The NHS drops Life-Saving Drug as it would lead to more Rationing and longer Wait Times

Posted by PITHOCRATES - April 22nd, 2014

Week in Review

In 1954 almost 35% of all workers belonged to a union.  Since then that number has fallen to about 11.3%.  As the high cost of union contracts chased manufacturing out of the country.  Today the majority of workers belonging to a union work in the public sector.  Where they enter contract negotiations with the taxpayers to secure better pay and benefits than most taxpayers have.  Of course during these negotiations the taxpayers have no say.  As politicians and unions hammer out these contracts.  Unlike trade unions.  Where the people paying the workers actually have a say.

This is another reason why national health care is the Holy Grail for the left.  They want to unionize all those health care workers.  Pay them more.  And deduct union dues from their pay to fund their political activities.  Leaving less money for patient health care.  But they’re okay with that.  But they’re not okay with a pharmaceutical company charging a lot of money for life-saving drugs.  Which, also, leaves less money for patient health care (see Breast cancer drug turned down for NHS use due to high cost by Sarah Boseley posted 4/22/2014 on the guardian).

A Herceptin-style drug that can offer some women with advanced breast cancer nearly six months of extra life has been turned down for use in the NHS because of its high cost.

In draft guidance now open to consultation, the National Institute for Health and Care Excellence (Nice) blames the manufacturers, Roche, who are asking for more than £90,000 per patient, which is far more than any comparable treatment…

“We apply as much flexibility as we can in approving new treatments, but the reality is that given its price and what it offers to patients, it will displace more health benefit which the NHS could achieve in other ways, than it will offer to patients with breast cancer.”

Paying health care providers more will not improve the quality of health care.  Unless health workers are doing a half-assed job now.  Which I don’t believe they are.  But Roche is helping people with death sentences live another six months or so.  That’s a pretty remarkable thing.  If the NHS can’t afford this wonder drug perhaps they should use their own.  Of course they can’t.  Why?  Because they don’t have one.  For they didn’t pour hundreds of millions of dollars in developing this drug and the all those drugs that failed.

Developing a miracle drug is costly.  Money the pharmaceuticals pay up front.  Because their employees don’t work for free.  Which is why these drugs cost so much.  That high price pays for all of the costs that went into this drug.  For all of the drugs that failed.  And provides a return for investors.  Who give these pharmaceutical companies hundreds of millions of dollars up front just in the hope they may develop a miracle drug.  Which is the only way we should invest in these miracle drugs.  Because these investors will only take a chance on a good thing.  Unlike government.  Which has a history of backing the wrong investment time after time.  And pouring good money after bad.

It’s a tough choice to make.  Take health care benefits away from other patients to pay for a miracle drug for those dying from cancer.  Or let people die 6 months or so sooner.  One thing for sure, though, unionizing our health care workers won’t give either of these patients more health care benefits.  It will only leave less money for everything else.  Leading to rationing.  And longer wait times.  Because less money will pay for fewer things.  Making those other things scarcer.  Forcing people to wait longer and pay more for treatment.

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People attack Pharmaceuticals and can’t Understand why they Get Out of the Drug-Making Business

Posted by PITHOCRATES - April 21st, 2013

Week in Review

Everyone hates the pharmaceuticals.  Because they don’t make life-saving drugs cheap enough.  And they don’t bring them to market quickly enough.  But when people need a new antibiotic that can take on a superbug who do they come running to?  Those evil and vile pharmaceuticals.  And they beg them to do what no one else can.  Save lives by bringing new drugs to market.  Of course when they do rush a drug to market and it hurts some people then everyone hates the pharmaceuticals.  For not taking the time to make sure the drug was safe before rushing it to market.  Just to make a buck.

Pharmaceuticals just can’t win.  They’re damned if they do.  And damned if they don’t.  It’s a wonder any of them stay in the business (see Antibiotic progress on superbugs called ‘alarmingly slow’ posted 4/21/2013 on CBC News).

