Word Games as a Mask for Compulsory Healthcare Equality

The recent decision by the Food and Drug Administration (FDA) to revoke approval of the drug Avastin for late stage breast cancer is an action with considerable significance for the future of government financed or subsidized healthcare. The FDA pretends to do a risk-benefit analysis and comes to the conclusion that the benefits are not worth the risks.  But since we are dealing with likely terminal cases “risks” must be interpreted with a grain of salt. But, fundamentally, people should be able to strike their own risk-benefit tradeoff, especially in consultation with physicians and due attention to the specifics of their own case.

The truth of the matter seems to be that the FDA really did a cost-benefit analysis. The cost of the drug, on an annual basis, is $90.000. (It is not clear how many people would live to take it an entire year.) So the real issue is given the cost, is the risk-benefit profile sufficient to warrant taking the drug?

The significance of the FDA decision is that Medicare, Medicaid, and many private insurers will not pay for non-FDA-approved (“off-label” uses). When ObamaCare fully kicks in presumably the subsidized health insurance policies will not also.

Now why didn’t the FDA say the use is approved with caution but that because of cost-benefit considerations neither Medicare nor Medicaid would pay for it?  This would have created a political uproar about rationing, death panels and so forth. Instead, they talk about “risks” and make a subjective comparison with benefits that sounds scientific. Thus, the FDA withholds approval of a drug that is simply not good – nothing anyone should want to take. So obviously there is no rationing and no imposition of medical equality. Or so they would have us believe.

Call the drug too expensive and all hell breaks loose. Call the drug too risky and most people go along with the decision.

The consequence of this “word game” is that even fewer people will have access to the drug than if the FDA had been honest (that is, approved the drug with caution). However, from a political point of view it is better that fewer people have access to expensive but possibly “low” benefit drugs than more people. The key thing is that the mirage of equal care for all (with its associated “no rationing” in government programs) be maintained.

The problem in this particular case, to be sure, is ameliorated by the fact that it is still possible to take drugs for off-label purposes. But consider a new drug that has only one use that fails the FDA’s “risk-benefit” standard. It will not be approved and will not be available at all.

Is the preservation of myths what we have come down to? Is this the plan to save the welfare state?

About Mario Rizzo 75 Articles

Affiliation: New York University

Dr. Mario J. Rizzo is associate professor of economics and co-director of the Austrian Economics Program at New York University. He was also a fellow in law and economics at the University of Chicago and at Yale University.

Professor Rizzo's major fields of research has been law-and economics and ethics-and economics, as well as Austrian economics. He has been the director of at least fifteen major research conferences, the proceedings of which have often been published.

Professor Rizzo received his BA from Fordham University, and his MA and PhD from the University of Chicago.

Visit: Mario Rizzo's Page

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