1

RIPPING THE BAND-AID OFF OF MEDICARE PART D: THE PROBLEM OF ACCESS TO

PRESCRIPTION DRUGS

Megan R. Donley

INTRODUCTION

Ann Remaley walked out of the pharmacy and refused to purchase her medication when

the pharmacist said the prescription would cost six hundred dollars to fill rather than the eighty-

six dollars Ann paid the previous month.1 Many people share Ann’s experience of needing

medication that is not affordable even with aid from the United States government through

Medicare Part D. Pamela Cianci, a cardiology nurse reported that even with Medicare Part D

insurance coverage, “many people over 65 come close to bankruptcy over medication.”2

This article will examine whether it is the United States government’s proper role to

provide senior citizens with all prescription medications to solve the problem of the lack of

access to necessary medication. The first section details the problem that many seniors face in

obtaining their medications by examining Medicare Part D and its infamous donut hole,

establishing that wealth is not the only hindrance to access, and reviewing the facts and figures

relating to the rising cost of prescription drugs. In the second section, this article examines

various theories presented for solving the access problem including the international or

socialized medicine model, the rights based approach, the theory of consensus, the solution

through economics and rationing, and finally an ethical model. Then, in the third section, this

article will propose creative solutions involving individual responsibility and corporate ethics.

1 Caitlin Fertal, Seniors stuck in Medicare ‘donut hole’, NEWS-HERALD, Feb. 26, 2011, available at http://www.

news-herald.com/articles/2011/02/26/news/nh3691557.txt?viewmode=fullstory. 2 Humberto Cruz, Finally Getting on board with Medicare Drug Plan, CHI. TRIB., Oct.17, 2010, Money & Real

Estate at 8.

2

Lastly, this article will conclude by advocating creative solutions over universal health care or

increased government interference as the most effective solution to the problem that seniors face

in accessing prescription drugs.

I. ILLUSTRATING THE PROBLEM

A. Medicare Part D and the Donut Hole

Prescription drug coverage under Medicare Part D began on January 1, 2006.3 While

private insurance companies administer Medicare Part D prescription drug plans, the United

States government sets the terms of the plan and authorizes a gap in coverage, commonly

referred to as the donut hole, in order to control the costs.4 The Medicare Part D recipient

receives generous insurance coverage until he or she purchases $2,830 of covered medications.5

Once the Medicare recipient spends $2,830 on covered medications, the notorious donut hole

operates to reduce coverage to a discount of 7% for generic drugs and 50% for name brand

prescription.6 When the Medicare recipient spends $6,440 on prescription drugs, calculated by

the full (not the discounted) cost of the prescriptions, then generous insurance coverage

resumes.7

The operation of the donut hole is best explained by an example. Jose M. Flores, a 66-

3 David Pratt, Health Care Reform: Will it Succeed?, 21 AL. L.J. SCI. & TECH. 493, 534 (2011).

4 Cruz, supra note 2, at 8; Pratt, supra note 3, at 534.

5 Pratt, supra note 3, at 534.

6 Fertal, supra note 1. Originally, Medicare recipients received no insurance coverage during the donut hole. Pratt,

supra note 3, at 534–35. However, in 2011 there is a limited discount for generic and brand name prescriptions

drugs for seniors using Medicare Part D. Id. See 42 U.S.C. §§1395w-102(b)(2)(C), 1395w-102(b)(2)(D) (2011).

Beginning in 2010, Congress plans to gradually reduce the gap in coverage from 100% in 2010 to 25% in 2020.

JANET LUNDY, KAISER FAMILY FOUNDATION, PRESCRIPTION DRUG TRENDS 6 (2010). Congress also intends to

gradually reduce the threshold for catastrophic coverage during 2014 through 2019. Id. 7 Pratt, supra note 3, at 534.

3

year-old school bus mechanic, was a Medicare beneficiary with a Part D prescription drug plan.8

When he began using his Medicare Part D insurance, he was paying $40 a month for Byetta, an

injectable diabetes medication, and $20 a month for Plavix, a blood thinner to reduce his chance

of a heart attack.9 After five months of coverage, Jose had reached the coverage gap and was

responsible for paying $297.18 a month for his medications.10

In addition, Jose continued to pay

the premium for the Medicare Part D insurance that no longer generously covered his

medications.11

His insurance will not resume generous coverage until he spends roughly $3,600

out-of-pocket on his prescriptions.12

Jose did not know about the coverage gap when he signed

up for Medicare Part D, and the unanticipated lack of coverage was financially taxing and made

him angry with Medicare and even with the pharmacists who tried to help.13

While low-income

people may be eligible to receive additional aid from the federal government with their drug

costs during the coverage gap, more than half of the applications are rejected because they

slightly exceed the federal limit for assets.14

Even though the government attempts to make

health care and prescription drug coverage affordable for the elderly through Medicare, the donut

hole demonstrates that the government does not completely meet the senior population’s need for

affordable medication.

B. Barriers to Access Beyond Cost

Even those seniors who can afford their medications may be limited in their access to

certain prescriptions. In an effort to control costs associated with the rising price of prescription

drugs, insurance companies including those that offer Medicare Part D plans employ utilization

8 Robert Pear, In Texas Town, Patients and Providers Find New Prescription Drug Plan Baffling, N. Y. TIMES, June

11, 2006, at 132. 9 Id.

