The Avastin Controversy
Avastin is a very expensive drug that extends the lives of late-stage breast cancer patients. It can cost up to $90,000 per year for the treatments. The New York Times say’s it’s the best-selling cancer drug in the world. An initial study demonstrated that 52% of women treated with the drug gained improved life expectancies, ranging from five and a half months to several years in some cases. Later studies downgraded the estimated effectiveness to between 31% and 36% of patients. As the Washington Examiner points out in an editorial from earlier this week, that’s better than 100% of them experiencing the alternative.
Last summer, the Food and Drug Administration stunned cancer doctors and patients by suddenly declaring that Avastin has no “clinically meaningful results.” Meanwhile, the European Union’s version of the FDA approved Avastin as an effective treatment.
Many have come to suspect this was actually the first judgment from an ObamaCare Death Panel – an attempt to ration a very expensive form of care, by rather absurdly declaring it has no effectiveness. The Examiner quotes FDA panel member Jean Grem admitting, “We aren’t supposed to talk about cost, but that’s another issue.”
What we are discussing here is a question of allocation. Medical resources are very expensive, and therefore limited. Obviously, most women in the final stages of breast cancer want their shot at life, and would be willing to pay any price for Avastin… but most of them can’t afford $90,000 per year. The inevitable result of government distributing such a resource, while enforcing price controls on medicine and health insurance, is rationing. The logic is simply inescapable.
Another way to allocate this resource is to let its eager consumers and suppliers find a way to connect with each other. Obviously, a product priced beyond the reach of most customers is doomed, despite the energetic demand of people who will not survive without it. This is where insurance companies come in, making a profit by charging premiums based on a careful assessment of risk. Most women will never require Avastin – the American Cancer Society says the lifetime odds of contracting terminal breast cancer are about 1 in 35.
Women concerned about breast cancer risks will logically be attracted to insurance policies that cover effective treatments. Producers of the drug will naturally wish to find ways to increase supply, or develop even better alternatives, and will risk tremendous investments in pursuit of profitable opportunities. About 40,000 women die from breast cancer each year. Few businessmen would turn their backs on such a highly motivated customer base.
Free people find ways to measure the value and effectiveness of goods, while the State can only parcel out limited resources, whose supply naturally diminishes with the elimination of the profit motive. You will never find an example of price controls or nationalization that ended any other way. There will always be room to criticize, and improve, market systems for allocating essential resources, especially in extreme cases where an expensive product like Avastin offers a chance of survival to desperate consumers. No criticism of the Death Panels will be allowed at all. It’s not a good sign that the American version of these panels is already laying down harsher rulings than its European counterpart.