One Frightening Reason Why Market-based Healthcare is a Poor Choice

[Winstonm]

A healthcare crisis is unfolding and the main method to change this outlook refuses to get involved because of market factors. http://www.pbs.org/wgbh/pages/frontline/health-science-technology/hunting-the-nightmare-bacteria/transcript-51/. Untreatable or very nearly untreatable bacteria are gaining ground, and the drug companies that create new drugs have no incentive to invest in R&D for new antibiotics as the ROI is not nearly high enough when compared to other drugs.

 

It is simple. Antibiotics are designed to be used on a limited basis for only a few days or weeks. When the bacteria is eliminated, the treatment ends. Why invest hundreds of millions of dollars into a new type antibiotic when other drugs that are used for chronic disease are so much more profitable?

 

As of 2013, Pfizer was the only drug company still actively developing new antibiotics. Meanwhile, resistant bacteria a outpacing the research. There are now some strains of bacteria that are virtually untreatable. There are few new antibiotics because it's not profitable to invest in those drugs.

 

When do we abandon the market-based healthcare model - after the next Black Plague - assuming we survive, that is?

 

Dr. JOHN REX: If you need an antibiotic, you need it only briefly. Indeed, that’s the— that’s the correct way to use an antibiotic. You use it only briefly.

 

And from an economic standpoint of a developer, that means you’re not— you’re not getting the return on the investment you’ve made because you’ve spent between $600 million and a billion dollars to bring that new antibiotic to market.

 

DAVID E. HOFFMAN: Wait. You mean it costs up to a billion dollars to bring a new drug to market?

 

Dr. JOHN REX: It can easily cost up to a billion dollars to bring a new drug to the market. And the initial reaction to it is, “That’s great, and let’s not use it. Let’s use it as little as possible.”

 

Dr. BRAD SPELLBERG: So here’s a large company saying, “I have— I can make billions off cholesterol drugs, blood pressure drugs, arthritis drugs, dementia, things that I know patients are going to have to take every day for the rest of their lives. Why would I put my R&D dollars into the antibiotic division, that isn’t going to make me any money, when I can put it over here, that’s going to make a lot of money for the company? I answer to the shareholders.”

[mike777]

Let us not forget the gbillions/trillions of dollars the goverment spends on basic research over the years.

 

Not for the first time Winston presents evidence that basic research needs a reboot.

 

I have often in these forums presented Talib's options regarding this subject.

 

I simplify his basic idea, smaller amounts of money on many more projects. He assumes the money is going to spent one way or another.

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I should note I have long advocated for one huge exception when it comes to cost/ of GDP/budget, the space program. The reason being the savior/future of mankind being off planet. I understand many/many disagree.

[MrAce]

Let us not forget the gbillions/trillions of dollars the goverment spends on basic research over the years.

 

Not for the first time Winston presents evidence that basic research needs a reboot.

 

I have often in these forums presented Talib's options regarding this subject.

 

I simplify his basic idea, smaller amounts of money on many more projects. He assumes the money is going to spent one way or another.

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I should note I have long advocated for one huge exception when it comes to cost/ of GDP/budget, the space program. The reason being the savior/future of mankind being off planet. I understand many/many disagree.

 

At least you did not suggest to get rid of antibiotics this time. (at least not yet) http://www.bridgebase.com/forums/public/style_emoticons/default/tongue.gif

[helene_t]

If a one week antibiotic cure has the same impact on life expectancy as a permanent diabetes treatment theni insurers/patients/govt should be willing to pay the same for it.

 

So the problem is not the market per se. Maybe the low hanging fruit has just been picked. But if you want a cynical explanation here is one: antibiotics are easy to test so you can't get rich selling snake oil antibiotics. This is different with cancer treatments for example.

[Mbodell]

If a one week antibiotic cure has the same impact on life expectancy as a permanent diabetes treatment theni insurers/patients/govt should be willing to pay the same for it.

 

So the problem is not the market per se. Maybe the low hanging fruit has just been picked. But if you want a cynical explanation here is one: antibiotics are easy to test so you can't get rich selling snake oil antibiotics. This is different with cancer treatments for example.

 

But companies aren't always interested in providing the better treatment. For instance, if you make more money on an inferior treatment, sometimes it can take a long time to adopt a superior treatment when the superior treatment doesn't involve high monopoly pricing. (see canonical ulcer example - it took more than 10 years to "market" correct that one, around 20 to get the Nobel prize).

[Winstonm]

This Frontline episode was an eye-opener for me as it showed that the battle is being lost against antibiotic resistance, and new antibiotics are not being sought as the return on investment for the drug companies does not justify the expenditure.