10 Id.

11 Id.

12 See Pratt, supra note 3, at 534.

13 Pear, supra note 8, at 132.

14 Id.

4

management strategies.15

These cost savings policies include increasing cost-sharing amounts or

co-pays, excluding certain medications from coverage, applying quantity dispensing limits,

requiring prior authorization,16

and using “step-therapy.”17

Additionally, insurance companies

often employ a plan that tiers coverage and provides the most assistance for the least costly

prescriptions.18

For example, the average co-pay in 2009 under a tiered coverage plan was “$10

for generics, $27 for preferred drugs, $46 for nonpreferred drugs, and $85 for fourth-tier

drugs.”19

While these strategies may save the insurance company money, they hinder autonomy

and eliminate personal choice. Each of these measures controls what medications the patient has

access to regardless of his or her ability to pay.

C. Facts and Figures

In industrialized nations, the healthcare sector represents anywhere from 7% to 14% of

the gross domestic product (GDP).20

The United States spends 17% of its GDP on health care,

which is about twice the average spent in other prosperous countries.21

In 2009, the average

American spent $7,960 per year on health care while the average citizen of other industrialized

15

LUNDY, supra note 6, at 6. 16

“[M]any patients experienced significant delays in getting medications because their doctors had to seek

exceptions or obtain ‘prior authorization.’” Pear, supra note 8, at 132. Prior authorization is a process whereby the

doctor must submit a request on the patient’s behalf to be covered for a specific medication. Interview with Julianne

S. Orlowski, Medical Doctor, Ctr. for Arthritis and Rheumatic Diseases, in Chesapeake, Va. (Aug. 8, 2010).

Usually, the insurance company will ask the doctor to certify why the specific prescription is medically necessary.

Id. If the insurance company is not satisfied with the doctor’s recommendation, the insurance company will have

the doctor conduct a “pier conference” over the phone with another doctor, who works for the insurance company

and may not practice the same specialty as the prescribing doctor. Id. The pier conference is a conversation

between the doctors where the doctor working for the insurance company attempts to convince the prescribing

doctor to prescribe something different to keep insurance and overall medical costs down. Id. After the insurance

doctor gives his stamp of approval, the insurance company will then grant coverage. Id. Because this process is so

time consuming and frustrating, one pharmacist said, some doctors are not willing to call insurers to request prior

authorization. Pear, supra note 8, at 132. 17

LUNDY, supra note 6, at 6 (defining step therapy as “starting with the most cost-effective drug and progressing to

more costly therapy only if necessary”). 18

Id. 19

Id. 20

Uwe E. Reinhardt, Abstracting from Distributional Effects, this Policy is Efficient, in HEALTH, HEALTH CARE,

AND HEALTH ECONOMICS: PERSPECTIVES ON DISTRIBUTION 1, 2 (Morris L. Barer, Thomas E. Getzen & Greg L.

Stoddart eds., 1998). 21

Pratt, supra note 3, at 495.

5

and wealthy nations spent between $2,983 and roughly $4,000 dollars a year on health care.22

Although prescription drugs are a relatively small national expenditure, about 10% in 2008 of the

national expenditure on health care, it is the fastest growing sector within health care.23

Over the past fifty years, the cost of pharmaceuticals has skyrocketed, making many

medications inaccessible to the average senior American without some sort of assistance through

Medicare Part D or additional private health insurance. National expenditures on prescription

drugs were $6 billion dollars in 1965.24

That figure rose steadily to $63 billion spent on

prescription drugs in 1992.25

While that number was projected to reach $111 billion spent in

2000,26

the actual amount spent in 2005 was $200.7 billion dollars.27

In 2008, $234.1 billion

dollars were spent on prescription medication in the United States.28

That number is six times

larger than the $40.3 billion dollars spent on prescriptions in 1990.29

The rising cost of

prescription drugs has been passed along to consumers. The average price for a prescription in

1998 was $38.43, which rose to $71.69 in 2008.30

For brand name drugs, the average cost in

1998 was $35.22 while the average cost in 2008 was $137.90.31

Consumers are not the only ones dealing with the rising costs of prescription drugs. For,

the government is paying a large part of the national expenditure on prescription medication. In

the first year that the federal government offered Medicare Part D, the government alone spent

22

Ezekiel J. Emanuel, Spending More Doesn’t Make Us Healthier, N.Y. TIMES, Oct. 27, 2011, http://opinionator.

blogs.nytimes.com/2011/10/27/spending-more-doesnt-make-us-healthier/?ref=opinion. 23

LUNDY, supra note 6, at 1. 24

CONGRESSIONAL BUDGET OFFICE, STUDY: PROJECTIONS OF NATIONAL HEALTH EXPENDITURES 22 (Oct. 1992). 25

Id. 26

Id. 27

KAISER FAMILY FOUNDATION, PRESCRIPTION DRUG PLANS 1 (2007). 28

LUNDY, supra note 6, at 1. 29

Id. 30

Id. at 3. 31

Id.

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$32 billion on prescription drugs.32

The federal government in 2007 spent $60 billion on

prescription drugs for Medicare and Medicaid combined.33

In 2008, the federal government

spent $52.1 billion dollars on prescription drugs for Medicare Part D alone.34

Even with the government providing substantial assistance to a segment of the

population, there is still an ethos that government can and should do more to enable Americans

to access the medications they need. The remainder of this paper will question whether this

ethos is sound and evaluate the possible solutions for the problem of lack of access to

prescription drugs.

