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Read Making a Killing

home / healthcare / in the media

San Francisco Chronicle
Jan 01, 1999

by Tom Abate

Agency Tells Kaiser that it Must Cover Viagra

The state Department of Corporations ordered Kaiser Foundation Health Plan yesterday to continue covering Viagra prescriptions, rejecting Kaiser's argument that subsidizing potency pills for some men would unfairly raise insurance costs for all members.

The ruling by the corporations commission, which regulates the state's health maintenance organizations, comes seven months after Kaiser asked the agency to let it drop the drug. The decision means the HMO must continue paying at least half of the roughly $80 it costs to provide a monthly dose of Viagra to men with "erectile dysfunction."

Kaiser spokesman Tom Debley said the HMO had no plans to contest the ruling, which he estimated would add about $1 (roughly 1 percent) to a monthly Kaiser premium.

Kaiser has made similar applications in every state in which it operates. So far, 12 have allowed it to drop Viagra. California yesterday became the third state after New York and Connecticut to require coverage of the drug. Kaiser still has a similar request pending in the state of Washington.

"Given the differences between the states, I think there's still an important disagreement over whether drugs like this should be covered," Debley said.


Although the mention of Viagra often arouses snickers, the potency pill has become the poster child in a debate over the role of prescription drugs as a factor in driving up health care premiums.

Insurers, and ultimately the large employers who pay most premiums, have labeled Viagra a "lifestyle drug," a remedy that does not save lives but merely enhances the quality of life. They say drug companies are coming out with many remedies of this sort, baldness treatments for instance, that do not treat life-threatening conditions and therefore should not be paid for out of the entire pool of insurance premiums.

Kaiser Permanente pediatrician Sharon Levine pointed that out in recent testimony supporting Kaiser's Viagra application. She said Kaiser's drug costs have risen 92 percent in a seven-year period, forcing the HMO to start making value judgments about which drugs to cover.


"We believe that the cost of drugs like Viagra have the ability to undermine the notion of comprehensive health coverage," Levine said.

But in a six-page opinion, state corporations commissioner Dale Bonner wrote: "While such concerns may indeed have merit, they have not been substantiated on the current record." Until the HMO could show proof that coverage of Viagra and other lifestyle drugs will pull the financial rug out from under Kaiser, "the more prudent decision is one that tips the balance in favor of access."

Kaiser's bid to drop Viagra coverage had been supported by employer groups, notably the San Francisco's Pacific Business Group on Health, which negotiates rates for many of Northern California's leading corporations.

Pat Powers, PBGH executive director, said "the broader issue is that Americans are accustomed to having every new technology and drug covered. We're reaching a point where as a society we have to start making value judgments" about about what should and should not be covered.


Consumer groups, like the Santa Monica's Consumers for Quality Care, had opposed Kaiser's bid to drop Viagra coverage, despite agreeing, in principle, that something must be done to check rising health care costs.

"I can't tell you where to draw the line," said consumer activist Jamie Court, "but I can tell you who should be drawing it -- government. Because if companies get to, coverage will shrink and shrink and the public will only lose."

Others pointed out that the health care system has always made value judgments about coverage of non-life-threatening conditions. Sean Tipton, spokesman for the American Society on Reproductive Medicine, said most health plans have routinely covered erectile dysfunction, but only a quarter of health plans offer some form of coverage for infertility in women.

Yesterday's ruling was the last official act of Bonner, a Governor Wilson appointee who leaves office Sunday. Six other California health plans, including Blue Cross, PacifiCare and HealthNet, have also requested permission to drop Viagra coverage. Decisions on those requests will be made by whoever Governor Gray Davis appoints corporations chief.

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