[blackshoe]

Dr. BRAD SPELLBERG: So here’s a large company saying, “I have— I can make billions off cholesterol drugs, blood pressure drugs, arthritis drugs, dementia, things that I know patients are going to have to take every day for the rest of their lives. Why would I put my R&D dollars into the antibiotic division, that isn’t going to make me any money, when I can put it over here, that’s going to make a lot of money for the company? I answer to the shareholders.”

What shareholders? There were no antibiotics, so they all died. B-)

[mike777]

This Frontline episode was an eye-opener for me as it showed that the battle is being lost against antibiotic resistance, and new antibiotics are not being sought as the return on investment for the drug companies does not justify the expenditure.

 

If only nonprofit research hospitals, NIH, or nonprofit foundations or university research labs were made aware of this.

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btw antibiotics do not work against a virus. A virus can and does kill. I should note the battle is often lost versus the virus, people die.

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btw2 I am surprised that the governments in Europe, China, Russia and Canada who have centrally run NHS are not aware and solving this issue. Hopefully they are aware now.

[Winstonm]

If only nonprofit research hospitals, NIH, or nonprofit foundations or university research labs were made aware of this.

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btw antibiotics do not work against a virus. A virus can and does kill. I should note the battle is often lost versus the virus, people die.

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btw2 I am surprised that the governments in Europe, China, Russia and Canada who have centrally run NHS are not aware and solving this issue. Hopefully they are aware now.

 

Did you have a point to make?

[Winstonm]

What shareholders? There were no antibiotics, so they all died. B-)

 

So are you in agreement that in the case of treating bacteria our reliance on pure market-driven motives could lead to disaster?

[Vampyr]

So are you in agreement that in the case of treating bacteria our reliance on pure market-driven motives could lead to disaster?

 

He probably thinks of it In terms of survival of the fittest.

 

Anyway, antibiotic resistance has been such a huge problem for so long, and it is saddening to learn that one reason bacteria are winning the arms race is that pharmaceutical companies don't find antibiotics to be as big a money maker as their shareholders demand.

 

But this may not be the end of the story. Quite possibly this arms race is one that we are destined ultimately to lose, and a radical new approach is needed. For example, work is being done in immunotherapy treatments for cancer, ie teaching the immune system itself to attack enemy cells. Perhaps this research can eventually be applied to killing bacteria, or similar work is already being done in that field.

[Zelandakh]

btw2 I am surprised that the governments in Europe, China, Russia and Canada who have centrally run NHS are not aware and solving this issue. Hopefully they are aware now.

Other countries have been aware of the issue for a very long time now, so long that I find it inconceivable that Americans are only just hearing about it. Perhaps you are confused here about the different roles of a national health service and a drugs company. It is like expecting Ford to cure world hunger because they provide vehicles that distributes some of the food supplies.

[mike777]

Other countries have been aware of the issue for a very long time now, so long that I find it inconceivable that Americans are only just hearing about it. Perhaps you are confused here about the different roles of a national health service and a drugs company. It is like expecting Ford to cure world hunger because they provide vehicles that distributes some of the food supplies.

 

Perhaps.

 

The role of govt run health care does indeed seem confusing. We are often told they run health care, the health care industry includes a very wide variety of things from garbage pick up, maintaining buildings to drug research. It is not just your local family doc. IN any case clearly your analogy with Ford does not hold up and is incorrect. If for no other reason see the Ford Foundation and the money it provides for research

 

I certainly admit I am not sure exactly the full extent and control/influence China, Russia, Europe and Canada play in drug research.

 

Clearly posters here seem to have placed zero blame in their posts on nonprofit research(btw which does include the Ford foundation) or govt funded research/ govt mandated regulations regarding drug research and all the blame on capitalism. They blame capitalist for being capitalists. :)

[Winstonm]

Perhaps.

 

The role of govt run health care does indeed seem confusing. We are often told they run health care, the health care industry includes a very wide variety of things from garbage pick up, maintaining buildings to drug research. It is not just your local family doc.

 

I certainly admit I am not sure exactly the full extent and control/influence China, Russia, Europe and Canada play in drug research.

 

Clearly posters here seem to have placed zero blame in their posts on nonprofit research or govt funded research/ govt mandated regulations regarding drug research and all the blame on capitalism. They blame capitalist for being capitalists. :)

 

No, the posters are pointing out that "one size fits all" thinking is too narrow of foundation. Capitalism and free markets are fine but it is narrow thinking to suggest that the free market approach can and should be used to solve all human problems, just as it is silly to suggest that the government can and should solve all human problems.

