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Chapter five examines the passage of the Medicare Modernization Act of 2003—a major social policy reform that delegates responsibility for a Medicare prescription drug benefit to commercial firms. The chapter argues that the Republican Congressional leadership used this form of delegated governance to reconcile competing electoral and free-market aims. Republicans faced intense pressure to address popular demands for a drug benefit but needed a policy that furthered long-term goals of marketization or even privatization of federal entitlements. To help build support for the reform, the Republican leadership enlisted interest group allies like the pharmaceutical and insurance industries, and they delegated powers to private actors with these groups in mind. They also used administrative design as a way to reconcile the competing preferences of conservatives worried about the creation of a vast new entitlement and mass public demand for a universal benefit. The result was a complex system of delegated governance, an extraordinarily complicated piece of legislation designed to meet the desires of many different factions.

This chapter examines how well prescription regimes perform their role of allowing psychoactive substances to be consumed for approved, i.e., medical, purposes, while preventing their use for non-approved purposes. It begins with a description of the prescription system that now operates in developed nations, and then lays out the regulatory tools which can influence prescription practices. It focuses on a relatively new set of studies that evaluate these interventions in terms of how they affect drug consumption and patient health. The final parts of the chapter consider the control of psychopharmaceuticals by mechanisms outside of the prescription regimes, such as efforts to control deceptive marketing and to reduce diversion through law enforcement.

Chapter 5 described what is known about the structure, prices, and products of illegal drug markets, and the nature and extent of harms that arise from them. This chapter describes another drug market, this one consisting of an international pharmaceutical industry that operates legally within the market economies of most countries. It begins with a historical introduction to the origins of psychoactive pharmaceuticals (also called psychopharmaceuticals interchangeably) and the ways in which they are produced and marketed. After describing how the pharmaceutical industry is organized on a global level, it suggests that, with the growth of modern medicine and particularly psychiatry, there has been a substantial growth in prescriptions for mental disorders and distress, and increased comfort with the use of such prescribed medications. This situation has had, in some countries, significant consequences for the illicit drug market. The chapter concludes with a discussion of the question: how separate are the regulated and unregulated markets? The answer is that the two worlds are not separated as much as they might at first appear.

The increase in both retiree medical care expenditures and the retired fraction of the population has put pressure on retiree health care insurance providers. This chapter assesses future prospects for retiree health insurance, focusing on traditional approaches to retiree health benefits where the employer assumes most risk, and on defined contribution approaches where significant risk is shifted to the retiree. It also examines government benefits for retirees, including new Medicare prescription drug benefits. It models future retiree health care costs and opportunities to save before retiring, highlighting public policy obstacles and issues for employer-provided retiree health benefits.

This chapter discusses the issue of access-to-medication in developing countries. It notes that these developing countries have struggled to balance patent rights with the issue of access-to-medication. India and Brazil, for example, have formed detailed compulsory licensing provisions, which are continually questioned by the more developed signatories of TRIPS. It then determines if and how developed countries provided access to medication to the marginalized, and studies the concept of patent balancing and the issue of price control of prescription drugs.

This chapter examines the careless use of prescription drugs such as Accutane in what Steve Findlay called “medicine-chest roulette.” In his May 1988 article in the U.S. News and World Report, Findlay reported that an estimated six million Americans experienced adverse drug reactions each year. He argued that pharmaceutical companies could not be blamed for this situation because they met their legal obligation to disclose their products' known side effects to physicians and pharmacists. Instead, he attributed the problem to the failure of physicians and pharmacists to pass on this vital information to their patients. This chapter considers the consumer drug reforms of the 1960s that contributed to the dismantling of the drugstores' traditional market protections. It also discusses the advent of direct-to-consumer advertising; how the dismantling of long-standing limitations on where prescription drugs could be sold and how they could be advertised affected patients and doctors; and how the confluence of aggressive advertising of new drugs, the growing extent of polypharmacy, and regulatory loopholes exacerbated the dangers associated with medicine-chest roulette.

This chapter examines how American consumers came to view the expense of prescription drugs as a “big pill to swallow” during the Cold War era. It considers how the cost and quality of prescription drugs became a central issue in the late 1950s and exacerbated the already shaky doctor–patient relationship as physicians were held responsible for concerns about both the prices and the safety of these medications. It also discusses the concern regarding the economic ties between physicians and the pharmaceutical industry and the drugstores' transition from traditional counter service to self-service. Finally, it explores how the widening distinction between over-the-counter and prescription drugs in the Cold War drugstore contributed to the revival of medical consumerism.

