First off, I do not believe for one second that pharmaceutical reform is knocking on the door of this country. Further, this blog is not about politics, not even really is it about economics or business (though I do use the language of economics and business). My blog is for the purpose of developing my idea-shipping skills. With the necessary disclaimer out of the way I would like to get on with the strategic management decisions being made by pharmaceutical companies developing cancer- fighting drugs at prices close to $100,000 a year simply to prolong a cancer patients’ life a few months.
I know I just said this is not really about economics; but, I am going to use an economical technique known as cost-benefit analysis without the use of quantitative data that would turn this into an economic report. It is akin to the pros and cons decision making tool we use when we are trying to decide if we want to stay in our current relationship or get out, quickly.
Benefits to the expensive drug treatment to prolong life of a terminal cancer patient: A few more months with loved ones, finishing end-of-life business.
Costs to the expensive drug treatment to prolong life of a terminal cancer patient: A few more months with loved ones, finishing end-of-life business, on a life support system, reeling from the negative side-effects of ineffectual treatments of chemotherapy, and other preventive medicines that prevented nothing, causing loose bowels, nausea, and probably another type of cancer or Cancer. The high monetary cost of the drug imposed on tax payers through employer/government health care programs; yet, “ Bob Svensson, 80, a former corporate finance officer from Bedford, Mass." would not spend that money," because the benefit doesn't seem worth it, he says.” His insurance company, ergo US taxpayers, foot the bill.
My education in marginal cost-benefit analysis tells me the pharmaceutical and health insurance companies should stop offering and paying for these drugs. Yet, how does one put a price on a life? Oh, these same companies do it all the time, you say? They deny non-terminal patients treatment, you say? I’m sure the 300+ million people living in America today have at least one story about the inconsistent or inhuman practices by these very oligopolies.
I had a lecture this semester about medical research for treatments that benefit those most willing to pay. The class was Economics of Racism at Sac State and we learned that while there is nothing biologically different about any human on the planet, there are still different genetic combinations between people of different ethnicities that allow the same disease to be contracted through genetic mutations over a different sequence of genes. As a result, the treatment for disease X will work on Person A, but not on Person B because the genetics of the two people differ. Typically these two people are from different “races;” and, Person B will not get a variation of the drug because he or she is poor and unable to qualify with the insurance company to pay for the drug.
The companies responsible for treating the sick and dying could still make lots of money without tossing a decent cost-benefit analysis out of the window. I fully understand the concept of increasing the market share of existing stock as the driving motive of a firm; perhaps, the companies in the health care industry should be not-for-profit entities so that universal health care would become a reality. Not-for-profits are not now targeted as socialist entities, so why the government cannot create a law serves and protects its citizens I am not sure; I stay away from politics.
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