II. THEORIES ON HOW TO SOLVE THE PROBLEM

A. The International Model

One theory advanced for fixing the health care system is to adopt socialized medicine

policies similar to those implemented in many other prosperous nations. “Nations that provide

universal coverage to their populations have accomplished this through a combination of

compulsion and subsidization; individuals are required to have health insurance, insurers are

required to cover everyone, and cross-subsidization across risk groups allows the entire

population to have health insurance coverage.”35

Great Britain began a program of socialized medicine in 1948 that is now “one of the

largest publicly-funded heath services in the world.”36

While the British heath care system

32

CONGRESSIONAL BUDGET OFFICE, STUDY: THE LONG-TERM OUTLOOK FOR HEALTH CARE SPENDING 18 (Nov.

2007) available at http://www.cbo.gov/doc.cfm?index=11838&zzz=41243. 33

Id. 34

LUNDY, supra note 6, at 7. 35

Pratt, supra note 3, 580. 36

Karen DeBolt, Comment, What will Happen to Granny? Ageism in America: Allocation of Healthcare to the

Elderly & Reform Through Alternative Venues, 47 CAL. W. L. REV. 127, 140 (2010).

7

“covers everything from prenatal screening to end-of-life care,”37

it often denies seniors access to

certain prescriptions, particularly emerging treatment for diseases like kidney cancer, when the

National Institute for Health and Clinical Excellence determines that offering the treatment

would be too costly.38

This is not a recent trend in Britain’s health care system; rather Britain

historically has denied certain treatments to the elderly based on a cost versus quality of life

analysis that measures “the quality of life that a treatment buys with the quality of that added

time resulting in the ‘Quality Adjusted Life Year.’”39

The quality of life analysis has been used

to deny the elderly kidney dialysis and popular Alzheimer’s medications like Aricept.40

Similarly, Canadians have experienced problems with their government-run single-payer

health care system and are attempting to expand coverage in order to meet current needs.41

“Canada’s health-care system is underperforming on key measures, including timely access to

services and ensuring accountability, despite Canada being one of the highest spenders of health

care compared to other countries with universal health care.”42

Since less than half of

prescription drug costs are currently covered, the doctors urge universal access to prescription

drugs.43

While the additional coverage would certainly increase spending, it would help people

with chronic or other costly ailments. An example of a potential beneficiary is Leanna Teperman

who has a learning disability and Crohn’s disease.44

Every few months, she has a flare up which

increases her medication costs by roughly one hundred dollars.45

Since she is an invalid and

37

Id. at 141. 38

Id. 39

Id. at 141–42. 40

Id. 41

Theresa Boyle & Jennifer Yang, Doctors urge system overhaul Health care needs to be massively transformed to

meet changing needs and improve service, CMA’s new report says, TORONTO STAR, Aug. 4, 2010, at 1; Pratt, supra

note 3, at 499. 42

Id. 43

Id. 44

Id. 45

Id.

8

ward of the state, she has to panhandle for money to cover the cost.46

As Teperman’s story

demonstrates, not all prescription drugs are fully covered by Canada’s socialized medicine

program.

B. The Rights Based Approach

Many people believe that everyone should be able to access the medical care and

prescription drugs that they need regardless of their ability to pay. The American Civil Liberties

Union (ACLU) is a major proponent of the rights based approach which recognizes in every

human being a right to receive necessary medical care regardless of ability to pay and the right to

inform their own medical choices.47

The rights based position affirms that, “[e]conomics and

technology often seem to dictate choices – and the recognition of human rights is the only force

powerful enough to prevent medicine from becoming an impersonal and dehumanizing

industry.”48

Emphasizing that, “it is a national disgrace that 40 million Americans have no

health insurance, and millions of others have inadequate coverage,” the ACLU urges that the

“‘right to health care’ should be recognized as an economic entitlement in this country.”49

Inherent in the claim of an entitlement to health care is the necessity of someone or something

providing the means to fulfill that promise.

While the ACLU advocates for recognition of a right to health care, the exact meaning of

the right is not always clear. The ACLU states that, “[r]ights protect personhood and the

individual’s own value system. Rights help prevent people from being treated as inter-

changeable, inanimate objects, and insist that they be treated as persons.”50

Although most

people would agree that these are admirable goals, many would disagree over whether these

46

Id. 47

GEORGE J. ANNAS, THE RIGHT OF PATIENTS: THE BASIC ACLU GUIDE TO PATIENT RIGHTS xii (2nd ed. 1992). 48

Id. 49

Id. at xv. 50

Id. at 2.

9

precepts ought to be ensured by the government.

The main issue is what does it mean to have a right to health care. Traditionally, a right

means that one has a valid claim to the something either by law, by an appeal, or by secular or

religions morals.51

However, human rights are slightly different than traditional rights. Human

rights are those that “ought to be” and, “which are critical to maintaining human dignity but have

not yet attained legal status.”52

According to the ACLU Patient Bill of Rights, the patient has the right of “access to

reasonable medical care without regard to the source of payment for that treatment and care.”53

The ACLU is not the only organization that advocates on behalf of the right to health care. Both

the United Nations and the World Health Organization specifically recognize the right to health

care in proclamations.54

Additionally, the Preamble to the 1966 Comprehensive Health Planning

Act passed by Congress states, “the fulfillment of our national purpose depends on promoting

and ensuring the highest level of health attainable for every person.”55

Even as these

organizations tout the right to health care, very few have been transparent about who must pay

for the prescription medications that are promised within the right.

