Health Affairs

Posting date: July 21, 2004

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Health Affairs, 10.1377/hlthaff.w4.396
Copyright © 2004 by Project HOPE

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MarketWatch: Doughnut Holes And Price Controls

Gerard F. Anderson ^1*, Dennis G. Shea ², Peter S. Hussey ³, Salomeh Keyhani ⁴, Laurie Zephyrin ⁵

¹ Gerard Anderson is a professor at the Bloomberg School of Public Health at the Johns Hopkins University in Baltimore, Maryland.
² Dennis Shea is a professor at Pennsylvania State University in University Park.
³ Peter Hussey is a doctoral candidate at Johns Hopkins.
⁴ Salomeh Keyhani is a fellow in the Robert Wood Johnson Clinical Scholars Program at Johns Hopkins.
⁵ Laurie Zephyrin is a fellow in the Robert Wood Johnson Clinical Scholars Program at Johns Hopkins.

^*Corresponding author.

Abstract

In 2003 citizens of Canada, the United Kingdom, and France paid an average of 34-59 percent of what Americans paid for a similar market basket of pharmaceuticals. If the Medicare program were to pay comparable prices for pharmaceuticals, it would be possible to eliminate the "doughnut hole" in its prescription drug benefit and keep Medicare drug spending within the overall limits established by Congress. This provides Congress with a clear choice: reduce the level of cost sharing and improve beneficiaries’ access to pharmaceuticals, or allow the pharmaceutical industry to use the higher prices to fund research and development and to engage in other activities.

Key Words: Access To Care, Business Of Health, Consumer Issues, Health Reform, International Issues, Medicare, Pharmaceuticals, Health Spending

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