Lede, buried: Insulin

Reginald Denny and Mary Astor in Oh, Doctor! (1925), by Henry A.Pollard.

Once upon a time diabetes was a fairly quickly executed, though exceedingly painful, death sentence, and then once upon a more recent time, starting at the beginning of the 20th century, scientists began figuring out how it worked, and developed effective treatments, culminating in the late 1930s with the development of insulin derived from pig or cow pancreata, which enabled patients to control their own symptoms.

Then in the 1970s, with the development of recombinant DNA technology, it became possible to manufacture a synthetic human insulin, which might have worked better in some cases, and was more expensive and hence profitable for the manufacturer, with the upshot that today in the United States the older animal insulin is no longer available and now we have patients dying because they can't afford the $400 a month it costs to treat it with the newer product. This according to an NPR story from this morning reporting on research by Jeremy Greene and Kevin Riggs published this week in the New England Journal of Medicine:

ANDERS KELTO, BYLINE: Dr. Jeremy Greene sees a lot of patients with diabetes.

JEREMY GREENE: Diabetes that is really just out of control, with their glucoses very, very high - sometimes so high that you can't even record the number on the glucometer.

KELTO: And the reason they can't control their blood sugar, they tell him, is that insulin is too expensive.

The situation is likely to be mitigated soon, because the FDA has approved production of a "biosimilar" insulin that could reduce the cost by up to 40%, but not as much as the use of animal insulin (which is not less effective than synthetic human insulin in most cases; in fact it's often more effective), up to 80%. And this does not happen everywhere; Canadian patients, for example, can get animal insulin (of course it's the single payer, the government, that gets the money saving).

The thing that got to me was this exchange:

KELTO: ...Jeremy Greene says it's not fair to blame industry for all of this.

GREENE: We don't believe that there is a conspiracy to keep insulin expensive.

KELTO: But he points out a problem. There's a huge demand for low-cost insulin, and yet there's no supply. 

Well, it's not the spontaneous vagaries of the magical market, because that's not how the magical market is supposed to work, right? Don't products just arise whenever there's an urgent demand for them?

A more useful approach says you can blame the industry without alleging a conspiracy. As Elizabeth Rosenthal was putting it in the not-altogether-Marxist New York Times, in October 2013,

Thanks in part to the $250 million last year spent on lobbying for pharmaceutical and health products — more than even the defense industry — the government allows such practices. Lawmakers in Washington have forbidden Medicare, the largest government purchaser of health care, to negotiate drug prices. Unlike its counterparts in other countries, the United States Patient-Centered Outcomes Research Institute, which evaluates treatments for coverage by federal programs, is not allowed to consider cost comparisons or cost-effectiveness in its recommendations. And importation of prescription medicines from abroad is illegal, even personal purchases from mail-order pharmacies.

“Our regulatory and approval system seems constructed to achieve high-priced outcomes,” said Dr. Peter Bach, the director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center. “We don’t give any reason for drug makers to charge less.” And taxpayers and patients bear the consequences.

So who needs all the bother and complexity of a conspiracy, when you can openly pay the legislature to keep the market unregulated so it can work its magic without interference? I mean, not to allocate resources to all in the most efficient possible way—that's just the theory—but rather to concentrate them all in the hands of a monopolistic few?

Marion Davies and Billy Haines in Kng Vidor's Show People (1928).

Bonus intellectual fraud, from a Heritage Foundation backgrounder of July 2013:

Japan has an unusually healthy population with the lowest obesity rates in the Organisation for Economic Co-operation and Development (OECD) and very low rates of crime, divorce, teenage births, drug use, vehicle accidents, and HIV infection.[12] Nonetheless, universal insurance coverage is failing to guarantee adequate access to care for all members of the community, and attempts to control costs with price controls have caused much of the health care system to break down.[13]

The consequences of Japanese price regulation have been summarized as “cheap stuff is profitable and expensive stuff is unprofitable. A doctor who sees a few extra patients and prescribes drugs for them makes money; coronary bypass surgery at an urban hospital loses money.”[14] Even though the Japanese are four times less likely than Americans to suffer heart attacks, they are twice as likely to die from them.[15]

Note 13 there is to a paper that says nothing whatever about attempts to control costs with price controls. It is entirely about the issues of pre-hospital and emergency care and argues that these areas need to be put under more centralized control under a single government employee, the local EMS director. More generally,

The Japanese healthcare system needs to adopt an efficient medical control organization to ease the strain on existing healthcare professionals and to increase the number of physicians and other healthcare resources. Rather than continuing to depend on healthcare professionals being able and willing to make personal sacrifices, the government, the public and medical societies must cooperate and support changes in the healthcare system.

Note 14 refers to a paper of 1994 by Victor Rodwin of which half (including the relevant chapter "Lessons for the United States") is strangely missing, but we can guess what it might say from the lessons for the United States Rodwin gleaned from a more recent study (2003) of the French healthcare system:

Lessons for the United States include the importance of government’s role in providing a statutory framework for universal health insurance; recognition that piecemeal reform can broaden a partial program (like Medicare) to cover, eventually, the entire population; and understanding that universal coverage can be achieved without excluding private insurers from the supplementary insurance market.

Lessons that have all been somewhat applied in the design of the Affordable Care Act.

Note 15 cites an Economist article from September 2011 that begins:

THE Japanese spend half as much on health care as do Americans, but still they live longer. Many give credit to their cheap and universal health insurance system, called kaihoken, which celebrates its 50th anniversary this year. Its virtues are legion. Japanese people see doctors twice as often as Europeans and take more life-prolonging and life-enhancing drugs. Rather than being pushed roughly out of hospital beds, they stay three times as long as the rich-world average. Life expectancy has risen from 52 in 1945 to 83 today. The country boasts one of the lowest infant-mortality rates in the world. Yet Japanese health-care costs are a mere 8.5% of GDP. 

Even so, the country's medical system is embattled.

It's not all that embattled, you see. It's the same crisis that's been going on for over 20 years. It's really not much of a crisis, and it never gets any worse.

And yes, there are some worries, but Heritage can make its case only by lying about it in the most absurd and easily dismissed ways. Is it worse than the stuff they used to put out before Jim DeMint began converting Heritage into a pure propaganda organ of the Republican party in April 2013? It's certainly as fraudulent a piece of dreck as anything I've seen.