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Four Scenarios That Would Dramatically Improve Healthcare

Wed, 01/15/2014 - 9:09am
Robert Pearl, M.D.

Radical change often happens suddenly, the result of a single decision or event.

The fall of the Berlin Wall and the dissolution of the USSR stand out as two dramatic political examples. In a social context, Supreme Court decisions in Brown v. Board of Education or Roe v. Wade both radically changed our society.

Then there’s the U.S. healthcare system. We know it can take 17 years for a new, proven treatment to make its way into routine patient care. But on occasion, the pace accelerates and the industry is taken by storm. The passage of Medicare in 1965 and, more recently, the Affordable Care Act (ACA) in 2010 are two powerful examples. In both cases, the underlying coverage issues were debated for decades. But with their legislative passage, each brought sudden and unprecedented change to U.S. healthcare.

As we begin the New Year, I invite you to indulge in a thought exercise: Imagine what would happen to our healthcare system if the following hypothetical scenarios suddenly became reality.

Hypothetical #1: Legal access to medications beyond U.S. borders

What if U.S. patients could purchase prescription drugs from pharmacies in other effectively regulated countries?

When it comes to automobiles, new technologies or retail products, we do not hesitate to take advantage of price differences beyond our borders. Why not allow such an approach for pharmaceutical agents?

Does anyone really believe that brand-name prescription drugs sold at significantly discounted prices across our northern border — or in countries like England or Switzerland — are inferior to the exact same brands provided by pharmacies in the U.S.? Big pharma, also known as the U.S. drug lobby, wields massive political power. They are the reason this practice is prohibited.

Were this hypothetical to become a reality, we could expect U.S. drug companies to reduce their supply to those nations that would sell to Americans at lower prices. The U.S. government could counter this move with reference pricing regulations. In other words, public payers would only reimburse the price offered overseas for any given medication. Patients would be required to pick up the rest.

We have seen this in other areas of healthcare. The Pacific Business Group on Health (PBGH) limited what it would pay for hip replacements. Hospitals subsequently dropped the price of the procedure. With medications, market forces would likely drive down prices and put the U.S. at par with the rest of the world. This hypothetical raises an important question: How much longer do we want U.S. patients to pay more than the rest of the world for the exact same medications?

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