Sunday, March 2, 2014

Come Upstairs, and I'll Show You My BATNA

Wow.  Wonder drug.  It's not cheap.

When the Food and Drug Administration approved a medication called Sovaldi in December, it was hailed as a breakthrough in the fight against hepatitis C, a blood-borne disease that affects 3.2 million Americans and kills more people in the U.S. annually than AIDS.

Then California-based Gilead Sciences, the manufacturer, announced the price: $84,000 for a 12-week course, more than what many cancer treatments cost in a year.

The hefty price tag has rattled patient advocacy groups and insurance companies, who say most costly new treatments coming on the market are targeted for a smaller patient population. Putting such a premium on a drug that could help so many will be crushing, they say.
At least one prescription drug plan is encouraging doctors to delay prescribing Sovaldi for patients who can wait. One insurer has said it risks bankruptcy if it’s required to cover the drug for everyone who needs it this year. Advocates say Gilead has taken corporate greed to new levels.

The drug has also prompted a new round of hand-wringing over a larger issue: the escalating cost of specialty drugs, which are designed to treat chronic illnesses such as rheumatoid arthritis and multiple sclerosis and sometimes require special handling.
While these therapies are delivering body blows to some of the world’s most pernicious diseases, they also are testing the limits of what society is willing to pay for sought-after treatments or cures.

“The advancements that are coming in medicine are going to be stunning and amazing, both in terms of the kinds of things we can treat that we never could and what their cost is going to be,” said Matt Salo, executive director of the National Association of Medicaid Directors. “We’re going to need to think as a country about how do we value health and health care.”

So, all the Obama admin needs to do to go to "single payer" is to require that this therapy be covered in all plans.  All the insurance companies would go bankrupt, and we could enter the worker's paradise!

Thanks to Michael Cannon of CATO for the tip.  And make sure you check out Michael Tanner's piece on Obamacare, also from CATO.  Best thing I've read for a while on how things stand.

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Do you have suggestions on where we could find more examples of this phenomenon?