Posting date: July 21, 2004

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Health Affairs, 10.1377/hlthaff.w4.405
Copyright © 2004 by Project HOPE

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From The Field: Closing The Doughnut Hole: No Easy Answers

¹ Patricia Danzon is the Celia Moh Professor, Wharton School, University of Pennsylvania, in Philadelphia.

^*Corresponding author.

Abstract

The price differentials reported by Gerard Anderson and colleagues are not fully representative and are probably biased upward. If Congress does seek to reduce drug prices, there are no simple, effective, and efficient strategies. The most likely is drug importation, which would be ineffective at lowering U.S. drug costs and would pose sizable safety risks, yet it would reduce research and development (R&D) costs and access for foreign consumers. Careful cost-effectiveness analysis would be more appropriate than trying to import other countries’ price controls. Income-related subsidies are a better strategy for dealing with excessive cost sharing for low-income seniors.

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

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