Remove Medicare's straitjacket

Now that the budget "sequester" is in effect, Congress is shifting its attention to entitlement reform. There's simply no way to achieve long-term reductions in federal spending without touching the big health programs, particularly Medicare. Although raising the age of Medicare eligibility from 65 to 67 appears off the table, at least for now, the budget plan that Rep. Paul D. Ryan (R-Wis.) is proposing would shift a greater share of the program's growing costs to beneficiaries in the years to come.

The bipartisan deal that kept the federal government from hurtling over the "fiscal cliff" on Jan. 2 actually increased Medicare spending. At the last minute, a powerful bipartisan group of senators inserted a provision into the bill that blocked Medicare, for two years, from getting a better price on an expensive drug used by kidney dialysis patients. This was in addition to a previous two-year extension obtained by Amgen, the drug's manufacturer. The move saddled Medicare with roughly $500 million in added costs over the next two years and generated a windfall for Amgen.

This is but one example of how Congress publicly criticizes growth of Medicare costs while privately restraining the Centers for Medicare and Medicaid Services, or CMS, from getting a better deal for Medicare patients and U.S. taxpayers.

Here's another. Genentech, another big pharmaceutical company, makes an anti-cancer drug called Avastin. It also makes Lucentis, a closely related drug that is used to treat macular degeneration. Both drugs work equally well for macular degeneration, but Lucentis, which is FDA approved for this condition, costs $2,000 a dose compared with $50 for the same amount of Avastin. The FDA can't approve Avastin for macular degeneration unless the company requests it, and Genentech has no financial interest in doing so. This leaves Medicare with no choice but to pay top dollar for Lucentis. Other than to save their patients money, doctors have no incentive to prescribe Avastin, even though they can do so "off label." The difference in price costs Medicare, and taxpayers, hundreds of millions of dollars a year.

http://www.latimes.com/news/opinion/commentary/la-oe-kellermann-medicare-drug-costs-20130329,0,6694807.story