Both biological and economic factors hinder the development of new antibiotics, Murray said. Yet new drugs are needed for resistant infections that continue to increase in frequency, causing significant illness and mortality, the society noted…

Wright’s team has some promising leads on potential antibiotics, but they can’t find a drug company willing to spend the money to get the drugs to market.

“Funding is the challenging thing,” Wright lamented.

The infectious disease society found that most of the large drug companies have left the antibiotic business. The group has proposed tax credits to encourage the remaining pharmaceutical companies to conduct the expensive clinical trials needed to test antibiotic candidates…

“One would like to think that the pharmaceutical industry has motives in mind that are to benefit health care and human kind in general. Sadly, I think their bottom line is a business,” said Simor, who has no shares or interest in the pharmaceutical industry.

Expensive clinical trials?  What, you mean they weren’t lying when they say it takes a lot of money to bring a new drug to market?  If so why are we always accusing them of charging too much for their drugs?  I mean, someone has to pay for all of those lawsuits.  As well as those clinical trials.  And there is only one thing that can.  The price per pill.

Yes, they are more concerned about their bottom line than benefitting human kind.  Because they can’t force their highly skilled people to work for free.  Most countries have labor laws against that sort of thing.  And because they have to pay for these people years before they can sell any drugs they are working on someone has to pay them in the mean time.  And these people are investors.  Who take the risk of paying people for years of work even though what they’re working on may be nothing but a dead-end that produces no revenue.  Which happens a lot.  So the drugs that actually make it to market have to pay for themselves.  And all of those dead-ends.

Capitalism makes those miracle drugs possible.  And the proof of that is that they need these drug companies to bring these drugs to market.  For the state cannot.  Because the state doesn’t know anything about risk taking.  The only thing they know is how to raise taxes to pay for an inefficient bureaucracy.  While a private drug company knows how to get an investor to pay for an efficient business plan.  Capitalism brings new drugs to market.  And when you attack capitalism too much (higher taxes, more regulations, no relief from frivolous lawsuits, etc.) those who wish to make a profit may get out of the drug-making business.

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Greeks must now pay for their own Medications because the National Health Care System is Broke

Posted by PITHOCRATES - June 17th, 2012

Week in Review

As businesses wait with fear and trepidation for Obamacare to go into full effect we should consider what this will mean for the country at large.  More government benefits.  More government spending.  And higher taxation to pay for it.  Then we should look around the world for an example of large government spending and generous benefits.  To see if we can get an idea of how well something like a national health care system will work.  Let’s just pick a country at random.  Like this one (see Greek crisis hits hard at the pharmacy by Michael Birnbaum posted 6/13/2012 on The Washington Post).

From road-builders to priests to military suppliers, most walks of life have been affected by the government’s desperate bid to stanch the drain of euros from its coffers. Now health care is on the line, with pharmacists who are owed millions of euros by the government insurance system demanding in recent weeks that their clients pay the full sticker price for medicine. With unemployment at 22 percent and loans almost nonexistent, many people are doing without their drugs…

Under ordinary circumstances, the state health insurance system paid her pharmacist directly. Now pharmacists, fed up by delayed payments that they worry may never come, have told their customers that they need to pay cash and try their own luck at getting reimbursement from their health insurance.

Nothing is free in life.  Not even free health care.  Because government doesn’t make life-saving drugs.  Pharmaceutical companies who specialize in making life-saving drugs make life-saving drugs.  But even for them they are not free.  For they have to pay employees to make these drugs.  And they have to buy the chemicals to make these drugs.  And their chemical suppliers have their own employees to pay.  All of these costs are passed down the purchasing pipeline.  Right to the pharmacists.  Who must buy these drugs before they can sell them.  And when the government stops paying their bills someone has to pay them.  Or these pharmacists will just go out of business.  Because they’re not independently wealthy.  They run a pharmacy for living.  And simply can’t afford to buy drugs and give them away for free.

But pharmacists say they have little choice. Their suppliers, wary of extending credit in euros only to be repaid in weaker drachmas if the country gets booted out of the currency union, are demanding cash before they make shipments. And, though the pharmacies are receiving some reimbursements from the government, they are owed $188 million by the main government health insurance program, said Konstantinos Lourantos, president of the Pharmaceutical Association of Athens.

