Should a government body have the power to decide if a drug or treatment is too expensive for a sick patient?
September 11, 2019
By Brett Healy and Chris Rochester
Rising prescription drug prices have public policy makers searching for a solution. That includes Gov. Tony Evers, who recently announced an executive order creating a task force aimed at reducing the cost of drugs.
While a worthwhile goal, Gov. Evers and members of his task force should be wary of embracing a new inhumane, socialist drug rationing policy that has taken hold in other states and countries.
To “control” the amount of money the government spends on drugs, a dollar value is assigned to each remaining year of a sick patient’s life. This methodology is formally known as a “quality-adjusted life year (QALY).”
QALY attempts to to calculate the incalculable – how much an additional year of life for a sick person seeking treatment is worth to society.
This clinical and heartless approach to making life-and-death decisions has found an advocate in an American organization called the Institute of Clinical and Economic Review (ICER).
Whether the cost to cover a certain drug would exceed the value to society of a patient living one more year is determined not by you or your doctor, but by a cost-versus-benefit analysis and a quality-adjusted life year calculation.
How much is another year of life worth to you? Better hope the QALY calculation matches up with your number.
As a MacIver policy brief recently noted, serious questions and grave concerns surround the effectiveness and basic ethics of the QALY approach.
In their pursuit of lower drug costs, some U.S. states and companies have adopted ICER’s inhumane model.
For example, New York’s Medicaid program recently used an ICER review to determine whether the state should pay for Orkambi, an expensive and new cystic fibrosis treatment. According to ICER’s calculations, the cost of the Orkambi drugs were not worth the extra life those drugs would buy for certain Medicaid patients and denied them access to the treatment.
Maine has created a “Prescription Drug Affordability Board,” similar to Evers’ new task force, with a mandate “to determine prescription drug spending targets for public entities based on a 10-year rolling average, accounting for inflation with spending reductions.” The program flirts with ICER-style price controls.
The efforts of New York and Maine are in large part an attempt to reduce the price of drugs and amount of public money spent on drugs in their state Medicaid programs. That is also a goal of the Evers’ task force. As the Governor’s executive order notes, prescription drugs are estimated to cost Wisconsin residents $1.3 billion in 2019, with Medicaid footing $400 million of that bill.
Let’s hope Gov. Evers and his task force aren’t seduced down this dark path by the ICER model.
Private sector insurers are joining the act, too.
CVS Caremark, a prescription benefit management company, announced last year it will begin using ICER data and a hard $100,000 quality-adjusted life year cap to determine which drugs its plan will cover. That means if a drug’s quality-adjusted life year value is less than $100,000, it will not be covered by CVS Caremark. Just $100,000.00.
But the value of life should be a decision made by the patient and his/her doctor. Not bureaucrats putting together a spreadsheet of callous calculations.
The QALY approach originated in the socialized medical systems of countries like the United Kingdom. The U.K.’s system has been a constant source of controversy with sometimes tragic results. In 2015 for example, the U.K.’s price control mechanism led to the withdrawal of funding for 25 oncology treatments. That likely cut short the lives of 8,000 cancer patients.
ICER and the QALY method attempt to calculate the worth of a person’s remaining years of life. But that dollar amount doesn’t account for the human element—the value of seeing a grandchild born, the joy of seeing your child graduate from college or the precious extra time treatment can give you, even if it is only a few more years, to spend with your loved ones.
While the cost of drugs is certainly a serious concern, free market advocates, and humans in general, worry that efforts to control drug costs based on a cost-benefit analysis of certain therapies will literally lead the government to make life or death decisions for us.
That should scare all of us to death.