Of Doughnuts and Bagels and Real Sacrifice

From 2001-2002, I was fortunate to spend a year in Washington, D.C., as a legislative fellow, primarily helping out on the Democratic Caucus Medicare Prescription drug legislation (which failed to garner sufficient votes on the floor of the Senate). One of the frustrating outcomes of that year was the eventual (one year later) passage of a benefit with a rather large "doughnut hole." During the 2002 floor debate, one Senator likened the (then current Republican, or "tripartisan") benefit to a bagel with a very small hole. But that belied the fact that there was essentially no meaningful financial assistance for a large chunk of prescription drug spending, among those with relatively high prescription drug costs, representing a significant minority of the beneficiaries. From a clinical standpoint, this ran counter to good practice, discouraging compliance with necessary prescription drugs and potentially foiling their long-term benefits.

Seeing this "doughnut hole" disappear or even shrink is surely a good thing. However, it is not clear that the nominal financial sacrifice ($80 billion over ten years?) is what it seems. For the pharmaceutical industry, the compromise on pricing likely yields a larger marginal profit than the alternative. If this means that there are no more "sacrifices" to be made from the pioneer drug industry, I fear that real, cost-containing reform will be more difficult to achieve than popularly acknowledged. We will not find physicians, hospitals, nor medical device manufacturers (among other groups) ready to make the necessary sacrifices if the pharmaceutical industry can obtain a market expansion in the guise of cost-savings.

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Howard Forman

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Of Doughnuts and Bagels and Real Sacrifice