Doing anything on credit in Greece is risky business.  Because it’s not that certain if anyone will be able to pay their bills.  What makes this worse in Greece is who is paying most of the bills.

In Greece, where much of the private sector was sustained on public-sector spending, many business owners have found themselves to be unwitting creditors of the government, as payments have languished for months while their own credit has dried up, forcing them to scale back their businesses. That has made Greece’s recession, now in its fifth year, even harder to escape.

Everything has a cost.  Nothing is truly free.  Even when government provides it.  And the more the government provides the higher the taxes it takes to fund this government spending.  Relying on government spending, though, is risky.  Because tax revenue goes up and down with the economy.  During a recession there are fewer people working to pay income and payroll taxes.  And fewer people buying things to pay sales and value-added taxes.  Business revenues are down so businesses pay fewer income taxes.  During a deep recession tax revenue can fall far below the level needed to meet all government spending obligations.  Like reimbursing pharmacies.  And what do governments do during budget short-falls?  They borrow.  And Greece has.

Greece has borrowed so much that they are now a very poor credit risk.  They just owe so much money that a lot of lenders have grown doubtful that they will ever get their money back.  Which drives up borrowing costs.  Increasing the amount of interest they pay on their outstanding debt.  And as the recession lingers on tax revenues keep falling.  While the interest on the debt keeps rising.  Leaving less and less of those borrowed funds available to pay their massive government spending obligations.  And this is where Greece is.  They can’t pay their obligations without borrowing.  But they have borrowed so much that when they take on massive amounts of new debt much of it just goes to paying the interest on the old debt.  Which means they have to borrow ever more.  Increasing their interest payments on the debt ever more.  And leaving less and less for that massive government spending.

This is where debt crises come from.  Governments spending too much.  In fact it is safe to say that no government ever had a debt crisis from spending too little.  We can learn a lot from the Greeks.  In fact, we already have.  Most of Western Civilization goes back to Athens.  But we can also learn what NOT to do from the Greeks.  And a good place to start would be to repeal Obamacare.  For it’s this kind of spending that got Greece into trouble in the first place.

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The NHS using Cheaper Untested Drugs to Cut Costs and make their Limited Resources Stretch Further

Posted by PITHOCRATES - May 6th, 2012

Week in Review

Who is more evil?  The pharmaceutical that has spent time and money to develop a new drug?  And then further time and money going through a lengthy clinical testing process to guarantee (as best as possible) that the new drug is safe?  When proven ‘safe’ by the regulators to sell it at a patent-protected price?  To cover all of these costs.  All the costs for the 20 new pills that failed along the way?  And the inevitable lawsuits when a proven ‘safe’ drug proves NOT to be safe after all?  Or is the health service using a cheaper drug that appears to give similar results?  That hasn’t gone through that extensive clinical testing process?  But they use the cheaper drug because they can treat more patients than they can with the more expensive but clinically tested drug?

Oh, it’s a perplexing and vexing question.  For we want new super drugs to cure all that ails us.  But we want those drugs to be cheap.  And safe.  But if they end up hurting us we’ll sue the bejesus out of everyone who allowed that drug to get into our system.  Which brings us to a great catch-22.  Drugs cannot be both cheap and safe.  For even the expensive ones sometimes prove not to be safe.  Especially if we rush them to market to save lives.  Only to find that by rushing those drugs to market they’ve harmed the lives we were trying to save.

Sadly, they have to balance the quality of health care with the cost of that health care.  Which is a never ending struggle in the NHS (see Using Avastin for eye condition wet AMD ‘could save NHS £84m’ by Branwen Jeffreys posted 5/6/2012 on BBC News Health).

The NHS could save £84m [about $135 million US] a year by using a cheaper drug to treat a leading cause of blindness, research suggests.

NHS-funded research says both Lucentis and Avastin have a similar effect in preventing loss of sight when used for wet age-related macular degeneration.

Lucentis costs about £700 an injection, and Avastin £60 – but Avastin is not officially approved for eye conditions.