Also, the United States has yet to recognize a legal or constitutional right to health care.

A constitutional right to health care has been discussed, but not yet recognized, in case law. In,

Abigail Alliance for Better Access to Developmental Drugs v. Von Eschenbach, the Court of

Appeals for the D.C. Circuit originally granted a right to access certain drugs.56

Then, in a

decision from the en banc panel of the D.C. Circuit, the court concluded that there was no

51

BLACKS LAW DICTIONARY 1436 (9th ed. 2009). 52

ANNAS, supra note 47, at 7–8. 53

Id. at 9. 54

Id. at 13. 55

Id. 56

445 F.3d 470 (D.C. Cir. 2006), rev’d en banc, 495 F.3d 695 (D.C. Cir. 2007).

10

constitutionally recognizable right to health care.57

Ultimately, the Supreme Court declined to

recognize a fundamental or constitutional right to health care.58

Consequently, there has never

been a legally recognizable right to health care in the United States despite persuasive rhetoric

for change on this topic. There may never be a right to health care recognized in America

because ensuring the right to health care means assuming the cost to the government. Without a

legal right to health care or prescription medications, the government is not obligated to provide

its citizens with those goods or services.

C. The Approach From Consensus

Another approach to achieving the proper solution for supplying prescription medication

is the consensus theory. This theory asks whether there is a majority opinion, a consensus, on

the topic.59

Whatever this consensus concludes is adopted as the correct approach to fixing the

problem, regardless of consequences.60

Proponents of the consensus theory claim that a majority

of Americans believe that our “health care system must have some form of national health

insurance, paid for by tax dollars, which guarantees all of us, regardless of wealth or

employment, access to primary care.”61

Under this majority opinion national health care system,

doctor’s visits and routine procedures would be covered.62

Medication, prescription drugs, and

preventative measures would also be covered at no or little cost to the consumer.63

Even though the American government already offers health care for children, the

elderly, and the disabled, many people feel that this does not go far enough to fulfill the

57

Id. 58

For a more thorough discussion on the lack of a constitutional right to health care, see Elizabeth Weeks Leonard,

Right to Experimental Treatment: FDA New Drug Approval, Constitutional Rights, and the Public’s Health 27 J. L.

MED. & ETHICS 269 (Summer 2009). 59

DAVID F. KELLY, CRITICAL CARE ETHICS: TREATMENT DECISIONS IN AMERICAN HOSPITALS 152 (1991). 60

Id. 61

Id. 62

Id. 63

Id.

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government’s duty to ensure the welfare of its citizens. Establishing a consensus, 61% percent

of Americans polled in 1991 strongly agrees with the statement that, “[p]eople who are

unemployed and poor should be able to get the same amount and quality of medical services as

people who have good jobs and are paying substantial taxes.”64

Another 23% agreed but not

strongly with the statement, leaving only 16% of Americans expressing the view that they were

unsure about or disagreed with the statement.65

However democratic the consensus approach may be, one must wonder if there really is a

consensus on which to base the decision. While most Americans resoundingly agree that

everybody should have access to the same medical care that a Millionaire could afford through a

universal health care system,66

Americans are unwilling to pay for this plan through higher taxes.

Thus, while most people generally agree that people should have general access to health care,

there is no consensus about who should pay and how expensive the burden should be.67

The difference of opinion about who should pay results in heated debates, with opinions

and proposals across the spectrum like reducing government interference or, conversely,

providing universal health through the government. For example, John McCain gave a speech

during his 2008 campaign for President at Carnegie Mellon University that elaborated on his

view of what should be done to fix the health care system in America.68

He acknowledged that

there is a problem when “[m]any retired Americans face the terrible reality of deciding whether

to buy food, pay rent, or buy their prescription drugs.”69

Surprisingly, McCain followed up

acknowledging the problem by suggesting that the proper role of government is to help these

64

Reinhardt, supra note 20 at 17. 65

Id. 66

See KELLY, supra note 59, at 152. 67

Id. at 138. 68

John McCain, McCain on the Economy at Carnegie Mellon University, N.Y. TIMES (Apr. 15, 2008) http://www.

nytimes.com/2008/04/15/us/politics/15text-mccain.html?pagewanted=4&sq=mccain%20address%20at%20carnegie

%20mellon%20university&st=cse&scp=1. 69

Id.

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needy people.70

Yet, he qualified how the government should help by pointing to the recently

implemented Medicare prescription drug plan, “a new and costly entitlement” that “included

many people who are more than capable of purchasing their own medicine without assistance

from taxpayers who struggle to purchase their own.”71

While the government should help people

who cannot afford their prescriptions, “[p]eople like Bill Gates and Warren Buffet don’t need

their prescriptions underwritten by taxpayers. Those who can afford to buy their own

prescription drugs should be expected to do so.”72

From the tone of these debates, there seems to be more conflict than consensus. Even

proponents of the consensus theory recognize that the application of the approach must be

limited because “[u]nlike some other issues in health care ethics, no consensus has arisen about

allocation.”73

Until the consensus on the entitlement can be reconciled with a consensus on who

bears the burden of granting the resources to fulfill the entitlement, the consensus theory is

ineffective to inform what ought to be the solution to the problem of access to prescription

medication.

