Nexium is a parable of what's wrong with health care.
Along with so many other things, keeping a lid on spending seems to have gotten lost in the health care overhaul. Individuals lose some incentive to save a couple of bucks by having fewer tax-free dollars in their health savings accounts. A panel to oversee Medicare disbursements based on the cost of clinical effectiveness of treatments--zapped, thanks to intense lobbying by drugmakers, doctors and every other medical interest group. That leaves medical providers and health plans, which have little motivation, unless the employers who buy insurance turn the screws.
They rarely do. But Edward Kaplan, a New York City health care consultant, last year came up with a simple way to save a pile of money for a Boston union representing supermarket workers: Its medical plan stopped covering Nexium, saving $133,000. The heartburn medicine is a $5 billion blockbuster for its manufacturer, AstraZeneca ( AZN - news - people ). At $2,000 for a year's supply, it was the union plan's second-most-prescribed pill, accounting for 5% of all drug costs. But its active molecule is almost identical to the one you get in cheap over-the-counter versions of Prilosec.
Prescription drug spending is maybe 10% of the total health pie--$234 billion in 2008--and rising at 3% a year. Still, "cutting Nexium saved a big chunk," Kaplan says.
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