One More Reason Halfway Socialized Healthcare is the Worst

A few years ago, a company called Genentech developed a cancer treatment it called Avastin. Avastin was a very expensive and dubiously effective cancer treatment, but it turned out to be great at treating Wet Age-Related Macular Degeneration—an eye disease that causes blindness in older patients. Another plus—an extraordinarily small dose of Avastin was sufficient to treat AMD, so using it for this purpose was very inexpensive.

But then some bad PR started circulating about Avastin’s side effects, and Genentech decided to modify the drug ever so slightly (read—basically not at all), run it through a battery of tests, and rebrand it as a solution to AMD. It then marketed the newly rebranded drug as Lucentis. Genentech priced this drug at nearly $2,000 a dose. On the other hand, Avastin (when used for AMD) costs about $30 a dose, and studies indicate it works as well as Lucentis. After all, it’s basically the same drug.

So, it should be no question that doctors opted to use Avastin over its more expensive sister product, right? Wrong. According to a report by the Inspector General of the Department of  Health and Human Services, “Medicare and its beneficiaries spent $1.1 billion for Lucentis in 2010.” The report also mentioned that “the Medicare payment amount for one Avastin dose used to treat wet AMD is always substantially less than the Medicare payment amount for Lucentis.” Medicare could have saved millions if doctors had chosen to prescribe Avastin instead of Lucentis. But, for some reason, they didn’t. An article in Mother Jones explains why:

[Genentech] could have done those trials [the ones they conducted to get Lucentis FDA approved] a whole lot more cheaply using Avastin, but chose not to since that would make it clear that Avastin worked just fine—and Avastin, unfortunately, was already on the market at a price that was very low in the small doses needed for AMD. Likewise, doctors could have rebelled and refused to prescribe Lucentis, which would have benefited their patients since Medicare beneficiaries pay 20 percent of the cost of pharmaceuticals. But why would they? Lucentis is more convenient; doctors don’t bear any of the higher cost themselves; and, in fact, since Medicare reimburses them at cost plus 6 percent, prescribing Lucentis earns them about $100 more per dose than prescribing Avastin.

So patients and taxpayers pay for halfway-regulated greed. And this is why halfway socialized healthcare doesn’t work. To be clear, I’m not for a fully socialized healthcare system, but if we were fully socialized, at least Medicare could just refuse to pay for Lucentis, and the taxpayer and the patient would benefit. If we weren’t socialized at all, of course, patients could refuse to buy Lucentis or refuse to go to doctors who prescribed it. But the current halfway state of socialized healthcare is by far the worst of both worlds. In the current system, pharmaceutical companies and doctors aren’t held accountable by the market or the civil government.

And the halfway nightmare of socialized healthcare is indicative of socialism in general. When you have capitalism mixed in equal parts with socialism, you get crony capitalism—a corrupt admixture of government tyranny and corporate corruption. When you have socialized healthcare mixed in equal parts with fully privatized healthcare, you get crony medicine. The same goes for halfway regulations and compromise in general. Moderate Republicans contribute to political systems that in many ways are the worst possible combinations of political ideologies. In an attempt to keep from upsetting any particular constituent, they end up fighting against the values and interests of all of their constituents.

Don’t get me wrong. It would be terrible if America went fully socialist. But these halfway measures against socialism are worse than fullblown socialism. As Patrick Henry said: “Give me liberty or give me death.” We’re somewhere in between. We’re not free, and we’re not entirely dead. We’re just interminably oppressed… and interminably miserable.