Given the dramatic impacts of coronavirus on our daily lives — killing tens of thousands and shutting down hundreds of thousands of businesses — most Americans would find it unthinkable to deny patients access to COVID-19 treatments on the grounds of cost. But that is just what presumptive Democratic nominee Joe Biden proposes to do. It is simply the latest in a long string of examples of how the left’s support for centralized health care will harm patients and the economy.
Gilead Sciences recently announced pricing plans for its new coronavirus treatment named remdesivir. It set the price for the drug at $3,120 for a five-day course of treatment; government payers will pay roughly one-third less than that ($2,340), in another case of individuals with private insurance subsidizing those on Medicare and Medicaid.
For a drug that reduces the length of virus-related hospital stays, Gilead’s price sounds like good value for patients and insurers. But the bureaucrats Biden wants to place in charge of health care won’t necessarily agree.
Biden’s campaign health-care plan calls for “establishing an independent review board to assess pharmaceuticals’s value,” based on either the therapy’s price overseas “or, if the drug is entering the U.S. market first … an evaluation by independent board members.” Medicare and Obamacare plans will pay the rate set by these “independent” bureaucrats.
Yet consider the way one such board determined prices for remdesivir. According to a National Institutes of Health study, the drug reduced the average hospital stay for COVID patients by four days compared to individuals who did not receive the drug. Additionally, although the changes were not statistically significant, it also reduced death rates slightly.
Remdesivir’s manufacturer, Gilead Sciences, donated nearly 1 million courses of the drug, which the federal government and hospitals will distribute to patients (the prices Gilead set will take effect when hospitals run out of the donated doses in the next few weeks).
Two days after National Institutes for Health reported its results, the Institute for Clinical and Economic Review, which conducts cost-effectiveness research on new pharmaceuticals, released a preliminary pricing analysis for remdesivir. It arrived at a maximum value of $4,460 for a full treatment course if remdesivir reduces mortality in coronavirus patients, and $390 if it does not. A revised analysis, released in late June, slightly increased remdesivir’s maximum value ($4,580-$5,080) if it reduces mortality, and slightly decreased its value ($310) if it does not.
‘Economic’ Institute Excludes Economic Impact Analysis
The glaring omissions in ICER’s analysis, however, reveal an organization that knows the price of everything and the value of nothing. The institute assumed “that policymakers would view it inappropriate” to include “potential broader economic benefits associated with future economic recovery” in its pricing.
Likewise, an updated document regarding assessments of coronavirus treatments states that “the scale of the COVID-19 pandemic makes it impossible to model the impact of patient treatment on economic factors such as unemployment, taxes, [and] education” and that it would only attempt to quantify economic benefits for “a universally effective vaccine or a near/total cure.”
Despite a name that states the institute engages in economic review, ICER shows a callous indifference towards the more than 46 million people who have filed for unemployment since the pandemic began. That a drug like remdesivir might help end coronavirus lockdowns and other social distancing measures, restoring normalcy to a nation severely affected by the virus, doesn’t apparently matter to the ICER bean-counters.
The problems with ICER’s analysis don’t end there. One of its models “set the costs of research and development to zero” because Gilead had previously developed remdesivir as a Hepatitis C drug — ignoring the costs needed to determine whether and how a Hepatitis drug might treat coronavirus. Moreover, by reducing hospital stays by an average of four days, remdesivir would save the health system money at a price well above $310—and perhaps even above $5,080.
Life and Death Access to Treatments
Both ICER’s analyses and the premise behind them seem fundamentally flawed, yet Biden wants to impose them on American patients. His “solutions” would limit access to breakthrough therapies — either because companies will refuse to sell to government programs at the prices bureaucratic boards dictate, or because these price controls mean companies will develop fewer such drugs to begin with.
For patients with critical illnesses, restricting access to drugs could become a matter of life and death. But Biden’s plan could restrict access to coronavirus therapies in a way that becomes a matter of life and death not just for millions of Americans, but the economy as well.