This chapter investigates the effect of health insurance coverage on the use of relatively new prescription drugs. It focuses on statins, a class of lipid-lowering drugs that were considered a major breakthrough after a number of important clinical trials were published. The chapter is organized as follows: Section 2firstly it briefly reviews the literature on technology diffusion and the relationship between insurance and consumption, and also covers the institutional setting in the United States. Next it offers a model of pharmaceutical adoption. The next section provides the results of the analysis. Finally it concludes with a discussion of the results and the policy implications.

This chapter examines direct-to-consumer advertising (DTCA) of prescription drugs in the United States and New Zealand and its economic effects on health care. It looks at the major issues that are considered by economists when evaluating DTCA and discusses the various debates over DTCA in the United States, drawing on the economics literature, mainly from industrial organization and health economics, and the health services literature. The chapter first provides an overview of U.S. regulation of DTCA of prescription drugs before turning to the evolution of DTCA and the steps that drug regulators took in response to the industry’s increased use of DTCA. It also comments on the role of physicians in DTCA of prescription drugs, along with health insurance and moral hazard.

This chapter examines frauds instigated by pharmaceutical companies as well as the medical supply and equipment industry. It first considers how large-scale frauds occur in the pricing, marketing, and distribution of prescription drugs. It then analyzes various forms of pharmaceutical fraud, such as switching drug prescriptions to exploit Medicaid reimbursement rules. It also looks at pharmaceutical frauds committed by TAP Pharmaceutical Products, Serono, Purdue Frederick Company and Purdue Pharma, and Schering-Plough Corporation; how fraud may arise from physicians' consulting relationships with pharmaceutical and medical equipment manufacturers; and anti-trust violations in the pharmaceutical and medical equipment industries. Finally, it discusses the high costs involved in health care fraud settlements and prosecutions.

This chapter focuses on George Bush's domestic policy. It examines four of Bush's domestic policy initiatives: education reform, the Medicare prescription drug benefit, social security reform and immigration reform. It analyses each of these issues to assess its congruence with the ideologies of the conservative movement and delineates conservative responses to Bush's initiatives. Finally it assess the extent to which these policies may have constrained the opportunities for future reforms.

There is extraordinary cross-national variation in the availability of prescription psychoactive drugs, with most prescription drug use being concentrated in developed countries. A variety of measures aim to prevent abuses such as ‘doctor shopping’ and diversion of psychopharmaceuticals from the medical and pharmacy systems. The evidence suggests that prescription regimes affect the prescribing practices of doctors, often resulting in substitution. Price can be used to channel demand between two drugs that are substitutes for each other, moving demand from a drug with more adverse consequences to a less risky alternative. Advice to physicians on prescribing, has limited effect unless it concerns a new and serious side effect and alternative medicines can be prescribed. The development of a strong pharmacy system can limit illicit diversion of prescription medications, but cannot always prevent periodic epidemics of prescription drug misuse.

This chapter is concerned with the issue of moral consistency. It analyzes whether those with strong commitments against animal research can maintain moral integrity while using products that have previously been tested on animals. It shows that animal rights advocates (ARAs) can choose between the Inconsistency Option and the Consistency Option if they are faced with the charge of hypocrisy. This chapter reveals that ARAs must take the charge of hypocrisy seriously. It also suggests that if the post hoc response is an adequate reply, then ARAs who use prescription drugs have an answer to the charge of hypocrisy.

From a nearly imperceptible start, federal policy on comparative effectiveness research gained substantial momentum over its eight-year odyssey and got several legislative toeholds. The story starts in May 2002 with a short bill introduced into the US House of Representatives by Representative Thomas Allen (D-Maine). This bill focused solely on prescription drugs and would have authorized the appropriation of $25 million for comparative effectiveness research to the Agency for Healthcare Research and Quality. It died in committee. The next year Representative Allen and a Republican co-sponsor JoAnn Emerson (R-Missouri) introduced a more ambitious bill that encompassed all treatments, not just drugs. By means of a circuitous path involving Senate Majority Leader Bill Frist (R-Tennessee) many elements of the 2003 Allen-Emerson bill became law as part of the 2003 Medicare Modernization Act passed by the Republican-held Congress and signed by Republican President George W. Bush.