D. The Approach From Economics & Rationing

Despite the ethos supporting fair medical treatment regardless of one’s ability to pay, the

United States, until very recently, had an income-based healthcare system that effectively

rationed medical resources to those who could pay.74

While the income-based approach may

seem contrary to a fairness ethos, this model gains support as the most efficient distribution of

healthcare resources when there is an open and free market.75

However the reality is that,

70

Id. 71

Id. 72

Id (emphasis added). 73

KELLY, supra note 59, at 138. 74

Reinhardt, supra note 20 at 17. 75

Id. at 19.

13

“[p]resent allocation mechanisms restrict access for the poor, deemphasize prevention and

education, and often fail to be cost-effective.”76

This statement unearths the truth that rationing

occurs in the present system based on ability to pay. “By definition, rationing health care entails

leaving certain people without some form(s) of potentially beneficial health care at least

temporarily and against their wishes.”77

Rationing is a factor that occurs implicitly, by default

through economic status, or explicitly through legislation or governmental decision-making.78

Anyway it is disguised or looked at, rationing is necessary and inevitable when the resources are

limited and cannot possibly be available for everyone and in every circumstance.79

Thus,

rationing is an important factor to consider when creating a solution with any of the approaches

to the problem of access to prescription drugs.

i. Normative Economics

Some economists suggest that the most efficient way to allocate resources is to permit the

open market to operate freely. Through the supply, demand, and competition mechanisms,

equilibrium will be obtained where the largest amount of people will be able to obtain the

medical services and prescription drugs they need at an affordable cost.80

Other economists

advance the theory of welfare economics, which measure the success of health policy with utility

based principles and preferences of the individual beneficiary.81

Moreover, the “extra-welfarist”

approach rejects the subjective framework developed for welfare economics and holds, rather,

that the normative may be found by measuring the “health” of the beneficiary with “quality-

76

KELLY, supra note 59 at 141. 77

John F. Kilner, Rationing and Health Care Reform in BIOETHICS AND THE FUTURE OF MEDICINE: A CHRISTIAN

APPRAISAL 290, 290 (John F. Kilner, Nigel M. de S. Cameron & David L. Schiedermayer eds., 1995). 78

DeBolt, supra note 36, at 133–34. 79

Kilner, supra note 72, at 290–91. 80

See generally ADAM SMITH, THE WEALTH OF NATIONS (Edwin Cannan ed., University of Chicago Press 1976)

(1776). 81

Jeremiah Hurley, Welfarism, Extra-Welfarism and Evaluative Economic Analysis in the Health Sector, in

HEALTH, HEALTH CARE AND HEALTH ECONOMICS: PERSPECTIVES ON DISTRIBUTION 373, 375 (Morris L. Barer,

Thomas E. Getzen & Greg L. Stoddart eds., 1998).

14

adjusted-life-years” much like the health care system in Great Britain.82

Each of these economic

structures determines the right system by what produces the best result measured by either the

welfare or “extra-welfarist” framework.83

There are, however, problems with economics indicating “ought” or moral imperatives.

“The ethical principles that promote free and fair competition are quite different from the ethical

principles that preserve the integrity of the physician-patient relationship and specifically those

that protect patient welfare, and these principles can lead to quite different outcomes.”84

Additionally, the aims of medicine and business contrast, because, “[t]he traditional ‘good’ for

medicine, dating back to the Hippocratic Oath, has been the health of the patient, while the

‘good’ for business has been and continues to be profit.”85

While these aims are essentially at

odds it is possible, though rare, for a business to adopt the medical ethic and promote the good of

the patient over the goal of maximizing profits.86

This cross over is essential especially in

businesses like health insurance and the pharmaceutical industries that exercise control over a

patient’s medical wellbeing.

ii. Explicit Rationing

If rationing does not occur in the private market through economic indicators, the only

other controlling force would be the federal government. Nancy S. Jecker and Robert A.

Peralman propose two “ethical” ways to ration scarce medical resources when the government

82

Id. 83

Id. 84

Scott B. Rae, Money Matters in Health Care in CUTTING-EDGE BIOETHICS: A CHRISTIAN EXPLORATION OF

TECHNOLOGIES AND TRENDS 103, 105 (John F. Kilner, C. Christopher Hook & Diann B. Uustal eds., 2002) (quoting

Wendy Mariner, Business Ethics vs. Medical Ethics: Conflicting Standards for Managed Care, 23 J.L. & MED.

ETHICS 236, 236 (1995)). 85

Id. 86

See infra section III.B for examples of pharmaceutical companies carrying out a medical or humanitarian ethic

while conducting a profitable business.

