- BennyModerator@bennyJoin Date: 2002Post Count: 1,416
The killer disease cystic fibrosis (65 roses) this week became far less of a problem for a number of Australians. From what I hear, a particular drug (Trikafta) was costing families up to $300k per year as they struggled to keep a child with CF alive. But late last week that all changed as Australia put Trikafta on the PBS for folks with one particular strain of the disease. More is hoped into the future as the benefits of this drug are seen in the community.
It has been good news for many, but my thoughts went to the financing of this life-saving change for many. Initially I saw just that huge cost, multiplied by however many people would now be able to buy the drug for just $6.80 per script. My mind boggled as I considered the savings to each family, and the effect that would have on their lives. Huge !! But I also wondered how a Govt could look at spending so much on one individual as they took on that $300k cost for each person helped.
I resolved to try to understand the GAINS made by making such a move. One obvious gain was in the removal of several hospital stays per year for each individual. Hospitals and staff don’t come cheap, so certainly some massive gains to be made there. How one might quantify this is beyond me, but I’d be interested to hear from others re such likely savings per person per year. Like, what if a CF sufferer needed 10 visits per year, each of 7 days, with all the attendant staff, drugs, operating room costs, ward costs, etc. What would 70 days of critical care of one person in a hospital actually cost in dollar terms? And is 70 days per year actually realistic anyway? It could even be more than that (or less, of course).
Could it be that much of that $300k can be saved with the lack of hospital visits this new drug brings? As well as that, imagine the productivity gains of those parents who no longer have half their minds on a job, and the other half on “when will my child need their next hospital visit?” or on “How can I afford the next purchase of this drug to save my child?” Indeed their euphoria of no longer having that problem could boost their productivity enormously – what’s that worth?
Perhaps it would allow a parent to return to work after being a full-time carer for years. Savings there (perhaps) when the Govt no longer pays a carer allowance, and a person starts paying Tax again. Certainly some $$ value there too.
Another way to look at this is as an investment in the future. It appears many children born with CF don’t live much past 30 years, and likely sickly for much/all of that time. So that Govt support is actually saving a life that will hopefully live into old age with their help, thus allowing a full 40 years plus of working life, paying taxes and adding value to a community over that time. Certainly gains there that offset some of the cost per person paid by Govt (i.e. the taxpayer).
Hey, I know, I’m struggling – but I was blown away to learn that the Govt has just stepped in to help so many, and wondered how they might have rationalised such a decision. The above attempt is a guess at best. If anyone can add more, please do – meanwhile I am happy for those souls who no longer have to fight so hard to save their child from this killer disease.
Can you add better data there? I’d be quite interested to know more – and thanks……
BennySteve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763
Thanks for the post and it is an interesting topic.
We’re so lucky to live in a country where the government assists. Elsewhere you would need to have private insurance, or just pay the cost from your own pocket.
I understand the goverment usually ‘does a deal’ with drug companies to get them on the PBS, so no doubt there are some savings there, and I am sure there are some economics at play, as well as lobbying.
I don’t know how you put a price on a human life. I know economists try under some modelling called ‘value of statistical life’ (VSL).
You may find these links / articles interesting:
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
Success comes from doing things differentlyBennyModerator@bennyJoin Date: 2002Post Count: 1,416
And thanks – some worthwhile reading there. And yes, I recall hearing that the Govt lobbies drug companies too – so perhaps that $300k per year was negotiated down to $200k, which then exceeds the current “statistical value per year” of an Australian life.
That second link has a host of interesting thoughts within. It is very much a TLDR link, but I stuck it out for most of the journey. ;)
And one gem I caught in the third link was in the Comments section – one wag mentioned that we “do a wallet biopsy prior to deciding to pay for expensive surgery” (he was a US citizen where hospital care costs the patient, or their insurer).
Your answers provided me with the answer I was seeking though, so thanks – i.e. the current “value of an Aussie life” seems to be around $5m one-off, or $220k per year, whichever is applicable. That goes some way to adding value to this earlier post of mine:-
In there, the link shed light on one estimated value of $330m per Covid life saved, which seemed abnormally high to me – your links above now gives more credence to my original post that had questioned the sense of such decision-making. $5m is quite a discount on $330m !!!