Viagra: A Success Story for Rationing?
from Health Affairs
Typology of National Rationing Strategies
In this section we set out the various strategies for rationing Viagra adopted in the countries we studied. However, before doing so, we need to put the specific case of Viagra into the wider context of health care rationing more generally, to see whether it conforms to a standard pattern or has any special features.[7]Forms of Rationing Rationing — decisions to deliver less than the optimum amount of effective health care as a result of setting priorities among competing demands on the system — pervades across all health care systems, regardless of spending levels. It takes many forms, of which the explicit denial of a service is the most dramatic but not necessarily the most important. Other forms of rationing are exclusion (sections of the population not covered), dilution (fewer tests ordered, fewer nurses on the ward), deterrence (making access to care difficult), and delay (waiting lists). But not only do the forms of rationing differ. So, too, does the decision-making mode involved. Thus, decisions can be either made centrally or diffused among the professional service deliverers. Similarly, they can be made either explicitly (setting out the criteria for allocating resources to individual patients) or implicitly (fixing global budgets that force choice between competing demands on resources at the point of delivery). Generally speaking, diffused and implicit rationing by professionals has been the dominant mode cross-nationally, a strategy that diffuses not only responsibility but also blame. Presenting decisions about whom to treat and in what way as reflecting professional judgments and scientific evidence, rather than budgetary limitations, is clearly in the interests of politicians and insurance managers. It also may be a rational approach, given uncertainty about which medical intervention works for whom.[8] Various attempts have been made to devise limited menus of entitlements with explicit exclusions; Oregon's Medicaid waiver is the best-known example. But these have invariably run into trouble.[9] Not only has there been menu creep (a combination of consumer pressure and professional ingenuity in reclassifying conditions has meant that the menu of services tends to be elastic), but also attempts to exclude specific interventions immediately raise the objection that almost every procedure or drug can be medically necessary for someone. Even cosmetic surgery, a standard item in most exclusion lists, may be crucial for someone contemplating a future career as a ballet dancer, for example. So explicit exclusion policies quickly develop holes as exceptions are allowed, as the case of Viagra illustrates. In many respects, the case of Viagra follows the standard rationing pattern. When the drug was first launched worldwide, the over-whelming, although not entirely unanimous, response of decisionmakers was to exclude it from the reimbursable health care menu. Subsequently, however, policies have been modified to accommodate arguments of medical necessity. Total bans in practice turned out to be leaking colanders. However, it was mainly at this stage that differences in rationing modes emerged between countries. For the sake of simplicity, we present these differences as four models derived from the experience of specific countries. These, we must stress, are very much "ideal-type models"; that is, in practice there are overlaps between countries and modes, if only at the edges. However, they provide a useful analytic framework for analyzing policy responses across nations.Diffusion by Inaction As so often in comparative health policy studies, the United States emerges as an outlier, unique unto itself. A nonsystem made a nondecision about Viagra. Absent a national decision, even U.S. federal programs adopted divergent positions. The Department of Veterans Affairs (VA) refused to add Viagra to its formulary on the grounds that the costs of providing the drug would add 20 percent to its pharmaceutical budget (although the ban was not complete; an escape clause allowed doctors to argue for its prescription as exceptions).[10] In contrast, the Medicaid program automatically included Viagra for the treatment of ED following its approval by the Food and Drug Administration (FDA), as required by legislation, although the agency feared clinical and financial abuse.[11] Of course, the financial implications of this were relatively modest compared with those faced by the VA health system, given that only about 10 percent of Medicaid beneficiaries are adult males. In any case, the decision was variously implemented by the states. Some resisted out-right (among them, NewYork, Wisconsin, and Nevada).[12] Others followed the recommendations of the Centers for Medicare and Medicaid Services (CMS) designed to minimize misuse and rationed the amount prescribed: from four pills per month (for example, in Alabama and Florida) to ten (in Utah).[13] Health insurers and plans showed a similarly mixed picture. A very few plans included Viagra in their formulary from the start; one such was Tufts, which put it in its highest copayment category.[14] The great majority resisted. "Simply put, having sexual relations is not a medical necessity," one Aetna official argued to the New York Department of Insurance. However, under the challenge of both court rulings and state regulators, many of the insurers were forced to abandon or modify the blanket exclusion of Viagra.