A medical economic fairy tale: Jack, the magic beans, Medicare and the US FDA.

The US Medicare programme, through its new Part D programme, now offers limited coverage for prescription medicines. The coverage is provided via a variety of drug plans and their respective formularies. The federal regulatory scheme generally requires that the formularies contain drugs representative of the various therapeutic classes. On the other hand, the federal government has generally refrained from making specific decisions that specific drug entities are the most cost effective and therefore must be included in the formularies. With the dawn of Medicare Part D in the US, the federal government will be increasingly involved in supporting the cost of medicines, and will need to confront this challenge in the face of tight overall economic constraints on the federal budget. Any spending on medications of questionable efficacy will inevitably compromise the ability to deliver more cost-effective healthcare measures. Laxity in the approval process for ineffective drugs may therefore result in lack of funds to support acquisition of more useful medicines for the elderly.