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Viagra: A Success Story For Rationing?

The 1998 launch of Viagra prompted widespread fears about the budgetary consequences for insurers and governments, all the more so since Viagra was only the first of a new wave of so-called lifestyle drugs. The fears have turned out to be greatly exaggerated. This paper analyzes the rationing strategies adopted in four countries (United States, Britain, Germany, and Sweden), relates them to the characteristics of different types of health care systems, and identifies the conditions necessary for successful cost containment. The case of Viagra, it concludes, holds out two general lessons: first, allow exceptions to total bans on reimbursement; second, involve the medical profession in the decision-making process.

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