Canada may have National Health Care but they don’t Pay for all Life-Saving Drugs

Posted by PITHOCRATES - August 18th, 2012

Week in Review

You ever go to a microbrewery?  Where they will have numerous homebrewed beers to try?  Brew masters can create new flavors and tweak them until they find special ones people love.  And then they sell them.  Pretty simple.  Unlike bringing new life saving drugs to market.

Making new drugs is a costly endeavor.  It takes a lot of research.  A lot of pouring through data.  Studying how disease develops in the body.  Looking for things.  Thinking about things.  Hypothesizing about things.  Resulting in a proposed new drug.  Then experimentation.  Figuring out dosages.  Looking for side effects.  Adjusting chemical formulas.  The few promising ideas advance forward.  While the majority become discarded dead-ends.  After a lot of time human trials begin.  Where more times than not a brilliant idea fails to show a positive result.  And the drug is abandoned.  The tiny few that do show promise make it to the next level.  And eventually to FDA approval.  For some usages.  A new cancer drug may be approved for one or two types of cancer.  Providing a very limited market to recoup all those sunk costs.  So these new drugs carry high price tags.  Some drugs may receive FDA approval for other uses.  Some uses may lose their FDA approval as the drug may not show enough benefit to justify the cost.  Or the side effects.  Making it very difficult to recover costs on some drugs.  As well as funding new research and development on other drugs.

Developing new drugs is costly.  It takes enormous amounts of capital.  And time.  That someone has to pay for.  Even in countries with national health care systems.  Even in America under Obamacare.  For they may tax everyone to pay for health care.  But they must rely on others to make everything that’s good in those health care systems.  Especially those life-saving drugs (see Saint John man struggles to pay for cancer drug posted 8/13/2012 on CBC News).

A Saint John man and his family are struggling to figure out how they will pay for an expensive cancer drug that could prolong his life…

But the drug will cost $10,600 a month and it is not covered by the provincial government…

The couple appealed to the Department of Health for financial help to pay for the drug. But the provincial government also refused…

The New Brunswick government announced in 2009 that it would cover Avastin under the provincial drug program for people with metastatic colorectal cancer.

The Saint John man has a brain tumor.  While New Brunswick will authorize payment for Avastin for metastatic colorectal cancer it will not authorize payment for its use to treat brain tumors.  Because so far Avastin has not shown the same positive results in treating brain tumors that it has in treating metastatic colorectal cancer.  Provincial budgets are limited.  As they are at health insurance companies.  If they spend enormous amounts of money on treatments that offer a minimal chance of success they can’t spend that money on treatments that show far greater chances of success.  Meaning that overall more people will go without treatment.  And overall survival rates will fall.

There really is nothing more heart wrenching to know that there is a drug out there that may help but its cost puts it out of reach.  But it is important to understand what it took to get that drug to this level.  A drug company may have spent money developing it for 10 years or more before seeing a dime in revenue.  Contrary to popular belief, these drug companies aren’t evil corporations.  People work at these drug companies.  And as noble as it may be they can’t work without pay for 10 years.  Especially when a lot of their employees have PhDs with enormous student loan debt.  So the drug companies borrow a lot of money and take a lot of risks.  Even the successful ones that show fantastic profits can lose everything in one class-action lawsuit.

So there are great profits because there are great costs.  And great risks.  Which no one would take if there wasn’t a chance for great profits.  Which is why there is so much research and development at these drug companies.  Because we will reward the one that finds a cure for cancer with great profits.  Which is what we want.  Because we want their drugs.  The more they bring to market the better our treatment options.  And the more treatment options there are the quicker we’ll find those life saving-drugs.  That are so successful in treating patients that everyone will authorize payment for them.  Without worrying that doing so will cause other people to die.

Canada may have a national health care system but that doesn’t change this fact.  Nothing is free.  And taxpayers’ pockets just aren’t deep enough to provide the Utopian health care system people think of when they think of national health care.  It’s often not what people living outside these systems think they are.  They have real budgets.  Long waiting times.  Rationing of services.  And treatments.  As the Avastin drug clearly shows in Saint John.  And the more people a national system covers the worst it will be.  Because on top of everything else there will be a great health care bureaucracy pulling even more limited funds out of the health care system.  Where Obamacare will be the worst of them all.  Because of the advanced nations America has the greatest population of them all.  And will have the greatest number patients of them all.

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The UK’s NHS chooses Expensive Drug from US Drug Maker Merck because it’s Better than Anything they Have

Posted by PITHOCRATES - March 11th, 2012

Week in Review

What’s the difference between pre-Obamacare US health care and the UK’s National Health Service (NHS)?  Incentive.  In the US there is an incentive to pour billions of dollars into research and development.  To produce the next super drug.  Whereas in the UK drug companies only make as much as the government allows.  Or is willing to pay.  Creating a disincentive to pour billions of dollars into research and development.  Which is why the NHS’ new hepatitis C drug comes from the US (see Merck’s hepatitis C drug wins UK cost endorsement by Ben Hirschler posted 3/9/2012 on Reuters).

U.S. drug maker Merck & Co’s new hepatitis C drug Victrelis was recommended for use within Britain’s state health service on Friday, despite its hefty price tag.

Critics will say that we shouldn’t allow Merck to charge so much for their drug.  That it is wrong to profit off of disease.  That the US should stop this price gouging like they do in the UK.  So should we?  Well, to answer that question all you have to do is to consider who made this new hepatitis C drug.  And who was that?  The US, of course.  Because Merck COULD charge this much for their drug.  Which just goes to show you that when you want the best you’re better off relying on the profit system than altruism.  Because profits provide incentive to make the best.  While altruism doesn’t.

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