The State’s Dangerous Flirtation with Drug Rationing
Massachusetts may soon stop paying for some of the lifesaving medicines its poorest residents count on.
State officials recently requested permission from the federal government to restructure MassHealth, the state’s Medicaid program. If their waiver is approved, a small group of state bureaucrats will determine which drugs are off limits to the state’s 1.9 million Medicaid beneficiaries.
Many foreign countries tightly restrict which medications patients can take. Such rationing often proves fatal. Importing this system to Massachusetts would be a callous mistake.
The proposed waiver would change how MassHealth pays for prescription drugs. Three decades ago, Medicaid officials struck a grand bargain with pharmaceutical companies. Medicaid agreed to cover nearly all prescription drugs. In return, drug firms agreed to heavily discount all medications they sold to the program.
States administer their own Medicaid programs but receive significant federal support. The federal government picks up 50 to 80 percent of the overall tab; the lower a state’s per capita income, the higher the federal share. States are responsible for the remainder.
Massachusetts is a comparatively wealthy state. So it has to cover roughly 46 percent of the program’s cost.
That bill is expensive for the Bay State — especially since it took advantage of Obamacare’s expansion of the program to able-bodied, childless adults. The federal government covers 90 percent of this expansion population’s healthcare costs. That still leaves the state to pay for 10 percent — almost $400 million, as of 2015.
All told, Massachusetts will spend about $8 billion on MassHealth this fiscal year. That’s 24 percent of the state budget.
State officials would love to lower that tab. That’s where the new waiver comes in. It would switch MassHealth to a “closed formulary” system. The state would create a list of covered drugs. By threatening to leave certain medicines off the list, officials hope to gain negotiating leverage and obtain even bigger discounts from drug companies.
That may be good news for state bureaucrats. But if beneficiaries need drugs that aren’t included in the formulary, they’ll have to pay for them themselves.
That’s a virtual impossibility. Medicaid beneficiaries are by definition very low-income, earning less than 138 percent of the poverty level, or just over $16,000 for an individual. Leaving a medicine off the formulary essentially guarantees they won’t be able to gain access to it.
Other countries with government-run, single-payer health systems routinely use closed formularies to control costs. Patients suffer the consequences of such rationing.
The United Kingdom’s National Health Service, for example, imposes access restrictions on 20 percent of all medicines.
Consider the plight of the 3.5 million Britons who experience fertility problems. The national service’s advisory body recommends patients receive three rounds of in-vitro fertilization drugs before doctors give up hope.
But to save money, the service’s facilities recently began limiting couples to just one round. Some overweight women are barred entirely, according to The Mirror, a British newspaper.
The story is similar for cancer patients. Last fall, National Health Service bureaucrats refused to cover fulvestrant, a treatment proven to stall breast cancer. About 1,200 women in the United Kingdom could benefit from the drug each year. Many will die without it.
Drug rationing is also common in Canada’s single-payer system. Last year, several Canadian hospitals restricted access to sodium bicarbonate, a drug widely used in heart and cancer surgeries.
If Massachusetts follows the examples of the United Kingdom and Canada by rationing drugs, the state’s most vulnerable residents will lose access to lifesaving medications.
That will result in worse health outcomes, needless suffering, and — for many — death.