[mike777]

No, the posters are pointing out that "one size fits all" thinking is too narrow of foundation. Capitalism and free markets are fine but it is narrow thinking to suggest that the free market approach can and should be used to solve all human problems, just as it is silly to suggest that the government can and should solve all human problems.

 

 

Agree see my first post in this thread which talks about this main point.

[Winstonm]

Agree see my first post in this thread which talks about this main point.

 

But Mike, you said posters were blaming capitalists for being capitalists. This is inaccurate. Posters are blaming faulty use of capitalism.

[Vampyr]

But Mike, you said posters were blaming capitalists for being capitalists. This is inaccurate. Posters are blaming faulty use of capitalism.

 

"Faulty use of capitalism"? What on earth is that?

[Vampyr]

Agree see my first post in this thread which talks about this main point.

 

Well, it probably talks about something.

 

Posting whilst sober works well for many people. Perhaps you should try it sometime.

[onoway]

Glyphosates, the primary ingredient of RoundUp and other chemical mixtures used intensively in agriculture around the world, and pushed hard by both companies and governments, is patented as an antibiotic. The residues of these chemicals are present in food.

 

Read yesterday that someone in Harvard has found an antibiotic to end the struggle, nothing can resist it. Monsanto got initial approval by assuring government bodies that nothing would develop resistance to the chemicals they were using, and of course all sorts of things have, from insects to amaranth. Someone recently pointed out it's called evolution. So when this new antibiotic is released for use, who knows what will develop as a reaction to it? We do insist on trying to find simple "ultimate" solutions to issues, and can't seem to catch on that there are none.

 

We can't even impose the long term consistent behaviour we want from other people, from family members to nations, even with bullets bombs and torture, it boggles my mind that we persist in thinking we can impose our will without regard to the consequences on natural systems.

 

I'm not saying there isn't a use for them nor that I think we shouldn't be looking for them. But until we stop being stupid about how we use them it's not likely to work out well, is all.

[Winstonm]

"Faulty use of capitalism"? What on earth is that?

 

Using capitalism when socialism would work better.

[onoway]

As far as health care goes; unless we go to the practice of paying doctors as long as you are healthy,NOT when you are sick, the focus will continue to be the treatment of symptoms rather than causes, and the development of more drugs. Many of these apparently deal relatively effectively with the symptoms but may have rather severe side effects. An antibiotic given to heal a small wound, according to the sheet provided with it, may in effect cause your liver to shut down several weeks later. Then of course there are the recalls.. such as drugs that help with arthritis pain but cause fatal (or not) heart attacks...

 

This isn't health care, whatever else it may be. But it is immensely profitable for the drug companies.

[Vampyr]

Using capitalism when socialism would work better.

 

Drug companies are not "using" capitalism or socialism or any other ism. They were set up to make money, and confusion sets in when people suppose that their purpose is instead to save the world.

 

It does feel a bit icky, just like for-profit hospitals or insurance companies in the US becoming wealthy by effectively skimming off a healthy slice of all transactions between patient and provider.

 

In any case, onoway is of course correct that the focus of a healthcare system should be preventative medicine. Systems such as single-payer ones do attempt to focus on this, because they have to try to minimise future costs. In places with other kinds of systems, it seems like future costs are neutral or a good thing.

[Winstonm]

Drug companies are not "using" capitalism or socialism or any other ism. They were set up to make money, and confusion sets in when people suppose that their purpose is instead to save the world.

 

It does feel a bit icky, just like for-profit hospitals or insurance companies in the US becoming wealthy by effectively skimming off a healthy slice of all transactions between patient and provider.

 

In any case, onoway is of course correct that the focus of a healthcare system should be preventative medicine. Systems such as single-payer ones do attempt to focus on this, because they have to try to minimise future costs. In places with other kinds of systems, it seems like future costs are neutral or a good thing.

 

Our health system is based on a capitalistic model - socialized medicine seems a better method.

[Vampyr]

Our health system is based on a capitalistic model - socialized medicine seems a better method.

 

Well, the only thing you can do about that is get active politically. This will have little effect, however, on how pharmaceutical companies work, although a single-payer system can obtain lower rates. A relative of mine has the same prescription filled privately (ie, not on the NHS) in London and also sometimes in the US, where his prescriptions are not covered by any insurance either. The price in London is about 15% of the US cost. This disparity probably is due to the cut insurance companies usually get in the US.

[barmar]

If the socialized medical system just means that the government pays the bills, that doesn't change the incentives of the medical institutions themselves. The government also needs to be able to control the prices that the institutions charge, or set the way they're paid (e.g. by results, not by treatments, or perhaps just some flat rates that all the instututions receive), or go all the way and nationalize the entire medical industry.