Politics & Policy

Bad Medicine

California's latest drug deal hurts minority health.

The use of drug therapy to treat mental illness–a large proportion of the state’s drug budget — provides a case in point regarding the dangers of limiting access to a variety of prescription drugs. Selective serotonin reuptake inhibitors (SSRIs) are used to treat depression and a variety of affect disorders. There are more than a dozen existing SSRIs. Yet, under California’s proposed price-control plan, Medicaid patients suffering from depression and related disorders are already limited to the cheapest drugs. If new ones came on the market that were demonstrably more effective, they would not be available unless they were discounted to a huge swath of the state’s population. The same would go for any type of new drug that came to market. As Loretta Jones of the Los Angeles-based Healthy African American Families notes, the gap between cutting-edge care and the needs of the poor would grow wider each year. Belshe knows better than to let this happen–and so does the governor who inveighed against price controls less than a year ago.

Indeed, because California is a $2 billion market and growing, its price-control regime would make it the last place in the nation to obtain access to new medicines. In Europe, the imposition of price controls and protracted price negotiations delays access to new medicines by up to 3 years. Studies have show–particularly in the treatment of cancer, Alzheimer’s, diabetes and heart disease–that the delay in the launch of new medicines translates into more death, higher health-care costs, and a lower quality of life. The Schwarzenegger-Democrat proposal would erect the same sort or rationing and it would harm Medicaid patients the most. Ironically, such a price-control regime–with its threat to cut 40 percent of the price of new medicines–undermines and wastes California’s investment in stem-cell research. For once the money is spent confirming basic science, which company will want to pursue development in a state that punishes profit?

The proposal actually rewards those who are uninsured but can afford to buy coverage, particularly those making $70,000 a year or more. (It also encourages health insurers to dump prescription-drug coverage. Why provide it when the state will force deep discounts down the throats of drug and biotech firms?)

For example, while the bill covers drug expenses that exceed 10 percent of income, it turns out that, according to the California Health Care Foundation, the average Californian spends more a year going to restaurants ($3,500) and entertainment ($2,800) than on out-of-pocket health expenses ($2,500). By that logic, the state should negotiate discounts at Spago’s and Disneyland, too. And since hospitals cost more than medicine, maybe the governor should start denying the poor access to surgery until hospitals provide a 40 percent discount to middle class people who don’t want to buy health insurance.

If the governor and the Democrats were serious about health care, they could promote low-cost insurance coverage instead of protecting the wasteful benefits package negotiated by the unions. Instead, they are promising to provide another middle-class entitlement by sticking it to the poor and deepening the health disparities between the races. This is about as disgusting as it gets in politics and in public health. 

 – Robert Goldberg is vice president for the Center for Medicine in the Public Interest.

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