15

finances health care.87

First, access to non-basic health services should be limited.88

Jecker and

Pearlman admit that making the determination between those services that are basic and those

that are not is a qualitative assessment, but believe that policy makers are able to ethically draw

the line.89

While publicly funded health care would not fully cover non-basic services, the

individual should be able to obtain the additional services, if he has the ability to pay.90

This

reasoning is circular, and arrives back at the ability to pay norm that publicly funded health care

was championed to alleviate. Second, a “medical benefit standard should be used to distribute

health care resources between persons.”91

The decision of who would benefit the most would be

left to health care providers.92

However, this kind of theory would lead to numerically grading

individuals based on the likelihood that a treatment would result in a higher quality of life. Thus,

the second method of rationing lacks predictability and eliminates the sickest from consideration

for treatment. This sort of rationing is the type that Great Britain and other European countries

have adopted and is essentially Utilitarian.93

iii. Other Approaches Through Economics

Many people believe that the most effective way to drive down prescription drug costs is

to open the market by allowing Americans to purchase their prescriptions from suppliers in other

nations. Specifically, one scholar argues that “[i]f Americans could pay Canadian prices for

brand name drugs, other things equal, we would save a great deal of money. I estimate this

87

Nancy S. Jecker & Robert A. Peralman, An Ethical Framework for Rationing Health Care in BIOETHICS: BASIC

WRITINGS ON THE KEY ETHICAL QUESTIONS THAT SURROUND THE MAJOR, MODERN BIOLOGICAL POSSIBILITIES AND

PROBLEMS 538, 538 – 39 (Thomas A. Shannon ed., 4th ed. 1993). 88

Id. 89

Id. 90

Id. 91

Id. at 538. 92

Id. at 539. 93

See supra part II.A.

16

saving at close to $ 60 billion in 2004.”94

The savings to Americans when they import

medication results not from market competition but from taking advantage of the negotiated

price of medication those other nations have secured for their people.95

While other nations

establish price controls for medication, the United States allows the pharmaceutical companies to

establish the price of medications.96

Importantly, Medicare is not able to lawfully engage in direct negotiation with the

manufacturer or setting prescription drug prices for Medicare.97

“In the 110th

Congress, the 2008

presidential campaign, and the 111th

Congress, proposals to allow or require Medicare to

negotiate drug prices with drug makers have been considered but not enacted.”98

However, in

early 2010 President Barack Obama conducted closed-door negotiations with the pharmaceutical

companies to reach a compromise known as the “PhRMA deal.”99

Under the terms of the deal,

the pharmaceutical companies agreed to support the president’s policies on health care reform,

pay the government “$80 billion in fees as well as give drug discounts to seniors in Medicare

over 10 years.”100

In exchange the President promised to refrain from the following actions:

pursue rebates on drugs covered by Medicare Part D pursuant to a policy established by George

W. Bush, use Medicare’s purchasing power to negotiate with the manufacturers for lower drug

prices, advance or support “future Congressional efforts to re-import cheaper generics or other

drugs from foreign countries like Canada,” or work to repeal Medicare’s “non-interference” law

that makes it unlawful for Medicare to directly negotiate with the manufacturers or set drug

94

Alan Sager, Papers from the Symposium U.S. and Canadian Pharmaceutical Policy: A Tale of Two Countries:

Making Today’s Drugs Affordable for All While Boosting Breakthrough Research: A Few Lessons from the

Arguments Over Importing Drugs from Canada, 20 CONN. J. INT’L L. 257, 257 (2005). 95

Id. at 258. 96

Id. 97

LUNDY, supra note 6, at 7. 98

Id. 99

Elizabeth MacDonald, Drug Industry: President Reneges on Health-Reform Deal, FOXBUSINESS (Apr. 21, 2011)

http://www.foxbusiness.com/markets/2011/04/21/drug-industry-president-renegs-health-deal. 100

Id.

17

prices.101

While the benefits of this deal have begun to be felt,102

the President has repudiated the

deal and reneged on most of his promises in an effort to balance the budget.103

In his deficit

plan, the President proposed to implement price control measures for prescription drugs and to

pursue the rebate scheme that already exists under Medicare Part D.104

Understandably, the

pharmaceutical companies oppose the President’s switch in policy and it remains to be seen

whether the drug companies will continue to uphold their end of the deal.

In addition to laws against official government interference with price controls,

pharmaceutical companies are able to set the prices high because they hold patents that

effectively create temporary monopolies.105

“[P]atent-generated monopolies, mergers and

oligopolies, administered pricing, substantial information inadequacies and distortions, supplier-

induced demand, insurance coverage, and other forces all tend to inflate prices here above the

levels that would be found in a free market.”106

Patents, government policies, the state of the free market, the rising cost of medication,

and the government deficit are all factors that operate in the economic analysis. While, the

American economy is not a completely free market system, the economic reality is that federal

government interference with any one of the factors will have a major impact on the other factors

and perhaps further develop the nation’s deficit. With so many economic interests in tension, it

is unlikely that more government interference in the medical sector will produce the result of

101

Id. 102

Seniors this year will receive a 50% discount on name brand prescriptions and a 7% discount on generic

medications throughout the donut hole as a result of the “PhRMA deal.” See supra section II.A. 103

MacDonald, supra note 94. 104

Id. 105

Sager, supra note 89, at 258. 106

Id.

18

seniors having their needed medications without coming at too high a cost to the rest of the

factors.

