| So I was expecting another story about some IP troll buying the rights to a drug with a monopoly and then jacking up the price (like the whole EpiPen fiasco) but this wasn't that. There's an old Chris Rock bit about Big Pharma where he says there'll never be another cure for HIV like there was for polio because there's no money in that. The money is in getting you to the next stop. It's poignant because this isn't a theoretical scenario. Gilead recently was downgraded on declining revenues because they're wiping out the disease (Hepatitis C IIRC?). So, back to Glybera. There are plenty of low-incidence diseases that are treated by expensive drugs to manage them. This is a lifelong commitment. Covering such drugs in company health plans can significantly increase the per-member costs. If you have a drug that essentially cures the drug in one dose shouldn't that be weighed against the lifelong cost of covering a regime to manage the disease that is inferior? Multiply that by the disease being quite rare and sure, you end up with a $1 million price tag. As further evidence for how screwed up the US health insurance system is: companies enroll in plans for their members typically for a period of a year or maybe a few years. Let's say your drug's price of $1m compares favourably to $100k/year for 40 years to manage the disease. How can a company who might only be covering the employees for 1-3 years be expected to cover that higher cost? To be clear, this is further evidence of how stupid the US model is. In a single payer model this particular concern goes away. How many rare genetic disorders are out there where $1 million per patient for an essentially complete cure isn't a bargain compared to the cost of managing the disease? Probably a lot. Is it fair to decry such expensive drugs just on their price tag without looking at the facts? Probably not but I bet you it will happen. |
Yes, it's essentially a Prisoner's Dilemma. If every insurance company agreed to pay for this drug, the total cost of treatment overall would be lower (and the patients would be healthier and happier). If my company decides to pay it and no other insurance company does, then when the patient leaves our network (in less than 10 years) and joins another insurance network, my company will have paid the cost but can't reap the financial benefits.
There's two major differences between this scenario and classic PD, though.
First, companies are allowed to communicate. We could conceivably get everybody in a room together and come up with some agreement by which everybody agrees to pay for this drug, even if patients switch insurers. Everybody wins. Patients are healthier, and insurers save money.
Second, it's not a one-time decision. An insurer can change their mind from "no" to "yes" at any time. So it's more like "iterated PD", with an indefinite number of rounds. In that game, interestingly, there is no strictly dominant strategy, and altruism tends to do better in practice! So maybe you don't even need an agreement.
> To be clear, this is further evidence of how stupid the US model is. In a single payer model this particular concern goes away.
How do you figure? The article points out that they also had trouble convincing European governments to pay for it. You can't get Glybera anywhere in Europe or Canada today, either.
The US model is arguably a poor one, but this isn't a good example of that, because every other country in the world failed at Glybera, too.