This chapter focuses on the new Medicare Part D prescription drug program. Participation in Medicare Part D requires individuals to make active enrollment and plan choice decisions. Active decisions are made initially when first enrolling in the program, and can be revisited periodically during the program's annual open enrollment periods. Whether consumers make wise choices at these decision points is of interest not only for the evaluation of this particular market, but for consumer-directed health care more generally. The chapter explores how people decided among the prescription drug plan options made available through Medicare Part D, based on their prior drug use, self-rated health, and other factors.

In the years since Dr. Jack Kevorkian went to jail, public involvement with the issues of physician-assisted suicide and voluntary active euthanasia may seem to have subsided in the United States. Many other countries have been concerned with end-of-life issues, including Canada, the Netherlands, Britain, Australia, Switzerland, Belgium, and the Scandinavian countries, but the change is most evident in the United States. This chapter looks at the ways in which new strategies of political and legal activism by both proponents and opponents of legalization are tending to escalate the debate. It examines the controversy surrounding an Oregon legislation that would prohibit the dispensing or distribution of scheduled drugs for the purpose of causing, or assisting in causing, the suicide or euthanasia of any individual. It discusses a series of methods of producing death that can be employed without the assistance of a physician and without prescription-controlled drugs, though they will still assure a gentle, easy death. These techniques are generally referred to as “self-deliverance new technologies,” or “NuTech”.

This concluding chapter examines efforts to make health care more consumer-friendly, including coupons for prescription drugs, lotteries for in vitro fertilization treatments, and smartphone apps to measure blood pressure or blood sugar. It first considers how cellphones and wireless connections can enable patient-consumers to gain easier access to their medical records, along with the attitudes of health providers toward such prospects. It then discusses the inroads that the language of retail has made into contemporary discussions of patient care; the extent to which older distinctions between professionalism and commercialism have persisted in American medicine today; and the positive achievements of medical consumerism. It also assesses the quality of care in 2015 compared to 1965 and looks at the debates over who should bear the rising costs of medical care. Finally, it emphasizes the importance of medical consumerism in addressing the challenges that lie ahead with regards to medical care.

This chapter discusses other forms of substance abuse (i.e., illicit drugs and prescription medications) in late life, in general, and in relation to retirement, in particular. Drawing from the results of the authors’ own 10-year study as well as from other studies, the chapter seeks to answer such questions as the following: How widespread is drug abuse/misuse in the older population, and what are the consequences of such behavior for individuals, their families, and society? What individual characteristics and demographic factors (e.g., age) might influence the use of illicit drugs or misuse of prescription drugs in late life? And can factors related to retirement (bridge employment, age at retirement) be identified as affecting individuals’ vulnerability to abusing substances other than alcohol?

Prescription drug monitoring programs (PDMPs) are secure, online, state-based databases that contain information about controlled substance prescriptions written by clinicians and dispensed by pharmacists within a jurisdiction. In this chapter, current and future trends impacting PDMPs are reviewed and the implication of these trends for the future development of even more effective PDMPs is discussed. Uses of PDMPs by public health partners are also reviewed. For example, law enforcement officials may use data collected by PDMPs when investigating unusual prescribing patterns. Law enforcement officials may also use PMDP data in drug courts and other criminal diversion programs. Medical licensing boards use PMDP data to assess aberrant prescribing practices. Health systems, insurers, and public health officials use aggregated PDMP data as part of their efforts to evaluate a quality improvement initiative, an opioid stewardship program to improve opioid prescribing system-wide, or broad changes to prescribing patterns across a city, county, or state.

This chapter uses the Medicare Current Beneficiary Survey to analyze trends in the utilization of pharmaceuticals by disabled and nondisabled beneficiaries in the community (noninstitutionalized) between 1992 and 2001. It examines both the over-sixty-five population and the population under sixty-five that qualifies for Medicare by virtue of their disability. It compares the rates of growth of prescription drug use in these two groups, along with changes in the share of medical expenditures attributable to prescription drugs. It examines both overall prescription drug uses and use by class. It then discusses the implications of changing disability rates for drug benefits and for overall health care expenditures.