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Hard Decisions

The New York Times has a good piece today examining the focus the pharmaceutical industry is putting on new cancer treatments. Part of their shift in priorities is attributable to scientific advances: We have some new ideas on how to attack cancer. But part of it is a fairly cynical reliance on the exact dynamic that makes health care such a problematic market:

Patients are often desperate, and insurers risk outrage by denying payments for a cancer drug, even if the odds say it will have little benefit. That has allowed pharmaceutical companies to charge thousands of dollars a month for cancer medicines. Such prices can make drugs for even rare cancers, or drugs that do not work very well, into big moneymakers.

In other words, we can't say "no." Even a drug that probably won't work is worth mortgaging the house. Your spouse's life, after all, is priceless. But this ends with us in a fairly troubling place: The ranks of pricey new drugs that might work — particularly if "might" doesn't have to refer to a high probability — is advancing a whole lot faster than GDP, or wages.

This might not matter if we didn't believe that every American had some basic right to these treatments, at least after they turn 65. But we do. And for those who think we should just dismantle Medicare, keep in mind that a lot of this innovation is predicated on people being able to buy these drugs with government subsidies. Take away those subsidies, and those customers, and you lose a lot of this innovation, arguably. My stopgap, second-best answer is to pump a lot of money into research that ascertains both effectiveness and cost-effectiveness, and to allow the government to bargain down the best deals and act as a countervailing force against the pharmaceutical industry's realization that people will pay any price for these drugs because they feel like they have no choice.

That might not be your answer. But then you need a different answer. Doing nothing counts as a vote in favor of national bankruptcy, or at least much higher taxation.

By Ezra Klein  |  September 2, 2009; 1:15 PM ET
Categories:  Health , Health Economics  
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Comments

Do you believe that our politicians will be more capable of saying no in situations like this? My worry has never been that the government will have to ration- its that our political system will be incapable of rationing. Covering 15% of our population is already bankrupting our country and our political system has shown no ability whatsoever to make even reasonable cuts in medicare. Once more of the population is covered by government healthcare I just see that problem getting worse and worse.

Posted by: spotatl | September 2, 2009 1:23 PM | Report abuse

"But then you need a different answer."

Medicare needs cost-sharing, with degree of cost-sharing based on cost-effectiveness. $/QALY is my preferred measuring stick.

You don't need "a lot of money" to determine cost-effectiveness. The clinical trials already determine the average improved morbidity and mortality, which combined with an enhanced QALY determination, its a relative straightforward to a cost-effectiveness calculation.

See Medicare's recent assessment of the cost-effectiveness of different colon cancer screening technologies. There wasn't "a lot of money" needed to do new research. Just a sharp CMS analyst that can take the existing medical literature and make sense out of it. You've got to move away from the thinking that we need a lot more research to determine cost-effectiveness. If you have clinical benefit determined, the rest is pretty easy.

Posted by: wisewon | September 2, 2009 1:34 PM | Report abuse

Shorter Ezra on his policy prescription:

Because we can't say no (either the people or politicians), the government's role should be making it cheaper to keep using treatments with minimal to no benefit.

This is the way to a better system? How about fixing the problem?

Posted by: wisewon | September 2, 2009 1:36 PM | Report abuse

A fair bit of this emphasis comes from the fact that when treating cancer, it being a terminal disease, the threshold for safety is much lower.

With drugs which treat things like high cholesterol--pills that will be taken daily for many years, if not a lifetime, the ability to deliver results is important, but only when it can be done in a way that has minimal side effects.

That's very, very hard, very expensive, and drug candidates are much more likely to washout in clinical trials.

When treating cancer, the balance between efficacy and safety shifts in favor of molecules which may, for instance, do liver damage, but which is considerably better than letting the cancer run its course.

This means that cancer drugs are not only being sold to a market that is unlikely to apply a strict cost-benefit analysis, but are also, on average, cheaper to develop because a lower fraction of them wash out in clinical trials.

That it's now a tenable position that companies who develop treatments for cancer are doing something wrong is an indication of how poor the pharmaceutical industry's PR has been over the last couple of decades.

Posted by: TWAndrews | September 2, 2009 1:39 PM | Report abuse

Conservatives will probably say this reeks of Socialism, but doesn't the government pay for a lot of the research into these therapies? Which means we've already paid for them to a large extent, as the government's money, of course, comes from us. Doesn't that give the government some moral force in limiting prices to the extent we hve already underwritten the research and development?

Posted by: dlk117561 | September 2, 2009 2:11 PM | Report abuse

The 22,000 a year who die because of lack of access to a floor of health care have no house to mortgage, no savings to tap. These arguments mean nothing to them. They are the ones being rationed to non-existence, zilch.
It's called social darwinism. No insurance, you die!

http://www.nchc.org/facts/coverage.shtml

Posted by: cmpnwtr | September 2, 2009 2:31 PM | Report abuse

There really needs to be a frank discussion with patients and their families about drugs. My mother got colon cancer at age 86, when she was already into fairly bad dementia, though not as bad as it eventually got. We had surgery for her, no question. The Dr said that it might return, and we could consider chemo, but he advised against it. Having watched my niece go through chemo, I said no and my siblings agreed, because of the discomfort it would cause her, psychologically and physically. She lived another 10 years, to everyone's amazement, with relatively few problems except advancing dementia, ultimately dying peacefully of pneumonia.