Novartis, which markets Lucentis in the UK, is taking legal action against four NHS trusts for using the cheaper drug.

The company says the use of Avastin – developed to treat cancer – is undermining patient safety…

Lucentis is officially approved for use in eyes, and is the treatment recommended in England and Wales by the watchdog NICE.

Roche, which owns the rights to the similar, but cheaper, Avastin, has never sought to have it approved for use in eyes, which would involve further clinical trials.

But many doctors have been using Avastin at their clinical discretion…

As they both target blood vessels, the IVAN researchers particularly looked at whether there was an increased risk of heart attack or stroke…

Novartis argues that Lucentis has a safety profile proven in clinical trials and approved by the regulators.

It says the US research, which has just published data from the second year, highlights what it describes as “serious safety concerns” about the use of Avastin in this unlicensed treatment of eyes.

It points, for example, to a higher rate of stomach and gut disorders in patients given Avastin…

Cost pressures on the NHS have led to an increased use of Avastin…

The financial stakes are high both for the NHS and the pharmaceutical company.

Perhaps the question should be which is more evil?  The pharmaceutical industry?  Or a national health care system that has put cost considerations before patient care?  For the use of the cheaper drug is driven by the cost of the drug.  Not by the effectiveness of the treatment.  They may determine that the cheaper drug may be as safe as the more expensive drug.  The drug that was specifically clinically tested and approved by regulators for that specific use.  But this points out another issue.  Is the drug approval process not necessary for all drugs?  And, if not, why have it?  If it is only delaying bringing more life-saving drugs to market at affordable prices?  And if this is all true then should there be a ban on all lawsuits against pharmaceuticals?  Who were only doing what everyone demanded of them.  Rushing new life-saving drugs to market.

Perplexing and vexing questions, indeed.  And ones that we will hotly debate as Obamacare comes on line.  For Obamacare will have greater cost constraints than the NHS.  For Obamacare will treat far more people than the NHS.  About 5 times as many as the UK based on population sizes.  Which means the debate under Obamacare will not be about saving $135 million.   But about $683 million.  Over half a trillion dollars.  Or about half of the 2011 budget deficit.  So you know Obamacare will consider these cost savings.  And use drugs that haven’t gone through the clinical testing process like they are in the UK.  And actively search for other savings.  And place incredible pressures on the pharmaceuticals.  Making it very difficult for them to make a profit.  Or to even cover their costs.  And when that happens they will drop out of the business of finding new super drugs to cure all that ails us.  Making what ails us really ail us.  Reducing the quality of our lives.  Perhaps even killing us.

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FUNDAMENTAL TRUTH #21: “The reason why health insurance is so expensive is because it is not insurance.” -Old Pithy

Posted by PITHOCRATES - July 6th, 2010

YOU CAME IN with a grand ‘to lose’ but have been riding a hot streak.  You’re up 5 grand.  And feeling luckier still.  You came in with a grand, you think, so you can just as well leave with a grand.  So you bet 5 grand.  Cause those cards have been so good to you tonight.  And there it is.  Blackjack!  And just as you’re about to shout to the heavens you see the dealer throw an ace on his down card.  The dealer asks, “Insurance?”   

You don’t want to but you just KNOW what’s under that ace.  All of a sudden you’re not so cavalier about losing 5 grand.  Too many friends have told you the same story.  “I was up 5 grand until that last hand.”   You could cry.  You don’t buy insurance.  Only suckers buy insurance.  That’s what you’ve always said.  But when you’ve got 5 grand on the table, the dealer can’t have anything but blackjack.  You know it.  He knows it.  And your wife knows it even though she’s off playing the slots somewhere.  You pull out $2,500 from your ‘do not touch’ money and buy the insurance.  (Let’s end this on a happy note.  The down card was a queen.  You walk away as if that last hand never happened, $5,000 richer.  Less taxes, of course.)