E. Approach from Ethics

Another approach combines ethics and rationing to develop a framework for

acknowledging the relative scarcity of prescription medications and deciding whether to pursue

treatment. ‘Soft rationing’ is a more equitable approach to rationing and is championed by a

member of the Catholic Church as fitting with church doctrine.107

In order to free up scarce

resources so that they may be allocated more efficiently, the Catholic tradition “is clearly open to

the possibility that treatment may rightly be foregone in order to help others with the resources

saved” when the decision is based on the conclusion that the treatment is unreasonable, that

refusing treatment would allow the patient to die, or that patient autonomy is being exercised.108

This approach is also consistent with end of life precepts advocated by other Christian

scholars.109

Christians must not “forget that what we ought to mean when we say that human life

is of infinite value is not that it is worth an infinite number of dollars but that it cannot be

measured by dollars, few or many.”110

If this is true, then perhaps another thing to consider is

allocating resources based on age.111

For, “the goal of aging is not to as such to defer dying but

to live old age well.”112

Daniel Callahan, founder and director of the Hasting Center, proposed that “medicine

107

KELLY, supra note 59, at 143. 108

Id; see Sabriya Rice, Are you taking too many meds?, CNN (May 31, 2011, 10:22 AM) http://www.cnn.com/

2011/HEALTH/05/31/med.nation.too.many.meds/index.html?iref=allsearch. See, e.g., Interview with Alan Shapiro,

Medical Doctor, in Portsmouth, Va. (Oct. 29, 2010). Dr. Shapiro advocates that an attitude readjustment is

necessary for real health care reform whereby people acknowledge that no one gets out of this world alive. Id. By

accepting our own mortality, Dr. Shapiro says, we will be less inclined to defer death when it arrives. Id. Thus, the

incredible amount of money spent on treatments to unsuccessfully defy death could be shifted to care for the elderly

at the end of life through hospice and to those who could be successfully treated. Id. 109

GILBERT MEILAENDER, BIOETHICS: A PRIMER FOR CHRISTIANS 68 (2005). 110

Kelly, supra note 59, at 145. 111

But see DeBolt, supra note 36, at 131–32. 112

KELLY, supra note 59, at 147.

19

should not be used for the further extension of the life of the aged, but only for the full

achievement of a natural and fitting life span and thereafter for the relief of suffering.”113

Callahan goes beyond the concept of age to discuss a “biographically full” life, which is what

medicine should aim to facilitate.114

Thus, age itself is not the determining factor but rather the

consideration is whether a person has led a full life and is simply trying to defy death by

continuing medical treatment.115

The differentiating factor in this approach, which makes it

ethical, is that it does not assign numerical values to a human life or establish a cutoff point by

age.116

Rather, ones “biographical life” is considered and medical treatment is never denied

except when it would be futile at the end of one’s well-lived life.117

Additionally, age is not

discriminatory because everyone has a chance of growing old.118

Therefore, “age is a morally

relevant basis for restriction, not of life-enhancing treatments, but of life-extending

treatments.”119

Under this approach, resources would be shifted from extraordinary measures at

the end of the life of the elderly to benefit others who would more likely experience a successful

outcome from treatment. This approach is highly individualistic and requires the senior to make

a choice when he believes that certain treatments are no longer necessary with the understanding

that his decision to go without will enable others to partake of the same treatment.

III. CREATIVE SOLUTIONS

Perhaps what the problem needs is creative solutions instead of academic theories. In

light of the fact that the numerous theories individually fail to provide a complete solution to the

113

Id. at 148. 114

Id. 115

Id. 116

Id. 117

Id. 118

Id. 119

Id. at 150.

20

problem that seniors face in accessing their prescription medications, it is necessary to

acknowledge that some combination of the theories coupled with creative solutions employed by

non-governmental actors are required to provide relief to seniors.

A. Individual Responsibility

One creative solution is to empower the individual patient to make informed decision

about his or her medications. In addition to serious contemplation about whether a specific drug

is necessary or even helpful, the individual may switch to generic medications if they are

available on his or her own initiative. All a senior has to do is ask his or her pharmacist whether

a generic version of the prescription is available and the pharmacist can switch the drug without

a physician’s approval.120

While generics are not available for medications that are covered by a

patent, particularly biological drug products,121

many pharmaceutical companies offer assistance

for low-income individuals.122

Most likely, a generic is available and will “constitute as much as

120

Barbara Mannino, How to Control the Cost of Prescription Drugs, FOXBUSINESS (Oct. 17, 2011) http://www.

foxbusiness.com/personal-finance/2011/10/17/how-to-control-cost-prescription-drugs. 121

Bruce Patsner, Marketing Approval versus Cost of New Medical Technologies in the Era of Comparative

Effectiveness: CMS, not FDA, Will Be the Primary Player, 3 J. HEALTH & LIFE SCI. L., no. 3, 2010 at 38, 54–55.

On the biologics side, FDA efforts to curb the costs of super-expensive biotechnology drugs by

allowing generic drugs on the market have consistently run into the apparently impenetrable wall

of intellectual property law. As a rule, the FDA has championed the development and availability

of generic versions of patented prescription drugs. This roadblock to potential efforts at cost

control, again, is not the FDA's fault. The most commonly raised argument against widespread

availability of generic versions of prescription drugs is that the availability of such drugs either

will stifle or destroy innovation, even though there is no substantive evidence of this.

A second argument unique to biological drug products--that such complex molecules are difficult

to impossible to copy exactly, given the state of current technology--is correct. If one accepts this

argument, it could eliminate the possibility of any generic versions of some of the most expensive

blockbuster biological drug products for decades. Given this possibility and the high cost of these

biologics, there is serious debate about how much patent protection these manufacturers deserve,

and whether government entitlement programs, such as Medicare, can afford them in the long run.

