American Shouldn't Import Failed Health Care Policies

Published in the New Jersey Sunday Herald, November 23, 2008

Last month, Great Britain's health care watchdog ruled that four new kidney cancer drugs shouldn't be covered by the National Health Service.  The agency decided these drugs aren’t worth the cost, even though they are widely prescribed by cancer experts worldwide and may offer the last hope for many British cancer patients.

While this news went relatively unnoticed in the United States, Americans should take note. Congress is currently considering legislation to create a similar watchdog agency. And if we're not careful, the U.S. government could be rendering similar decisions.

Britain's National Institute for Health and Clinical Excellence (NICE) is the government body in charge of deciding, among other things, which treatments should be covered by the NHS. NICE reviews clinical trial data to make its own decisions about whether new state-of-the-art drugs are any more effective than lower-priced alternatives. If it decides the newer drugs aren't sufficiently better, NHS doesn't cover them.

While NICE is supposed to be a guardian of taxpayer funds to make sure NHS dollars are spent wisely, the unintended consequences of its decisions have been devastating to many patients. The recent decision involving kidney cancer drugs is one in a long line of cases where British patients were forced to go without treatment or pay totally out of pocket because of NICE's decisions.

In 2006, for instance, NICE decided the Alzheimer's drug Aricept was too costly to cover for all patients. This left tens of thousands of Alzheimer's sufferers without access to a drug that was readily available in other parts of Europe and in the United States. The decision was ruled "procedurally unfair" by Britain's Court of Appeal, but the NHS ban remains in effect in places where local governments haven’t overridden it.
 
Despite these health care horror stories, some American lawmakers are eager to adopt this system. In August, Sens. Max Baucus (D-Mont.) and Kent Conrad (D-N.D.) proposed a bill that would create an American agency in the mold of NICE to gauge the comparative effectiveness of different treatments.

Like its British doppelganger, the new American institute would evaluate how different treatments compare to one another.  The goal would be to lower U.S. health costs by identifying which treatments are useful and which are wasteful.

But this plan could easily backfire. If this new agency concluded that a treatment, like the kidney cancer drug Sutent, wasn't worth its high price tag, lawmakers could very well decide that patients who rely on Medicare, Medicaid, or other government-funded programs shouldn't receive the drug.  Private insurance companies likely would follow suit. 

The result would severely curtail research and development into innovative medical treatments.  Investors would be leery of funding the research if they believed government officials could keep new products from the market – after they have been proven clinically effective.

This should make us wary of too much government involvement in the health care system. When the government picks up the tab, patients forfeit the freedom to decide which treatments they receive. Government-imposed one-size-fits-all medicine simply would not work in a country with 300 million people.

Every physician knows that some drugs work well for some patients and not for others.  Doctors need a variety of drugs so they can find the ones that provide the best treatment with the fewest side effects for their patients. 

It is often the newest and most effective drugs that are scratched off the list by agencies such as NICE. 

We can see the effects of bureaucratic decision-making right here at home in the health insurance program administered by the Department of Veterans Affairs.

The VA has a list of allowed drugs, called a “drug formulary,” that contains only 194 of America's 300 most-prescribed drugs. Of the 132 brand-name drugs on the top-300 list, just 56 are on the VA formulary. Patients with private health insurance, meanwhile, have access to nearly all 300 drugs. 

Even in Medicare, where the drug benefit is administered by private health plans, a wide variety of drugs are available.  Under the most popular plan, 282 of the top 300 drugs are covered on the formulary. For brand-name drugs, 128 of 132 are covered.

Politicians who say the government can make better decisions than doctors about drugs should take a careful look at the serious problems that arise when cash-strapped government agencies gain control over health care choices.

American lawmakers are right to try to curb health spending and increase access to affordable medical care. But the serious problems facing government-run health systems should be more fully considered before America adopts a centralized British-style bureaucracy.

Grace-Marie Turner is president of the Galen Institute, a non-profit research organization focusing on free-market solutions to health reform. She can be reached at P.O. Box 320010, Alexandria, VA, or at turner@galen.org.
 

