Vol. LVIII No. 1

The Cost of High Prices: Embedding an Ethic of Expense into the Standard of Care

Abstract: In the midst of rapid and radical change of America’s health care system, the country’s crown jewel public health insurance program, Medicare, faces an intensifying cost crisis due to a past of uncontrolled prices and a future of booming enrollment. A cost challenge garnering particular media attention is pharmaceutical drug pricing for Medicare Part B. Historically, congressional action has hamstrung Medicare’s ability to limit costs, and as a result, the program is increasingly forced to pass on drug costs—through copays and coinsurance—to its elderly beneficiaries. Public outrage has followed recent stories of pharmaceutical companies seeking to increase their prices, and policymakers have called for increased regulation. Nevertheless, there may be better solutions to Medicare’s pharmaceutical drug cost crisis. Recognition of “financial toxicity”—the effect of a pharmaceutical drug’s price on the mortality of the patient undergoing treatment—provides a potential new foothold for health care regulation. Like other side effects, if the price of a pharmaceutical drug negatively impacts rates of survival, then the cost of the drug could be an important component of clinical decision making and, presumably, the standard of care. Linking the cost of a drug to its clinical efficacy could dramatically impact which drugs providers choose, giving Medicare a new tool in its efforts to become a better gatekeeper of the public fisc without relying on bureaucratic hard power or legal enforcement. Using the burgeoning field of new governance, this Article focuses on how law and policy could shift to reflect the new understanding of financial toxicity. Arguing that the phenomenon finally provides a connection between cost and quality, this Article examines the instantiation of cost within the ethic of care. This route may provide an opening for a limitation on the ever-increasing price of pharmaceutical drugs and provide a powerful, yet unarticulated, legal signal that drugs that cost too much negatively impact the quality of care that American patients receive.

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