Current U.S. Healthcare Policies, Essay Example

The current health insurance mosaic of different providers is the fundamental issue underpinning accessibility of (highly priced) cancer drugs.  Drug companies produce such drugs because it is able to practice price discrimination via different consumers: some private health insurance companies will pay a premium to protect patients; government users may pay less but can be offset by higher private margins.  The government insurance program is broken down into two components: 1) Medicaid; 2) Medicare.  Many Medicaid recipients do not have access to these drugs (although coverage rules vary by state)- this is mainly because state governments are not willing to cover the financial price of such treatments.  Medicare, on the other hand, announced in July 2011 that the government would cover two of the drugs in question: Avastin from Genentech for breast cancer and Provenge from Dendreon for prostate cancer (Pollack, July 30, 2011).

While Medicare has decided to cover the cost of these drugs, at least for the time being, it is not clear whether this will be a long-term policy.  The decision, perhaps, was predicated on the appearance that the insurance program would not engage in “rationing”, although such rationing occurs in any case.

References

Pollack, A.  (July 30, 2011). Medicare will continue to cover 2 expensive cancer drugs.  New York Times.  Available at: http://www.nytimes.com/2011/07/01/business/01drug.html?_r=1&hpw.

Epstein, R.  (August 30, 2011). The perils of price controls.  Hoover Institution Defining Ideas.  Available at: http://www.hoover.org/publications/defining-ideas/article/91011