A recent threat by Democrat Attorney General of Massachusetts, Maura Healey, shows how a political agenda can overwhelm both proper cost accounting and good medical practice.
Healey has taken a page out her leader’s playbook, President Barack Obama, when threatening to sue Gilead Sciences, the developer of the drug Sovaldi, for “unfair trade practice.” Never mind they have broken no law, state or federal. I guess the law in Massachusetts is what Healey says it ought to be.
Diverting Attention From Failures
Attacking Big Pharma is a favorite tactic of the progressive left. They want to divert attention from the disaster unfolding in the Bay State’s Health Exchange, the impending failure of its Obamacare Co-op, and Massachusetts achieving “bottom five” status in fiscal condition of the liberal States.
So, Healey aims her unloaded and inoperative (but Big) weapon at a pharmaceutical Giant and innovator of a cure for the deadly Hepatitis C virus. This drug, named Sovaldi, has a price tag of $1,000/pill.
This looks like perfect low-hanging fruit. You can hear Healey screaming, “$1,000 per pill?! They must be ripping off the public! They’re making a life-saving drug completely beyond anyone’s pocketbook!”
The facts and the truth seem to be no deterrent to a progressive on a rant. Nonetheless, let me try to inject some calm, reasoned fiscal and medical reality.
Correct Cost Accounting: Sovaldi is Cheap!
Sovaldi is not hyper-expensive. It is dirt cheap; a great bargain in fact. Freshman Economics teaches that a proper cost calculation includes immediate outlay, long-term and maintenance costs, and avoided costs. Healey apparently skipped that day in class.
A standard course of Sovaldi is 84 pills over three months and costs $84,000. There are no long-term or maintenance costs as the drug eradicates the Hepatitis C virus and therefore cures the patient.
Ignoring Avoided Costs
And now we come to avoided costs. The alternative to Sovaldi for those infected with Hepatitis C involves treating the damage the virus does, specifically liver failure and liver cancer. The cost of treating these complications ranges from as little as $65,000 to several million dollars. Over 1,000 Hepatitis C patients per year require liver transplants at a minimum cost of $250,000 each. All such costs are “avoided” by Sovaldi.
Cure is Cheaper Than Palliation
Let me write that again, louder. The cost of CURING Hepatitis C with Sovaldi is a fraction of the cost of PALLIATING an infected patient. That sounds like a great deal to me, both as a patient and especially as a physician.
I was recently discussing the financing of Sovaldi with a friend and colleague who specializes in liver disease. He said that the U.S. couldn’t afford to provide Sovaldi to all patients with Hepatitis C because that would cost $3 billion. He had no response when I asked, “Then how will we afford the $10-20 billion just keeping them alive but sick?”
We cannot leave this subject without reiterating the primary reason why we have healthcare at all. It is not saving money. It is not to employ people. Healthcare’s raison d’être is having more healthy people. Even if a cure with Sovaldi cost more than palliative treatment (and it most definitely does not), isn’t it better to have healthy Americans than sick ones?
Dr. Deane Waldman MD MBA is author of “Healthcare Decoder” and the just released book, “The Cancer in the American Healthcare System;” Host of www.wecanfixhealthcare.info; Professor Emeritus of Pediatrics, Pathology and Decision Science; and Adjunct Scholar (Healthcare) for the Rio Grande Foundation, a public policy think tank. Dr. Deane sits on the Board of Directors of the New Mexico Health Insurance Exchange as Consumer Advocate. Opinions expressed here are solely his and do not necessarily reflect the opinions of the Board.
TheBlaze contributor channel supports an open discourse on a range of views. The opinions expressed in this channel are solely those of each individual author.