By the Editorial Board
Salt Lake Tribune, April 4, 2016
Those who continue to argue that there is a “free market solution” to the unconscionable costs and gaps in the American health care system have to explain away the train wreck surrounding new cures for hepatitis C.
The good news is that there is a cure for hepatitis C, a blood disease that can lead to a slow and painful death as it destroys a victim’s liver. In fact, now there are a few. Gilead Sciences markets concoctions called Sovaldi and Harvoni. Janssen Research offers a drug called Olysio.
The bad news is that the cost of the full treatment regimen for a single patient can run from $83,000 to $189,000. That, obviously, is well beyond the reach of nearly every household and understandably enough to scare off both private insurance carriers and government-funded Medicaid.
The worse news is that, because the United States clings to the idea that wellness is a commodity subject to rational market forces, nobody is trying to limit these awful costs.
Pharmaceutical research is expensive, yes. But American drug companies remain by far the most profitable part of the health care sector.
The drug companies charge so much for these medications for one reason: Because they can.
Functioning free markets do not — and never will — exist in health care because the sellers so often hold all the cards. Unlike someone in the market for a car, a television or a cell phone, people who need a particular medication cannot just decide not to buy a product until the price comes down, or just to do without it altogether. Unless they are interested in dying, or watching a family member die.
Civilized nations — a term that excludes the United States when discussing health care — either regulate the prices of drugs or use their concentrated purchasing power to negotiate a reasonable cost. In India, for example, a dose that is identical to what costs more than $90,000 here costs $900.
Drug makers argue that even the staggering cost of Sovaldi or related drugs is a bargain compared to avoided costs of more treatment, surgeries, disability, early death, etc.
But that doesn’t help the uninsured family that can’t afford either the drug or the alternative. And it isn’t always enough to push insurers to pay up, because Insurance Company A may bear the cost now, only to see the clients move on and endow Insurance Company B — or Medicaid or Medicare — with the avoided costs months or years later.
It is notable that single-payer systems, such as in the United Kingdom, have done the math and agreed to pay high — though less than in the U.S. — prices for these drugs. That’s because, in those nations, the single payer does, indeed, come out ahead by paying a lot now but saving many multiples of that later.
In other words, the case made by the drug companies for allowing them to charge such high prices is also an argument for Medicare for all.