Hostages to pharma fortunes

It would seem that if the moral dilemma between death and life-saving drugs can be made acute and public enough, the government is compelled to pay any price charged – even if it means reducing other health services to other vulnerable people.

After the Health Service Executive agreed this week to provide the Soliris drug to patients suffering from rare blood conditions at a cost of €430,000 per patient per year, the HSE’s chief executive Tony O’Brien called the cost of the drug ‘astronomical’, while the Minister for Health, Leo Varadker, has said that the drug is ‘not cost-effective’ at that price.

And the head of the Irish Patients Association, Stephen MacMahon, has weighed into the debate saying that there should be more planning and negotiation in advance of the launch of such drugs to establish a price that is fair for all parties. “We know these drugs are coming on line and the price should be figured out before it gets to a stage where patients are being used as pawns in a negotiation,” he said.

‘Pawns’ is an accurate description, but ‘hostages’ would also be correct. If the company were to not make the drug available at what the government considered to be a fair price, the ‘hostages’ would die. There can’t be any better definition of the word.

The high cost of the drug has caused concern within HSE management – who have said they will have to cut back on other services to make up the money required. A relatively small number of patients will need the drug, but the huge individual cost will mean that there will be a shortfall in funds elsewhere – meaning cutbacks in home care packages, the recruitment of nurses or wherever money can be found.

It also, again, raises the question of the relationship between Ireland and the large number of pharmaceutical companies based here. Alexion Pharmaceuticals, the company that manufactures Soliris, has operations in 50 countries. Last year they announced that they would establish a global supply chain facility in west Dublin creating 200 jobs.

The government, or government bodies such as the HSE, are not in the position where they can antagonise not just the drug supplier in question, but also a large FDI investor. It also raises the question of the price the government is ultimately willing to pay for drugs that will save a life.

In 2013, the Minister for Health made the drug Kalydeco available to patients with Cystic Fibrosis. The drug radically improves the lives of some Cystic Fibrosis patients, but comes at a cost of €234,000 per patient and it costs the health service €20 million per year.

Many would say – particularly the patients and their families – that the cost is irrelevant when lives can be saved. But other services which save lives and improve the quality of patients’ lives have been cut in recent years, even though these services cost a lot less per patient.

For example, last year the HSE cancelled gastric-bypass operations on dangerously obese patients which obesity expert, Dr Donal O’Shea said was a ‘death sentence’ for his patients.

The surgery reduces the size of the stomach causing a feeling of fullness after eating a small amount of food allowing patients to lose significant amounts of weight. The surgery costs between €12,000 and €15,000 and at the time it was cancelled, 180 patients were on a waiting list for surgery. All those patients could have had their surgery for less than €2.5 million.

Without that surgery, morbidly obese patients will not lose weight and will ultimately suffer from health complications and die. The same argument could be made about many services provided by the HSE which have been cut in recent years.

But instead of spending money on these operations – or other interventions – the money will go to Alexion, whose founder and chief executive, Leonard Bell, makes around €12 million per year in salary, stock options and benefits. He helped develop the Soliris drug, and helped with the submission to get it regulated and approved for use in 2007.

While one could argue that a company that pays its chief executive such a princely sum could certainly charge a little less for its drug, Alexion could equally argue that without Professor Bell, eculizumba (Soliris) might never have been developed at all, and the patients who are currently benefitting from the drug would not be alive in any case.

For the beleaguered HSE, it’s another case of on the one hand they lose, while on the other hand, they can’t win. The cost of medicine is spiralling and medical inflation continues to rise at a much higher rate than general inflation.

Technological and medical advances mean that there will likely be more and more treatments and therapies coming available at prices that have no set ceiling in terms of government policy.

Irish patients’ lives are in the balance when the HSE attempts to negotiate prices for these new treatments, and the truth is that they are on a hiding to nothing in these negotiations. They either let the patient die – or spend so much money on treatment that other services suffer because the high cost means cutbacks elsewhere.

Because of the small number of patients who need this drug, the cost of Soliris to the HSE will not make a huge difference to its overall budget, but it does show the weakness of government bodies when trying to negotiate the cost of life-saving health treatments.

As one purchaser, Ireland has very little negotiating power. It has even less when the company in question has an Irish operation with significant employment which can easily be moved elsewhere.

The government negotiates with such companies like the undertaker does with the bereaved – that is, with the assurance that whatever happens, the other person has to make a purchase. Given that the government has little choice in purchasing the drug to keep several of its citizens alive, the price is determined as much by what the figure that government and the public can swallow, rather than any notion of market value or fairness.

But as the government moves to Universal Health Insurance and seems to tax everything that moves, the question which needs to be asked is at what price point the HSE could or would say ‘No’. And do some patients with different conditions have a lesser right to treatment than others do to drugs?

This post was originally published in the Sunday Independent here.


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