[15] Overall, then, the consequence is that access to reimbursable Viagra prescriptions for American men—the conditions under which it is prescribed, the number of pills deemed appropriate, and the level of copayments—depends on where they live and with whom they are insured. In this respect, of course, Viagra does not represent so much a deviant case as an illustration of the U.S. health care condition.Juridification Although Germany's health care system could not be more different from that of the United States, there is one shared characteristic: The courts have played a major role in shaping decisions. Germany's system is based on social insurance—that is, a network of sickness funds—and it has a corporatist style of governance. Within the broad framework set by the federal government, policy decisions are negotiated by the representatives of the medical profession and the sickness funds—the Bundesausschuss der Ärzte und Krankenkassen. It was this body that decided that Viagra should not be included in the standard package of reimbursable drugs. However, the decision was appealed. The Federal Social Court decided that the Bundesausschuss did not have the constitutional right to issue an unconditional ban on any drug.[16] This left matters in limbo, and the court has yet to give a more detailed ruling about the specific issues raised by the case of Viagra and other "lifestyle" drugs. At first eager to secure such a ruling, the insurers have stopped pressing for a decision, fearing that the Federal Social Court would take its cue from the lower courts, which have consistently ruled in favor of patients appealing against refusals to reimburse Viagra.[17] In a series of cases, the lower courts have decided in favor of reimbursing the cost of Viagra prescriptions wholly or partially. Among successful arguments have been that patients should be reimbursed when ED is the consequence of medical intervention or condition (for example, a bladder cancer operation, dialysis and kidney transplantation, diabetes, or multiple sclerosis) and when ED causes depression and psychosocial problems. In one case, the court sought to draw a distinction—central to the debate about lifestyle drugs—between using Viagra to enhance potency and prescribing it for the restitution of normal bodily function. Only in the latter case, the court determined, should Viagra be reimbursable (although normal may not be simple to define). "Intact erectile function is part of the image of a healthy man, including the elderly," the Hanover Social Court ruled.[18] These individual, case-by-case decisions have not been generalized into any kind of applicable guidelines. Rationing in Germany continues to take the form of scattergun juridical decisions. Indeed, muddling through is in the interests of the insurers; if the Federal Social Court were to generalize the generosity of the lower courts, the result would be much more expenditure. For the time being, the original ruling of the Bundesausschuss therefore determines the policy of insurers—that is, no reimbursement, absent a specific court decision. For the longer term, it is worth noting that sickness funds and physicians share a common interest in limiting demands on their collective drug budgets: If individual physicians are overly generous in prescribing Viagra or any other lifestyle drugs, they not only limit the resources available to their colleagues but can be held personally responsible for the cost. Whether this shared interest in self-restraint will survive if the government implements its decision to remove the cap on the drug budget is another matter.Centralization-Politicization In contrast to both the United States and Germany, policy in Britain for rationing Viagra in the National Health Service (NHS) was centrally determined by government ministers. Given the highly centralized nature of the NHS, this might at first appear to be a highly predictable outcome—an illustration of path dependency. In fact, this would be a misleading conclusion. The paradox of the NHS is that rationing has always been implicit. Traditionally, ministers have set budgets but have allowed the medical profession to translate financial constraints into clinical decisions—a highly effective blame-diffusion strategy.[19] The oddity of the decision about Viagra was thus that it represented not so much the logic of the NHS as a new departure. It was a reluctant departure. The first instinct of ministers was to depoliticize the issue by asking for expert advice.[20] But the Government's Standing Medical Advisory Committee refused to oblige. It concluded that there was no medical reason for refusing to make Viagra available by prescription in the NHS—"in common with many treatments available under the NHS this improves quality of life, but does not save or prolong it"—but that it was for ministers to make the final decision in light of the "availability of resources." The decision of the secretary of state for health was that since "impotence is in itself neither life threatening, nor does it cause physical pain," and since Viagra threatened to increase the cost of treating impotence tenfold, general practitioners (GPs) would be restricted in their ability to issue NHS prescriptions for Viagra. Availability would be limited to groups of men whose disabilities were linked to specific medical conditions: for example, those treated for prostate cancer or kidney failure and those suffering from Parkinson's disease and multiple sclerosis (MS). The official ration, furthermore, was to be one tablet a week. Exceptional cases not falling into the official categories would be referred to hospital specialists. The logic of this decision was far from self-evident, as the leader of Britain's GPs was quick to point out: Its only justification appeared to be that it promised to constrain demand and spending.