In fairness to the FDA, many complex biological drug products now under such scrutiny did not

even exist in 1984 when the Hatch Waxman Act was passed to facilitate the approval of lower-

cost generic versions of patented drugs. In discussions with Congress, manufacturers have

insisted on at least twelve years of patent exclusivity, likely as a concession to healthcare

reformers in Congress who have insisted on five years. Id.

122 Mannino, supra note 120.

21

an 80% savings in retail costs.”123

Collectively, American consumers choosing generic

medications over name brand versions save more than $3 billion dollars per week.124

Seniors should also shop around for the pharmacy that will offer the best price. Some

stores like Wal-Mart, Kmart, Target, Sam’s Club, Walgreens and CVS offer discount programs

on generic prescriptions for customers.125

The price could be as low as $10 dollars for a ninety-

day supply of certain generic medications.126

Independent pharmacies are often able to offer the

lowest prices.127

Seniors are often able to find lower prices for their medications by simply

shopping around. With a little more information and personal responsibility seniors will be able

to control their own decisions about what is medically necessary and how to get the best price for

their prescriptions. Individual responsibility is a simple but creative way to diminish the

problem.

B. Corporate Humanity

Another creative solution is for businesses to adopt missions focusing on medical ethics

with the good of the patient in mind. This would enable the business to have better relationships

with their customers and, at the same time, experience financial success. For example, Sentara’s

“Mission: Health” program offered $500 reduction in premiums to those participants who were

in good health and an additional $460 to those participants with chronic illness that worked with

a health coach to coordinate medication, exercise, and check-ups.128

Sentara’s customers are

happier because they have received money back for maintaining good health.129

Additionally,

123

Id. 124

Id. 125

Id. See, e.g., WALMART, http://health.walmart.com/health-information/rxplan-humana-enroll (last visited Nov.

30, 2011). 126

Mannino, supra note 120. 127

Id. 128

Heart Disease Weakly, Employee Healthcare Just Got Less Expensive: Sentara Healthcare Saves $3.4 Million &

Improves Employee Health, Nov. 7, 2010, available at http://www.highbeam.com/doc/1G1-241016433.html. 129

Id.

22

the program saved Sentara money by having healthier clients!130

While this example is not

specific to the context of prescription drugs, it shows a positive outcome when businesses and

patients work together to help resolve the problem of access to insurance, medical care, and

prescription drugs.

Good press, happy customers, and financial success follow when health insurance or

pharmaceutical companies adhere to ethical standards over a principal profit motive.131

If a

company establishes and maintains a medically focused mission, they are often able to keep

profits up while helping those in need. For example, the pharmaceutical companies Amgen132

and Pfizer133

offer support and reduced rates for low-income individuals who need medication

but cannot afford to pay the entire deductible or cost. Also, Merck, a pharmaceutical company,

has a mission statement that drives their business decisions which reads, “We never try to forget

that medicine is for the people. It is not for the profits. The profits follow, and if we have

remembered that, they have never failed to appear. The better we have remembered it, the larger

they have been.”134

Merck faced a difficult decision in the mid-1990s when a company scientist

discovered that a drug sold by Merck to treat parasites in animals could be adapted to cure the

disease of River Blindness that plagued impoverished nations.135

This excruciating disease is

caused by a parasite that grows up to two feet long in the host person eventually reaching the

eyes and causing blindness.136

Those sick with this disease would often choose suicide rather

130

Id. 131

See Id. 132

Amgen: Our Mission and Values, AMGEN, http://www.amgen.com/about/mission _values.html (last visited Nov.

18, 2010) (providing the mission statement: “serve patients by transforming the promise of science and

biotechnology into therapies”). 133

Pfizer: Who We Are, What We Stand For, PFIZER, http://www.pfizer.com/about/ (last visited Nov. 18, 2010)

(providing the mission statement: “we strive to provide access to safe, effective, and affordable medicines…to

people who need them”). 134

Rae, supra note 84, at 106–07. 135

Id. 136

Id.

23

than continue in the agony caused by the parasite.137

While Merck could make the cure, it faced

the decision whether to develop and produce the cure when none of their potential beneficiaries

could afford to pay.138

Ultimately, Merck decided to live out its mission and spend roughly $20

million each year to produce and distribute the cure to those in need.139

If an ethical norm governed the approach to solving the problem of access to prescription

drugs, more insurance and drug companies would conduct business like Merck, Pfizer, and

Amgen. Businesses would acknowledge the human element over the profit factor when

engaging in a sector like medicine that has the potential to affect life and death. Medical and

pharmaceutical companies fundamentally impact human quality of life with their products. If

pharmaceutical companies acknowledged their ethical obligations, then most seniors would be

content with private industry controlling the medical sector through economic factors tempered

by human ethics.

IV. CONCLUSION

If healthcare businesses adopt an ethical focus and seniors are empowered to champion

their own medical choices, then there would be much less dissatisfaction with the health care

system. Perhaps, America could avoid universal prescription drugs provided by the government

if businesses developed their ethics and seniors rose to the challenge of owning their medical

destinies. A difficult problem cannot be solved by throwing money at is, but rather demands

creative solutions. The American people have always been innovative when left to their own

devices. Perhaps “we the people” should attempt a creative solution.

137 Id. 138

Id. 139

Id.