Yesterday the FDA approved a drug treatment for hemophilia B that costs $3.5 million per patient (story here).
That’s not necessarily a ripoff by the drug maker. Developing new drugs is expensive, especially gene therapies, which this is.
And drugs for rare diseases, lacking a mass market, usually have to be subsidized by somebody or they won’t be available. Hemophilia B is a rare disease.
CNN says, “About 1 in 40,000 people have the disease, most of whom are men.” Probably few, if any, of those patients can pay for this out of pocket, which means either insurance or government will pick up the tab. That’s how society pays for really expensive things, from suspension bridges to disaster relief, by spreading a big cost over many contributors.
If we all kicked in equally to help hemophilia B patients pay for this — via taxes or insurance premiums — then dividing 40,000 into $3.5 million has each of us paying $87.50. (Of course, that’s not how cost-spreading works in real life, where social costs seldom if ever are equally distributed. This article is a thought exercise.)
And if you think hemophilia B patients are unfairly getting a free ride, consider this: First, nobody asks to have this disease. Second, side effects of the new drug treatment include “high liver enzymes, headaches, flu-like symptoms and mild infusion-related reactions.” How would you like that? You should be glad you’re not one of the patients; they’d be happy to let you take their place.
Inevitably this leads into whether we should pay at all. Isn’t this their problem? For some people paying $87.50 for a stranger’s medical care is food off the table, a utility bill that doesn’t get paid, taking school clothes away from the kids. If you have to pay for this, who’s going to pay your bills? These are all fair questions. So is this: What if you’re the stranger who needs the treatment, or your child is?
Cost-spreading is based on insurance principles. The needs of a few are shared by many, so we’re all protected if it happens to us. Our house may never burn down, but by paying for fire insurance, we won’t suffer a devastating financial loss if it does. This helps us all sleep at night.
We’re also paying for progress. New things often are expensive at first, and unless we share costs, they won’t happen. Suppose antibiotics were never developed, because nobody was willing to pay for developing them. Most of us would live short lives, and die from infections. Maybe we can’t afford to be selfish.