[21] Also, in apparently limiting the NHS's treatment responsibilities to dealing with conditions that either threatened life or caused physical pain, the secretary of state appeared to be expounding a new restrictive, unsustainable doctrine. However, subsequent correspondence in the British Medical Journal suggested general support among doctors for rationing Viagra: "Nobody needs an erection at public expense" was the heading of one letter.[22] Furthermore, British GPs have a shared interest with government in controlling demands. The creation of Primary Care Trusts, with responsibility for purchasing health care for given populations, has given them responsibility for controlling their own (capped) drug budgets.Bureaucratization Sweden is an interesting, because exceptional, case of a policy reversal. Although in many respects a first cousin to Britain's NHS—inasmuch as it is funded through taxes—Sweden's health care system is a far more decentralized one. County councils are responsible for running health care services and, since January 1998, for pharmaceutical budgets. However, decisions about drugs remain firmly national. As in Britain, policy is driven by the assumption that the same package of health care services should be available regardless of where people live. The result has been tension between the budget holders (the county councils) and the central decisionmakers. At the time of Viagra's launch on the market, the rule was that any pharmaceutical product accepted as a prescription drug in Sweden automatically had to be included in the drug benefit package. Accordingly, Viagra was included. However, conscious of the financial implications of automatically endorsing all new products and under pressure from the county councils, the Swedish government subsequently appointed a commission of inquiry. Its report, published in 2000, recommended that drugs be divided into two categories.[23] The first, involving treatment for disease and injury, would continue to be part of the standard package. The second, which included not only Viagra but also drugs for the treatment of obesity, smoking cessation, and hair loss, would be available only in exceptional circumstances. Detailed criteria were to be defined by a governmental committee, whose report was over-due at the time of this writing, to replace present procedures. At present, decisions are made case by case by the Ministry of Health, in consultation with the Medical Products Agency (MPA), the Läkemedelsverket, which is the regulatory agency for medical products. In effect, there is bureaucratic rationing. Applications have to be made by the individual patients concerned, with support from their doctors. In making the determinations, the criterion appears to be different from that used in Britain (and other countries). The emphasis is on the consequences of ED, not the cause or associated morbidities. Treatment is sanctioned in those exceptional cases where ED aggravates an existing condition. In practice, this means psychiatric conditions. The system appears to have been effective in containing demand and expenditure. By the end of 2001 there had been roughly 3,000 applications, of which fewer than 10 percent had been approved.[24] Given the low success rate, it is perhaps not surprising that the number of applications has been diminishing over time. A further deterrent may well be the lack of privacy: Under the Swedish system of open government, applications are in the public domain.Rationing by Expertise There is an emergent fifth model of rationing, relevant to the introduction of lifestyle drugs more generally, that overlaps with those already discussed but is worth noting. This is rationing by expertise. Since 1999 Britain has had the National Institute for Clinical Evidence (NICE), an agency charged with reviewing the evidence about new health technologies and producing guidelines about their use in the NHS. Had NICE been in existence in 1998, ministers would no doubt have referred the case of Viagra to it with a profound sense of relief. And, as noted above in the case of Sweden, bureaucratic rationing is seen as a temporary expedient until effective guidelines can be devised. In both instances, the hope is that rationing decisions can be depoliticized by invoking the expertise of a neutral, authoritative agency or committee. The experience of NICE so far suggests that this may be an overly optimistic view.[25] Many of NICE's decisions have proved controversial, and some have been modified following lobbying by the pharmaceutical industry or consumer groups representing patients with specific diseases. Although it is relatively easy to determine which interventions are effective, deciding on priorities within constrained budgets is a different matter. It is far from clear that the expertise of agencies such as NICE carries legitimacy in determining this much larger question.
This is a part of article Viagra: A Success Story for Rationing? Taken from "Male Erectile Disfunction" Information Blog
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