The Vicious Cycle of Price and Prescription

As the debate over how best to reform America’s broken health care system arrives once again in Congress, alarming news has arrived from California. Anthem Blue Cross, one of the state’s largest insurance providers, plans to hike premiums by an astounding 35 percent next year. The given reason? Because Anthem forecasts that Californians will consume 30 percent more prescription drugs.

Now, as with any company’s justifications for its price increases, there is room for suspicion about Anthem’s projection. Other large insurance companies in the state, such as Blue Shield of California and Health Net, have forecast more modest increases in drug use closer to 20 percent. However, Molina Healthcare comes close to backing up Anthem’s assessment by forecasting a 28.6 percent rate. Who’s right? Who knows, but it’s far from implausible that Anthem could be right, and for reasons that should worry us at least as much as their proposed price hike.

The main reason Anthem could be right is simple: because drug companies have increasingly employed aggressive advertising techniques in arguably unprecedented ways. Consider, for example, the scandal that erupted in late May when consumers discovered that the popular television show General Hospital had written episodes that served as literal propaganda for rare drugs manufactured by niche pharmaceutical companies. Please note that such deference to pharmaceutical wishes is confined solely to the fictional medical community. Real doctors have been incensed for years at the oversaturation of pharmaceutical advertising, to the point where the American Medical Association (AMA) outright called for a ban on advertising prescription drugs.

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Real doctors have every right to be angry, and not just because of…