Tuesday, February 28, 2012

UK Holding Back Cancer Drugs

The 2/25/2012 Telegraph reports, "New cancer drugs being held back to save Government money, says GlaxoSmithKline boss".

From the article:
GlaxoSmithKline chief executive Sir Andrew Witty warned that... governments were now seeking to go further in an effort to achieve even bigger savings -- and he highlighted Britain's decision to delay new cancer treatments.

"The bit I'm much more frightened about is that what's now beginning to become clear is that, in addition to price reductions, governments are delaying the approval of innovative new drugs," he said.

"So a second way they can save money, they think, is 'Let's just not buy the next round of innovation'.

"Cancer in the UK is a good example where we're seeing oncology drugs being systematically delayed from introduction and reimbursement.
The net result:
He warned that drug companies may soon no longer find it worthwhile to seek approval for their products in Britain.

"The regulation is such in this country that it is not worthwhile for the drug companies making the effort of actually negotiating with our regulatory authorities for the sale of their products in the UK. It is a complete loss-leader for them – waste of time," he said.

"We are going to have a situation in the UK where drugs are not available for our patients. It is a disaster. Someone just needs to sort this out."
(Read the full text of "New cancer drugs being held back to save Government money, says GlaxoSmithKline boss".)

Besides showing the pernicious effects of government control over over drug development, the article also demonstrates one of the problems with government-mandated "cost effectiveness" restrictions.

In a free market, some innovations are going to cost a lot in the beginning. Remember how expensive first-generation DVD players were? Or the first home computers?

But as early adopters start buying these products, they create an increasingly-robust market which then creates economies of scale which drives down the price -- making them increasingly affordable to later users.

Imagine if a government agency had stopped DVD manufacturers from selling (and early adopters from buying) their products on the grounds that they were too expensive and insufficiently "cost-effective". This would have short-circuited the market forces at the outset, thus depriving later consumers of the ability to purchase these items at future lower prices.

The big question is how long it will be before US regulatory agencies start doing the same thing as is already happening in the UK? And will American patients take this lying down, or will they stand up against it?