Molecular medicine, the Medicare drug benefit, and the need for cost control

The implementation of Medicare Part D, although successful in improving access to prescription drugs for millions of beneficiaries, will lead to a marked escalation in the cost of the Medicare program. An important component of the rise in costs will be specialty pharmaceuticals, including a group of drugs that are self-administered and that cost at least 1,000 dollars/month. The rate of growth in expenditures on specialty pharmaceuticals has been 34% per year. Although all these drugs confer benefits, the degree of benefit varies from dramatic (e.g., imatinib for chronic myelogenous leukemia) to cost-effective (e.g., tumor necrosis factor-alpha blockers for rheumatoid arthritis) to more modest (e.g., disease-modifying drugs used in multiple sclerosis). Historically, when costs within the Medicare program have risen, Congress has enacted price controls, as it did with hospitalization, physician services, and outpatient care. The Medicare Modernization Act (MMA) currently prohibits such an approach. Resorting instead to competition from generic drugs will be of little utility, because there is currently no mechanism to allow biogeneric drugs and patents in the biopharmaceutical industry to limit competition. Controlling the cost of the Medicare Part D program, as dramatically illustrated by the case of specialty pharmaceuticals, will require patent reform, giving the Food and Drug Administration jurisdiction over biogenerics, and amending the MMA to allow the Centers for Medicare and Medicaid Services to institute price controls.