LIFE’S BEEN GOOD.  You’re making good money.  You have a beautiful wife and 3 great kids.  You just sold that small house and moved into that big house you always wanted for the holidays.  Cost a pretty penny.  But you had $75,000 in equity in the old home.  And cashed in a CD to furnish the new one with some nice new toys.  After all, life has been good.

The mortgage stings a little, but not too much.  You’ll get by.  You got all the big things you’ve wanted.  Now you can settle in and live modestly in your new home.  And you bought insurance up the wazoo.  If there is fire, flood, theft or death, no worries.  Well, there’ll be some worry, but you won’t financially ruin your family.  They’ll keep the house.  And there will be college for the kids.  Because you were responsible.  You protected the greatest investment of your life.  Yes, things have been good.  But not good enough to pay for everything twice.

TRADE EXPLODED IN the 17th century as little wooden ships crossed the oceans.  Storms and rough seas, though, toss around little wooden ships.  A lot of them sank.  With their cargoes.  But they didn’t all sink.  So owners insured their ships and cargoes.  For a nominal fee, they protected their investment.  For those that didn’t sink, the insurance wasn’t much of an added expense.  For those that did sink, it paid to replace the lost ship and cargo. 

YOU’VE ALWAYS WANTED to open a restaurant.  And your dream finally came true.  You saved for years.  You scrimped on vacations.  Didn’t by a new car.  Expensive toys.  No.  Your years of denying yourself the little pleasures in life saved up enough money to buy that restaurant.  To put enough money down to borrow to fit out the kitchen and dining area.  To stock your fridge, freezer and pantry.  You maxed out your credit and sunk your life savings into your dream.  And you’re loving it.  But you don’t want to lose it.  So you have all the insurances.  Fire.  Property.  Workers’ comp.  Liability.  So in case of fire, celebrating students (who trash the town after winning the championship), a strained employee back or an E. coli outbreak (because an employee didn’t wash his hands after using the toilet), you’re protected.  Your business may suffer, as they are wont to do after an E. coli outbreak, but the lawsuits won’t leave you destitute.

BEING IN THE NFL is a dream come true to many athletes.  But it can be a brutal occupation.  Compared to other professional sports, it has a short season.  Why?  Attrition.  Concussions, broken bones, torn ligaments and contusions take their toll.  The short season allows a longer healing period.  And time for surgeries.

Players can make obscene amounts of money.  But they can also suffer a career-ending injury in the first year of a multi-year contract. Great playing potential means great earning potential.  If you stay healthy and play.  Of course, if injured, all gone.  Some players insure against a career-ending injury.  Lloyd’s of London will insure an athlete.  For a price.  It ain’t cheap.  But if it keeps you from losing, say, 20 million in earnings, it could turn out to be quite the bargain.  If you’ve got huge potential.

THE MOST PRECIOUS gift we all have is our life.  So we take care of it.  We watch what we eat, don’t drink, don’t smoke, don’t take drugs, don’t speed in our cars or while on our motorcycles, don’t drink and drive, don’t drive around flashing railroad crossing barriers, don’t binge drink, don’t have unprotected sex, don’t play with matches or run with scissors and don’t do that thing where you jump up on a railing with a skateboard and fall, crushing your testicles on the railing and hitting your head on the concrete step.  No, we exercise, go to bed early and eat a lot of bran. 

All right, we probably don’t eat as much bran as we should.  And maybe we do a risky thing or two.  But we understand that those risky things we DO do can cost us.  Could wipe us out financially.  So we buy insurance to protect our life savings in the event of a catastrophic event that could be medically very expensive.

Or do we?

EVERYONE THAT HAS ever bought blackjack insurance didn’t get a winning blackjack hand.  Everyone that has ever bought homeowner’s insurance didn’t get a new home with their policy.  Everyone that has ever bought mariner’s insurance didn’t get a ship and a cargo of goodies with their premium payment.  Everyone that has ever bought business insurance didn’t get a business with their payment.  And an NFL player doesn’t get a dime from Lloyd’s of London until something pretty horrible happens first.  No.  These purchases were ‘just in case’.  Most people will never get anything for their payments (other than peace of mind).  Only those who suffer a loss will.  And those that do will have mitigated their financial losses with the insurance they so wisely purchased.  And they will get on with their lives.

