• Louise B Russell and Nancy Wolff.
• Institute for Health, Health Care Policy, and Aging Research, Rutgers University, New Brunswick, New Jersey 08901, USA. lrussell@rci.rutgers.edu
• Am J Prev Med. 2002 Apr 1; 22 (3): 151-5.

BackgroundPrices for prescription drugs vary widely in the United States, from the prices charged by retail pharmacies to 50% below average wholesale prices (AWP), depending on the purchaser's bargaining power. At higher drug prices, expenditures for essential preventive interventions, such as those aimed at hypertension and hypercholesterolemia, buy less health for the elderly. The magnitude of this effect, however, is unknown.MethodsCost-effectiveness analyses of drug interventions, which estimate their health effects and costs, sometimes include analyses of the impact of drug prices. We use results from studies of preventive drugs used by the elderly to calculate the life-years that could be purchased for $1 million of expenditure at the AWP, and at prices 20% and 40% below the AWP. This range reflects the range of prices in the United States today.ResultsDrug prices have a substantial effect on the amount of health that can be purchased for $1 million, especially among elderly people with several health conditions. For example, at 40% below the AWP, $1 million spent on statins yields 90 years of life for patients aged 75 to 84 with a history of myocardial infarction. At the AWP, the number of life-years for $1 million drops to 48--a loss of 42 life-years.ConclusionsA Medicare drug benefit program that supports prices at the high end of the current range could yield substantially less health for the elderly, and one that promotes differential pricing could promote unequal access to preventive medications--and thus to health--by Medicare beneficiaries across the country.

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