Feds Deciding When Healthcare Science Costs Too Much To Save Lives

-By Warner Todd Huston

If anyone wants a current example of what is looming ahead for medical science at the hands of Obamacare, the Avastin controversy is a perfect one. The Food and Drug Administration (FDA) wants to de-list the cancer drug Avastin one reason being that it is a drug too expensive for government to fund. It is scary to think that the federal government can summarily dismiss cancer drugs merely because of expense, but that is what happens when government starts counting the beans. It becomes an issue of cost instead of effectiveness.

There were other reasons that the FDA wants to dump Avastin, but cost was one of them. One of those that sat in judgment of Avastin admitted that cost was a factor in the decision to delegitimize the treatment. Natalie Compagni Portis, a member of one of the panels that the FDA convened to investigate the drug, said, "We aren't supposed to talk about cost, but that's another issue."

In some cases it costs as much as $88,000 annually for an Avastin breast cancer regimen, certainly not a cheap deal. But who is the government to decide that a lifesaving (or life extending or life changing) drug is too expensive for us to be allowed to use?

Imagine what this might mean for future experimental drug treatments? How many drug companies will continue pursuing new treatments when they begin to see the expense involved? How many promising drugs will be abandoned as companies become fearful that the costs of development will never be returned in sales because of government proscriptions?

Let's put it in different terms. Remember when flat screen TVs first came out? They often cost over $20,000 a set. Certainly only the very rich could afford such a ridiculously extravagant price for a mere television, right? But as more people clamored for them companies began to experiment on production techniques and the technology began to come down in price. More people bought flat screens when prices fell to $10,000, then $5,000, then $2,000 per set. Thanks to the profit motive more and more customers could finally afford flat screen TVs until today that is practically all you can buy, often they are under $1,000.

Now, imagine where our TV technology would be if the federal government stepped in and summarily decided that $20,000 was too much for a TV and prevented companies from selling products that were initially so highly priced? TV manufacturers would have instantly ceased experimenting and manufacturing the over priced products, prices would never have come down through competition and innovation, and today few people would have the benefit of a flat screen TV.

This example may seem trivial, but the drug manufacturing industry is not that much different than the example above. The fact is drug companies are companies first and foremost. They manufacture products for sale. They aren't charities. And if these companies see no profit at all in the effort they will not bother pursuing it. That is simply a fact of life.

That fact of life, that quashing of the entrepreneurial spirit, the destruction of the profit motive, all at the hands of government, will also quash new drugs that might bring lifesaving cures in the future. Avastin is one example of the heavy hand of government putting us all at risk.

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Good to see you, WTH

A good article, and I would like to draw attention to three points.

1). If the government removed certain expensive medicines or procedures from their approved for payout list, I call that a good thing.  In all that talk of 'universal health care,' there wasn't really much talk about what part it is that people want to be universal.  Myself, I prefer the Swiss model.  The Swiss have universal health care (universal access) that is paid for by a portion of their taxes, but it doesn't cover much.  And so, supplemental health insurance is very popular there.  Because of that, I see any reduction of coverage on the part of the government as a good thing.

2). The thing about, "prices would never have come down through competition and innovation."  As I remember it, pricing is about the production cost of the next item rather than the last one, and this is what makes "public goods" public is that the cost of production for the next item consumed is virtually zero.  Not to say that competition doesn't play an important role, but I'm saying that, as far as pricing is concerned, automation of production process is more of a factor, and that's where the significant (as far as pricing) innovation takes place.

3). Looking at this article, I think this is some sort of technocrat decision with implications that are hidden.  Here it is (emphasis is the author's):

Astonishingly, it ruled again, this time 12-1, that Avastin's progression-free survival advantages are not clinically meaningful.

I'm not so sure that there isn't some difference in the term "clinically meaningful" from a legal perspective as from a medical perspective.  They might well mean two different things.

On to something else.

When I was in high school, my mom worked in the preemie unit of a local hospital.  There was a young couple there, early twenties, I believe, that had a baby whose guts were on the outside of its body when it was born.  They spent over a quarter of a million dollars (mid-80's dollars) keeping this baby alive for 10 days, even though it was hopeless.

I understand why they did it, and I would have to.  But I don't want to be the one to pay for it.  I don't want the government to be a one-stop financing shop.

Stop and think for a minute about how much 10 more days of your son's life might be worth to you.  But this is a big nation, and lots of people die here every day.  We can't pay that much for all of them.  We have to have limits.

What I find most amazing of all is that wisdom is in short supply among mankind that we can't even agree what it is.


But the Chevy Volt is worth more Govt. Support than Avastin ?

Evidently you'd rather support Govt. motors building the Chevy Volt ?   Which is  really unfair to you as a comparison of your Avastin post......but I'm trying to make a point.  We/you personally, don't have much influence on the Government choice of controlling GM for building Green Automobiles.   We can't even influence the Health Care choice......so far this year......but things may improve for "influence peddling".

The point being, Government has limitations, and when the Government is in every nook and cranny of your life, from School lunches and Avastin and GM motors and banking and mortgages and College loans.......etc.....since WHEN did the Government have the Smartest people in the USA working for them ?    They don't, and the Government has very small "creativity" limits because of all the dumass small people that run the government.   And I mean that insultingly, the Government can't manufacture anything unless they take money from people who ARE creating.

Smaller Government, more Freedom of choice, less regulations, mean MORE for all Americans.  Too much government brings the contrast of political choice to the table of choices......Chevy VOLT subsidy   -or-    Avastin subsidy  ?   Americans want Americans outnumbering the Government employees, the needs of the many out weigh the politics of the few.

Our government just spent $ 2,000,000 studying the ANTS in East Africa...................maybe that money could have been better spent ?   How about the Alcoholic mouse study  ?   How about the  $2,000,000 tax payer dollars per stimulus Job created ?

You get the point, I hope.............the Government should NOT even be involved in the Avastin decision at all.  the goverment didn't invent it, and they shouldn't be "regulating" the success or failure of any product or service that is offered freely to the Global community.   Let the real people decide, not the Government.

Or, as Greg Gutfeld  said " Lets fund NPR to remind us what Failed Government Subsidy's are all about"......or something like that (link).