This is insurance.   We use it to protect our wealth.  It takes a lot of time to accrue it.  So when we have it, we tend to protect it.  We do risky things.  And insurance manages that risk.  So we don’t lose everything we have because of a catastrophic event. 

We don’t think like this when it comes to health insurance, though.  We don’t think of health insurance as a way to manage our risk.  We look at it as a free ride.  If we have it, we expect free health care.  We want everything.  But we don’t want to pay for anything.  Free mammograms.  Those blue pills for the old johnson.  Heart valves.  Prenatal care.  Child vaccination.  Etc.

The problem is, these things cost.  A lot.  And if anybody can have them, those who actually pay for insurance have to pay for them.  And they’ll be paying for things they aren’t using.  All those things listed above mean nothing to a young single male.  But he’s helping to pay for that stuff.  Either by his premium contribution.  Or in lost wages.  Because an employer can’t afford such quality health insurance AND high wages.

Health insurance has become nothing more than a wealth transfer.  It’s like a Ponzi scheme.  A large and ‘growing’ group of healthy young people pay into the system and collect few benefits.  The ‘fewer’, older, sicker people pay little into the system but consume the lion’s share of the benefits.  At least in theory.  But like social security, and all Ponzi schemes, the theory doesn’t work in practice.

AMERICA HAS THE best health care in the world.  If you judge by where the affluent go for their health care.  They go to America.  And the best is never cheap.  You get what you pay for.  And if you want the best, expect to pay.  A lot.

All right, we have the best and some of the most expensive health care in the world.  Add to that an aging population.  What do you get?  A shrinking group of people (the young and healthy) paying for a growing group of people (the old and sick).  That means the burden on those paying into the system has to what?  It has to keep getting bigger.

But it can’t.  The young and healthy will just opt out.  Eventually.  When it gets to the point that it’s a car payment or a health insurance payment, what do you think they’ll choose?  Their annual health care expenses for an entire year may not equal one premium payment.  So they’ll say screw that.  And do.  A lot of young do not have health insurance because they choose not.  It’s just too fricking expensive.  And this just shrinks the shrinking group more.  Which increases the amount those with insurance pay.  And so it goes.

AND YOU DON’T fix this problem by nationalizing health care.  That doesn’t address the problem.  You have to tie the cost to the benefit.  People only chose to pay for things they get.  Those receiving the benefit, then, need to pay its cost.  Like we do with every other thing in our lives.  You want a TV you pay for a TV.  You don’t pay for one so your neighbor can have one.  TV prices are very reasonable, too.  They keep coming down.  The quality is fantastic.  And so it would be in health care.

Single payer health care insurance ain’t the answer either.  Because it’s not insurance.  It’s a wealth transfer.  That means it’s political.  It will serve political ends.  Not make good health care.  First of all, they’ll force the young and healthy to pay for insurance under penalty of law.  Or they’ll raise taxes until it hurts.  Then they’ll cut costs.  First by limiting what doctors can earn.  Then they’ll limit the profits the pharmaceuticals can make.  Then the medical device makers will have their turn.  Soon, people won’t want to be doctors any more.  Or make new and life saving drugs.  Or make medical devices.  So when the supply of these things falls, rationing must follow.  And if you really want to cut costs, there’s really only one place to do it.  The really sick and the really old.  These people, after all, consume the lion’s share of health care services. 

We don’t have a health care problem.  People are living longer than ever.  We have a dependency problem.  The current system has made us dependent on others for our health care.  And dependency kills.  It cowers a people.  Takes away their dignity.  Makes them subservient.  People live in fear.  Of what they may lose.  Nationalizing health care will only make us more dependent.  It’s not the answer.  Unless you want to conquer and subjugate a people.  I mean, how many of you have stayed at job you absolutely hated because of the health insurance?  If that ain’t subjugated, I don’t know what is.  As bad as that was, at least you got something for it.  Good health care.  If you think you’re going to get that under a national system, think again.  Or ask those people with a national system that come to this country for better care.

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