

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