Prescriptive Solutions

Under one of the best universal healthcare plans in the world, only 7% of German residents say they have issues in paying their rather minimal contributions to their universal healthcare plan, which is fully accessible but still relies on both private health insurers and private doctors. Contrast that to the United States, which lacks such a universal plan, where one third of all Americans struggle with healthcare costs. “A study done at Harvard University indicates that [the inability to pay medical costs] is the biggest cause of bankruptcy [in the United States], representing 62% of all personal bankruptcies. One of the interesting caveats of this study shows that 78% of filers had some form of health insurance, thus bucking the myth that medical bills affect only the uninsured.” Investopedia.com.

We also have the highest costs for prescriptions in the developed world. When the Affordable Care Act (ACA – Obamacare) was passed in 2010, in order to placate the powerful pharmaceutical lobby, the bill promised not to challenge what these drug manufacturers charged for their prescriptions. Large and powerful healthcare exchanges were barred from using that power to negotiate lower drug prices. To make matters worse, the anti-government-supported healthcare stance of the GOP and the Trump administration – through Health & Human Services rulings and exemptions, executive orders, judicial action and legislation – have forced healthcare costs to skyrocket.

Prescription costs are still absurdly higher than what other nations charge for the same drugs. Trump’s jawboning and asking pharmas to publicly post their prices have done little if anything to mitigate that problem. Wink-wink. After all, Trump is a combination “President for the business and the rich” and crumb-thrower to social conservatives to hold his populist base intact. But those pharmas appreciate the tax cuts and allowing them to charge their scandalously high prices. They also know how to make political contributions to both sides of the aisle.

Claiming that clamping down on drug prices will stifle research, a myth that Republicans rely on, you have to ask if perhaps there just might be another way. Germany seems to have answered that question with a program that just might work here as well, one where government actually uses private insurers and private doctors, with supportive rules and subsidies along the way. Costs are absolutely controlled and limited.

“The German government doesn’t set drug prices, as some European nations do. And the country — home to some of the world’s largest drug makers — has a robust pharmaceutical market… ‘Germans don’t believe the government should run the healthcare system,’ said Franz Knieps, a former senior government health official who now heads an association of large German insurers. ‘But they wanted a system that’s affordable.’

“Building that wasn’t easy, but politicians, healthcare leaders and industry officials settled on a compromise that has saved billions of dollars and won the acceptance of even many drug makers… ‘We had a lot of doubts about the system when it first started,’ said Dr. Markus Frick, a senior official at Germany’s leading pharmaceutical industry group, the VfA. ‘Now we see it works for many, though not all, cases.’

“Germany’s drug pricing initiative was born of widespread fears — not unlike those driving today’s U.S. debate — that the rising cost of new specialty drugs would make health coverage unaffordable… With roots that date to the 19th century when industrial employers offered health protections to head off a threat of socialism, the German healthcare system is built on a tightly regulated market of private, nonprofit insurers, known as sickness funds… Germans are required to enroll in one of these funds, which are similar to U.S. health insurers.

“There are strict limits on how much patients must pay for their medical care — a major difference from the U.S., where patients’ deductibles have been soaring. Co-pays, for example, are limited to 10 euros per prescription. There are no deductibles… Sickness funds must cover new drugs as soon as they become available.

“Importantly, the funds also must collect enough in premiums to cover the costs of their members’ medical care… That meant that when drug prices started shooting up in the 2000s, sickness funds began running deficits and faced pressure to hike premiums… ‘It was a situation we couldn’t accept,’ said Daniel Bahr, a former minister of health. ‘We needed change.’

“On the left, politicians clamored for government price controls. Germany’s powerful pharmaceutical industry, in an echo of arguments made in the U.S, warned that would choke off innovation… Chancellor Angela Merkel’s right-of-center government chose a middle path… New drugs would have to go through a system of rigorous evaluation. Using the evaluations, sickness funds — not the government — would then negotiate prices with drug makers.

“Under this new system — known by its German acronym AMNOG — sickness funds must pay drug companies the list price for new drugs for one year after they are introduced, an important feature of the system designed to ensure patient access to new therapies… But the foundation of the system is an independent, transparent assessment of new drugs that is undertaken when the drug enters the market… Manufacturers must submit information about new drugs to a nongovernmental agency that compares them to existing therapies.

“The system ‘asks a very basic question: Is there an added benefit from a new drug? And it’s on drug makers to prove their case,’ said Dr. Jürgen Windeler, head of the Institute for Quality and Efficiency in Health Care, or IQWiG, the agency that conducts the analysis…

“[Thus,] Germany’s ability to provide citizens access to the latest drugs while keeping patients’ costs so low is made possible by a novel strategy launched in 2011 to rein in exploding prices that were threatening to bankrupt the nation’s healthcare system.

“Mixing free-market incentives to encourage innovation with regulation and lots of transparency, Germany’s drug review process gives manufacturers the chance to bring new products to market and charge higher prices — but only if they can show the new medications are better than existing ones.” Noam N. Levey writing for the June 20^th Los Angeles Times.

Bottom line: Germans almost never pay more than $11 for a prescription. We should learn and listen. The National Conference of State Legislatures tells us that: “Prescription drugs account for 10 percent of overall health spending in the United States, totaling $328 billion annually. (Also calculated as $450 billion when list prices and middle-man transactions are included).”  Don’t you love all those prescription drug ads? Wonder who pays for all that.

              I’m Peter Dekom, and since most legislation is drafted to favor the biggest campaign contributors, guess what kind of healthcare support we actually have in government?