British National Health Service Stops Paying for Lifesaving Drugs
Britain’s government-monopoly (single-payer) health plan, the National Health Service (NHS) has announced plans to stop paying for the most innovative, lifesaving drugs:
More than 5,000 cancer patients will be denied life-extending drugs under plans which charities say are a “dreadful” step backwards for the NHS.
Health officials have just announced sweeping restrictions on treatment, which will mean patients with breast, bowel, skin and pancreatic cancer will no longer be able to receive drugs funded by the NHS.
In total, 17 cancer drugs for 25 different indications will no longer be paid for in future.
Charities said the direction the health service was heading in could set progress back by centuries.
The Cancer Drugs Fund was launched in 2011, following a manifesto pledge by David Cameron, who said patients should no longer be denied drugs on cost grounds.
Drugs which will no longer be funded include Kadcyla for advanced breast cancer, Avastin for many bowel and breast cancer patients, Revlimid and Imnovid for multiple myeloma, and Abraxane, the first treatment for pancreatic cancer in 17 years.
(Laura Donnelly, “Thousands of Cancer Patients to be Denied Treatment,” The Telegraph, September 4, 2015)
This is the second round of cuts this year. All in all, reimbursement for 25 drugs used by about 8,000 patients has been cut off. Unfortunately, this is not surprising.
In a functioning health insurance market, these drugs would be reimbursed because they are very expensive and are used by a very small proportion of patients suffering from cancers with few other cures. In other words, exactly the situation that calls for insurance.
In a system run by politicians, the incentives are upside down and unfair:
- The financial ability to pay is not determined by premiums paid, but by the government’s overall budget.
- The number of patients do not comprise a large enough interest group to cause politicians to prioritize their interests.
- There is no way to legally enforce the so-called “social contract” (as opposed to an actual insurance contract, which courts would enforce) that the politicians and bureaucrats promote to convince us to trust them.
Note, also, that Britain is home to leading pharmaceutical companies, including GlaxoSmithKine and AstraZeneca, and world-class academic pharmaceutical research. They should be able to make strong arguments for their contribution to good-paying jobs and economic growth. Unfortunately, the perverse incentives in a government-monopoly, single-payer health system are too strong to be overcome by even the best arguments.
I’ve always told people that in a system that doesn’t use consumers and price rationing to determine the allocation of scarce resources, someone other than the patient will necessarily have to make rationing decisions.
This royal throne of kings, this scepter’d isle,
This earth of majesty, this seat of Mars,
This other Eden, demi-paradise,
This fortress built by Nature for herself
Against infection and the hand of war,
This happy breed of men, this little world,
This precious stone set in the silver sea,
Which serves it in the office of a wall,
Or as a moat defensive to a house,
Against the envy of less happier lands,
This blessed plot, this earth, this realm, this England
I would have given you extra points if you had bowderlized it with some references to the NHS
I think the British people decided decades ago to spend a smaller percentage of their GDP on healthcare than other developed countries do in order to free up resources for other things. Rationing decisions were also outsourced to the political process as well.
This “could set progress back by centuries”… a bit hyperbolic, no?
It seems that in a well-functioning market, these drugs *may* be covered. But given that the Brits love their NHS, and that they think spending other people’s money on their healthcare is a great thing, is it wrong for the NHS to weigh the costs and benefits for each drug? You can debate how those calculations are made, but I wish Medicare and Medicaid would put some of this cost-benefit analysis into action.
Out of curiosity… why is it that private plans haven’t arisen in the market? Is there a law against private plans covering things that the NHS doesn’t? If not, it seems that insurance plans (in the true sense of insurance) should arise in the market if they are financially viable.
Clearly, “centuries” is an exaggeration because the drugs in question are only a few years old!
JFA, you ask “why is it that private plans haven’t arisen in the market? Is there a law against private plans covering things that the NHS doesn’t?”
They have. There’s not. And they do.
Obtaining Private Medical Treatment:
https://www.citizensadvice.org.uk/consumer/professional-and-financial-services/private-healthcare/should-you-go-private-healthcare/
Briefly, one can get private medical treatment in the UK if one is able and willing to pay for it. Private medical insurance is the primary means people use to pay for private medical treatment. Note the important distinction in this article (not always perfectly clear, but it’s there) between private treatment, and private insurance.
Follow a link on that page to this one:
Obtaining Private Medical Insurance
https://www.citizensadvice.org.uk/consumer/professional-and-financial-services/private-healthcare/buying-private-health-insurance/
This all sounds just like the medical insurance we Yanks have decided we detest. Right? Cheerio.
btw, these links are from the CitizensAdvice organization in UK. It was set up by the British government around 75 years ago to be an information service, linked to the then-fledgling social welfare service. It’s not part of NHS.
Here is a more academic article published in 2006 by the World Health Organization on behalf of the European Observatory on Health Systems and Policies. Although this is a bit dated, it still has information that you might find useful – if you care to slog thru 100+ pages.
http://www.euro.who.int/__data/assets/pdf_file/0007/98422/Private_Medical_Insurance_UK.pdf
Finally here is a more recent article (late 2013) from the Financial Times that asks the same question you ask – but their answer, if they have one, is not at all clear. The article does say that private medical insurance penetration reached 10.9 per cent in 2011. Per cent of what, they don’t specify.
Meanwhile, this article goes on to describe problems in the British system that sound eerily like our own. The main thing this article tells me is that NHS has not solved the problems of access or cost of medical care. Copycats beware.
All that from just 10 minutes of digging. Your turn now.
Oops. Here is the missing FT link:
http://www.ftadviser.com/2013/10/02/insurance/what-is-blocking-private-medical-insurance-growth-Y1848IeT53xWBPTREVTwXO/article.html
Thanks John.
I wonder what the survival rate is for pancreatic cancer even if one is able to access an expensive drug. I have the impression that even the best new drugs are rather futile.
Advanced breast cancer was the subject of a huge debate in the USA about bone marrow and other treatments. I believe that many of the drugs involved at that time were finally judged to be futile.
Of course this area of research changes all the time.
But I just wanted to plant a seed of doubt here.
“The headline says “NHS to stop paying for ‘life saving’ drugs”. I’m betting they’re actually making a rational decision to stop paying high marginal prices for a few extra months of life for people destined to die anyway. The politics of medicine, as it plays out under public choice theory, suggests that is the inevitable trade off.
For every subsidized drug canceled, the people are freer. If all subsidies for drugs and health care (not to mention education and breeding) were eliminated, the people would be the freest. Remember: socialism is an evil, free markets are good.
Brits can no doubt get better and cheaper health care and good drugs without prescription in Cuba, not to mention abortions, which have been legal and available on demand there for decades.
When you can’t get what you want in Britain or Amerika, look for service in a freer country!
To save money, maybe NHS should start subsidizing cigarettes.