Wednesday, April 23, 2008

Rush Knows His Audience

by Ken Houghton

I'm buried right now, even without working for direct pay, but want to make certain this gets mentioned.

Mark Duggan and Fiona Scott Morton have an NBER paper (#13917; gated link here*) examining the results of the first year of Medicare Part D. To no one's great surprise, they find that it wastes a lot of money compared to direct government purchases that it works well for the most common drugs,* not well at all for the "protected" class of drugs (basically expensive cancer/AIDS treatment that have few rivals and are therefore all required to be carried by Part D providers), whose prices may have increased by their inclusion.

But what is most (generally) interesting is the list of most common drugs prescribed under Part D:
Lipitor, Zocor, Prevacid, Nexium, Zoloft, Epogen, Celebrex, Zyprexa, Neurontin, Procrit, Effexor, Advair, Paxil, Norvasc, Pravachol, Plavix, Allegra, Wellbutrin, Oxycontin, Fosamax, Vioxx, Singulair, Protonix, Actos, Ortho, Aciphex

That's right; "hillbilly heroin" is #19 on the IMS Health list of prescribed drugs under Part D.

*If anyone finds a non-gated version, feel free to ref it in comments and I'll add it. (Tom, just edit appropriately if you find one.)

**Duggan and Scott Morton do note that "If a price is suboptimally high, there can be over-utilization of the treatment, with physicians and other health care providers potentially inducing the demand of consumers," but appear to assume that is not the case here.

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