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Published in the New Jersey Sunday Herald, November 23, 2008

Last month, Great Britain's health care watchdog ruled that four new kidney cancer drugs shouldn't be covered by the National Health Service.  The agency decided these drugs aren’t worth the cost, even though they are widely prescribed by cancer experts worldwide and may offer the last hope for many British cancer patients.

While this news went relatively unnoticed in the United States, Americans should take note. Congress is currently considering legislation to create a similar watchdog agency. And if we're not careful, the U.S. government could be rendering similar decisions.

Britain's National Institute for Health and Clinical Excellence (NICE) is the government body in charge of deciding, among other things, which treatments should be covered by the NHS. NICE reviews clinical trial data to make its own decisions about whether new state-of-the-art drugs are any more effective than lower-priced alternatives. If it decides the newer drugs aren't sufficiently better, NHS doesn't cover them.

While NICE is supposed to be a guardian of taxpayer funds to make sure NHS dollars are spent wisely, the unintended consequences of its decisions have been devastating to many patients. The recent decision involving kidney cancer drugs is one in a long line of cases where British patients were forced to go without treatment or pay totally out of pocket because of NICE's decisions.

In 2006, for instance, NICE decided the Alzheimer's drug Aricept was too costly to cover for all patients. This left tens of thousands of Alzheimer's sufferers without access to a drug that was readily available in other parts of Europe and in the United States. The decision was ruled "procedurally unfair" by Britain's Court of Appeal, but the NHS ban remains in effect in places where local governments haven’t overridden it.
 
Despite these health care horror stories, some American lawmakers are eager to adopt this system. In August, Sens. Max Baucus (D-Mont.) and Kent Conrad (D-N.D.) proposed a bill that would create an American agency in the mold of NICE to gauge the comparative effectiveness of different treatments.

Like its British doppelganger, the new American institute would evaluate how different treatments compare to one another.  The goal would be to lower U.S. health costs by identifying which treatments are useful and which are wasteful.

But this plan could easily backfire. If this new agency concluded that a treatment, like the kidney cancer drug Sutent, wasn't worth its high price tag, lawmakers could very well decide that patients who rely on Medicare, Medicaid, or other government-funded programs shouldn't receive the drug.  Private insurance companies likely would follow suit. 

The result would severely curtail research and development into innovative medical treatments.  Investors would be leery of funding the research if they believed government officials could keep new products from the market – after they have been proven clinically effective.

This should make us wary of too much government involvement in the health care system. When the government picks up the tab, patients forfeit the freedom to decide which treatments they receive. Government-imposed one-size-fits-all medicine simply would not work in a country with 300 million people.

Every physician knows that some drugs work well for some patients and not for others.  Doctors need a variety of drugs so they can find the ones that provide the best treatment with the fewest side effects for their patients. 

It is often the newest and most effective drugs that are scratched off the list by agencies such as NICE. 

We can see the effects of bureaucratic decision-making right here at home in the health insurance program administered by the Department of Veterans Affairs.

The VA has a list of allowed drugs, called a “drug formulary,” that contains only 194 of America's 300 most-prescribed drugs. Of the 132 brand-name drugs on the top-300 list, just 56 are on the VA formulary. Patients with private health insurance, meanwhile, have access to nearly all 300 drugs. 

Even in Medicare, where the drug benefit is administered by private health plans, a wide variety of drugs are available.  Under the most popular plan, 282 of the top 300 drugs are covered on the formulary. For brand-name drugs, 128 of 132 are covered.

Politicians who say the government can make better decisions than doctors about drugs should take a careful look at the serious problems that arise when cash-strapped government agencies gain control over health care choices.

American lawmakers are right to try to curb health spending and increase access to affordable medical care. But the serious problems facing government-run health systems should be more fully considered before America adopts a centralized British-style bureaucracy.

Grace-Marie Turner is president of the Galen Institute, a non-profit research organization focusing on free-market solutions to health reform. She can be reached at P.O. Box 320010, Alexandria, VA, or at turner@galen.org.
 

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