Pharmaceutical pricing is an ongoing concern but in order to really understand what is at stake, consider instead the story of the theft of Kim Kardashian’s $4,000,000 diamond ring when she attended Paris fashion week. This seems like a lot of money for a polished piece of rock. For $4,000,000 you could buy 40 Porsche 911 S cars, 4,500 iPhone 10’s, or 212,00 tablets of acetaminophen. Absent from this story was Congress demanding gemologists and jewelers appear before them to justify the outrageous pricing. No one really cares about how much Kim Kardashian pays for her jewelry. When Mylan Pharmaceuticals charges $600 for an EpiPen, a device that will save a life, everyone is outraged. Why do we accept it is OK to pay $4,000,000 for a polished rock and not OK to pay $600 to save a human life?
In The Wealth of Nations, Adam Smith embraces a market-driven society and asserts that the invisible hand creates the best result even when different individuals working within a market serve their own best interests. If we consider the pharmaceutical industry as a market, certain things must take place. Good markets give us all we need efficiently and at the best price. Does this take place? The number one cause of death in the U.S. is heart disease and yet the most profitable drug in the world, Humira, treats arthritis. Further, Humira is not even a cure. Instead of developing treatment for what kills us, the market has produced at least seven drugs to reduce cholesterol; at least seven drugs to reduce heart rate, and at least nine antihypertensive drugs all to lower blood pressure by the same mechanism.
Where then is the failure in the pharmaceutical market? Consider Kim Kardashian’s diamond ring again. In the language of economics, Ms. Kardashian’s ring is a private good. Private goods are rivalrous and excludable. Private goods belong to me, and they don’t belong to you. Pharmaceuticals, on the other hand, are really public goods masquerading as private goods. Clean air is a public good. Sidewalks are a public good.
If pharmaceuticals are a public good, so is healthcare. Now individuals are transformed from beneficiaries to claim holders. Here, the law agrees. An unfunded mandate to treat patients exists under the Emergency Medical Treatment and Labor Act (EMTALA). This act, first passed in 1986, establishes a guarantee for the uninsured to obtain emergency medical care regardless of their ability to pay. Within the Social Security Act, section 1867 puts in place obligations on hospitals receiving Medicare funding and offering emergency services. This obligation includes screening examinations and treatment of emergency conditions, including active labor. Stabilizing treatment must be initiated. Transfer to another hospital can only take place if the treating hospital lacks the capacity to provide necessary treatment. In other words, by law, hospitals receiving federal healthcare funds can not turn you away if you are uninsured and sick.
If we really think buying or not buying pharmaceuticals or health insurance is a choice and that the federal government should not be in the business of healthcare, repeal EMTALA. No need to provide reasonable pharmaceutical pricing or health care to those unwilling or unable to pay for health insurance. Uninsured critically ill individuals will die. Money will be saved. Some people will have no trouble with this. On the other hand, if this scenario strikes you as unacceptable, it is time to admit human flourishing is in all of our interests. When it comes to price and healthcare, our values tell us human life is priceless.
Joel Zivot, MD, is fellowship director in critical care medicine at Emory University School of Medicine in Atlanta. His clinical expertise and research interest include care of critically ill patients in the OR and ICU, education and scholarly work in bioethics, the anthropology of conflict resolution, pharmaco-economics, and a variety of topics related to anesthesiology/critical care monitoring and practice.