If it had been a spouse aged 45, of course the considerations are different. But still. I read a comment recently from a man who had lost his wife to cancer despite spending lots on expensive and painful treatments. At the end he said, "In retrospect it would have been better to go to Venice," which I took to mean enjoy as much as possible the time remaining not keep mtrying to fight the disease.

The problem is when faced with those decisions, one never knows how the disease will progress. Perhaps we need to deal with our feelings about death and about each other, so the decisions can be a little more straightforward and less fraught. But it is never going to be easy.

Posted by: Mimikatz | September 2, 2009 2:36 PM | Report abuse

Some managed care organizations have begun paying for drugs based on clinical outcomes. To the extent that the companies bringing these drugs to market would be amenable, this may reduce the risk that a payor wastes a lot of money on drugs that have a very small probability of making a huge difference.

Posted by: GrandArch | September 2, 2009 2:36 PM | Report abuse

*the government's role should be making it cheaper to keep using treatments with minimal to no benefit.*

That sounds like a great idea. Since they provide minimal to no benefit, why should they be so expensive?

Posted by: constans | September 2, 2009 2:43 PM | Report abuse

It's nice to see admissions coming out that we're going to stop trying all these wasteful desperate measures to save people.

Now all we need is some sort of panel to decide which successful procedures we will continue to try, and which last-ditch efforts we will no longer attempt.

I wonder what we could call such a panel.

Posted by: whoisjohngaltcom | September 2, 2009 2:53 PM | Report abuse

Wisewon –

I think you are partly right and partly wrong about your approach to cost effectiveness.

The idea of using cost to control over-utilization is a good one. But patients are very poor judges of cost effectiveness, frequently neglecting effective low cost management while seeking higher cost ineffective treatments. Advertizing is designed to make that even worse, and works well. It is unlikely that systems based on increasing co-pays would work as well as just limiting what is covered and what is not. People will still avoid colonoscopy and seek out MRI and coronary artery interventions. We are going to need a more direct approach, since there is persistent determination to buy the wrong things. Granted, some people will still buy the wrong thing, but a red light/green light approach would probably work better than a toll bridge.

Second, while I think there is plenty of room to start good effectiveness based spending control -- management of back pain, management of coronary artery disease, management of hypertension, the role of some expensive drug therapies that are either not better at all or barely better – we are by no means done with the process. We still need more research on many topics not fully evaluated, and every time there is a new management approach we need more research.

This will never be done. If we don’t keep up the research, we will soon be inundated with a whole new set of ineffective, expensive techniques being aggressively promoted by manufacturers and others with a vested interest.

Opponents of this tend to assume there is some way that we can guess what is effective, that advertizing doesn’t work, that the legion of equipment salespeople and drug detail people are much less effective than the manufacturers believe they are at persuading doctors to adopt more expensive and less effective methods, or that doctors are somehow exempt from the ancient adage that it is easy to talk yourself into a false position when your income depends on it.

Finally, I wish people would stop calling this rationing. Refusing to buy things that don't work is not rationing. Refusing to buy things that are harmful is not rationing. We got past that idea at the turn of the 19th century, when we started the FDA.

Posted by: PatS2 | September 2, 2009 3:47 PM | Report abuse

"Doing nothing counts as a vote in favor of national bankruptcy, or at least much higher taxation."

No. Do nothing for 17 years and then the drugs become cheap as the patent runs out.

Maybe not $4 a prescription at WalMart cheap but certainly not in the $50,000 a course of treatment expense.

What you're forgetting is that new drugs are expensive at first, then they become extremely cheap, closer to their marginal cost of production once the legal protection has ended.

Posted by: timworstall | September 3, 2009 4:27 AM | Report abuse

I think we all know that Ezra would denounce pharma expenditures on lifestyle drugs for non-life threatening conditions as wasteful expenditure designed to make money. "Why aren't they focusing on curing cancer," he'd say. Now, of course, he's denouncing pharma for spending too much noey on life-threatening disease, because that's just wasteful expenditure designed to make money.

The point here has nothing to do with public health. Ezra's made it clear that he wants people to get less health care. This is all about political control.

Posted by: tomtildrum | September 3, 2009 1:40 PM | Report abuse

I think we all know that Ezra would denounce pharma expenditures on lifestyle drugs for non-life threatening conditions as wasteful expenditure designed to make money. "Why aren't they focusing on curing cancer," he'd say. Now, of course, he's denouncing pharma for spending too much money on life-threatening disease, because that's just wasteful expenditure designed to make money.

The point here has nothing to do with public health. Ezra's made it clear that he wants people to get less health care. This is all about political control.

Posted by: tomtildrum | September 3, 2009 1:41 PM | Report abuse

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