Of Free-riders, and a shake-down

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rationing

Item in the new: “The manufacturer of a drug which could extend the lives of thousands of people suffering from a rare form of cancer has agreed to pay for further patient treatment as part of a cost-cutting scheme.”  This arises from a decision of the English agency NICE to recommend limited use of this medicine.

We have a situation where the pharma company is going to provide the medicine for free to a certain group of patients (the details aren’t important for this commentary) at a certain point in their treatment — in this case toward the end of that person’s life.

How are we to make sense of this?

Who benefits?: the patients get the medicine which they would otherwise not get it toward the end of their life; indeed, unless they were able to pay for it themselves, they would be deprived of the medicine. NHS gets a medicine, which it would otherwise not pay for, for free, for a group of patients, one might argue they were abandoning.

Who pays?: the pharma company absorbs the cost of doing this for one final application of the medicine if needed; the public sector does not pay anything.

When some derive benefit for free from the actions of others, we call the former free riders; that makes the NHS a free-rider. Indeed, one might view NICE and other HTA agencies as acting to achieve free-ridership for the public system, by rationing public funding according to the HTA assessments. The pharma companies, wanting their medicines to be used (they might actually also want them to be paid for), give them away for this group of patients for their own reasons.

This small group of patients would undoubtedly suffer, a price NICE deems worth the cost, and the NHS in this case, is willing to be bound by a decision which may actually increase suffering. The pharma company has come to the rescue of these few patients and is now doing what one would think the public system should do, alleviate suffering. Had the pharma company put profits before use (which they appear not to be doing otherwise they would have sought payment) no doubt they would have been criticised for their prices, which of course underpins NICE’s cost-benefit analysis in part.

Did NICE shake down the pharma company?

I have argued elsewhere, that public health systems must be the payer of last resort (the so-called Rule of Rescue), which should challenge NICE’s models that would increase suffering, as that cost is something no state should ignore. The unethical conduct of public bodies here is breathtaking.

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