How much is too much when paying for healthcare?

When prevention fails and treatments are needed for ill-health, the discussion turns to who is to pay, and how much. The arguments rage over which hospitals should remain open, how high health workers’ wages should be, and – most conspicuous at present – what should be the price of drugs, and what proportion should be paid from the public purse.

The debate has been given renewed focus by the recent introduction of revolutionary treatments for liver disease, cancer and tuberculosis. France and Italy have recoiled in horror at being asked to pay a manufacturer more than €50,000 for a 12-week course of treatment for hepatitis C, for instance.

But not all national authorities have taken that view – the health service in the UK has decided the price offers a better deal than current, less effective treatments, which carry a risk of
seeing patients decline into far more expensive liver failure.

The attitude varies according to national resources invested in health, and in line with the factors taken into account in the evaluation. Those who look at the price on its own, in absolute terms, tend to allege profiteering by manufacturers. Those who look at the broader healthcare picture see the cost in relation to the costs of non-treatment – and relativise the price by comparing it with the costs of hospitalisation or disability. In Europe, with each country still responsible for its own decisions on what treatments to reimburse and at what price, the diversity of approaches leaves the single market far from complete in terms of medicines.

Greater collaboration between member states on health technology assessment – the attempt to evaluate the added value of any new treatment – is being promoted, and may help to attain some commonly-accepted criteria for evaluations. If, that is, current discussions define what criteria should be employed. But in the interim, innovative drug firms say they face a form of double jeopardy. If they make concessions to a low-income country by marketing the product there at a price that covers only the marginal costs of manufacturing and distribution, they become vulnerable to two forces.

One risk is that wealthier countries may argue that they too will pay no more than that lower price. Or, even if a wealthier country grants a price that permits some coverage of the (much more substantial) research and development costs, parallel traders may exploit the one aspect of the single market that does work well in this sphere, and erode the volume of higher-value sales there by importing supplies from the country with the lower price.

Meanwhile, France is still trying to obtain wider member state support for a letter demanding that drug firms cut their prices for valuable new – but expensive – medicines. And the Italian presidency of the Council of Ministers is aiming to win wide backing at the December health council for a united front among member states to resist high prices.