In Human Progress, I have an article on how the American health care system cured my psoriasis with a treatment that only became available in 2019 and what this tells us about medical innovation.
On my first trip to the office, the doctor informed me that in the current year, psoriasis isn’t a problem anymore. He would simply administer a shot, and it would go away. Shocked, I asked why all the other doctors had kept this a secret from me. He laughed and said that he couldn’t say. The medicine was called Skyrizi. He would give me one shot in the stomach, another in four weeks, and then I would only need the shot every 12 weeks as a maintenance dose. No side effects, problem solved.
I went home, did some research, and discovered that this was real. So I came back and received the first shot. Initially, the doctor said that since my case of psoriasis was mild, he would give me a daily pill. I replied that part of the appeal of the shot over the ointments was that I was busy with a successful career and three small children, and I didn’t want to waste time with an additional responsibility as part of my daily routine. The doctor said this was fine, even though he often recommended the pills if possible because some people are afraid of needles. I assured him this would not be an issue.
He then pulled out the specially designed single-use pen and gave me the injection.
I was told that this was a sample and that I only needed to go through my insurance to get preapproval for future doses. I didn’t feel anything with the first shot, and went home after getting it.
I worried that my insurance provider might not want to pay for this treatment. It seemed new and expensive. Soon after the first appointment, I received a call from a Skyrizi representative. Let’s call her Emily. She was reaching out to tell me all about the medication, answer any questions I might have had, and, if need be, go to war with the insurance company on my behalf to get it. She’d even come to my house and show me how to inject the medication myself the first time I received it. All of this was free of charge, which seemed quite strange. A person with anti-market biases might have been turned off by this practice, but I was open to the idea that our interests were aligned.
As I was worried that I might run into insurance difficulties, we had a conversation that went along the following lines:
Me: And how much would the medicine cost if the insurance company didn’t want to pay for it?
Emily: Around $20,000 per dose.
Me: What?!
Emily: Oh, but don’t worry about it! We’re going to get this taken care of for you.
At this point, I thought it was strange that the doctor had already given me a sample of something that supposedly cost $20,000. This wasn’t exactly a spoonful of ice cream. Even if the treatment worked, it was a bit out of my price range. I even wondered if the doctor’s office would call and demand that I reimburse them if the insurance company decided not to cover the medicine. I felt comfortable with Emily, but that seemed like a question too stupid to ask. Everything she said communicated a calm confidence that everything would work out fine. She projected seasoned expertise and clearly had experience living in the strange universe of the US health care system.
Four weeks later, the insurance approval was still in bureaucratic limbo. I called the doctor’s office and asked what we should do now that it was time for the second dose. Should I still come in for my appointment? The girl at the desk put me on hold and went to check something. She returned and said, “Don’t worry, we have another sample in the fridge.”
By now, this pharmaceutical company, through the doctor’s office, had given me $40,000 worth of treatment for no payment and my own personal concierge. Around the four-to-six-week mark, I realized the medicine was working. My psoriasis was fading away everywhere—my face, back, stomach, neck, and scalp—and without a single noticeable side effect.
Now I was determined to keep the supply flowing. To obtain this medicine, it turned out, I couldn’t go to a normal pharmacy. I needed to call one in a different part of the state, and it would then mail me the medication. The pharmacy eventually told me on the phone that my insurance was covering the treatment and that my copay would be a grand total of $4,000 per dose. “OK,” I thought, “I might actually be able to pay this, but it would still be a burden.” Before I expressed my shock, the pharmacist interrupted — I might be eligible to receive assistance, she said, if I call this other phone number.
So I did, and the woman on the line this time informed me that I had been approved for their payment plan. My new copay was zero. The pharmacy mailed me the first dose, and Emily came over on Labor Day to show me how to do the injection myself for the first time, 12 weeks after the second sample dose. I don’t think I needed her, but she was always nice and eager to help, so I didn’t mind meeting her at least once. She even brought me an imitation injection pen, which we practiced with before doing the real thing. I was allowed to keep it as a souvenir, along with a pile of informational booklets for reference and numbers to call in case I had any questions.
As soon as the doctor decided I needed Skyrizi, an entire machine sprang into motion to ensure that I would get my medication conveniently and without paying anything. On paper, this medicine should have cost about $100,000 in my first year, and even after my copay, around $20,000. But these numbers had no connection to any price I would ever be responsible for.
As dysfunctional as the story sounds, this is the system that is driving nearly all of the major progress in medicine worldwide. The lesson to me seems to be that even the most flawed forms of capitalism are better than relatively well managed government-run systems. I also got a very cool injection pen in the process.
Yes, imperfect capitalism is better than socialism any day. Left-wing ideologues hate Pharma companies which is unwarranted. They are not evil as portrayed by these people. Most of the Pharma companies have programs for helping patients who are too poor to afford even well established treatments. One example that comes to mind is Gilead, which has a drug to treat existing HIV-1 infection and as pre-exposure prophylaxis has a program that reduces the cost to few dollars per month for poor individuals.
As a scientist working in university settings, our research group routinely collaborates with Pharma companies and often times we are awarded grants for research. As an example, Novartis funds the X-ray crystallography beamline at our research institute. It is useful for Novartis as they can use the beamline to study structures of proteins which is important for the drug discovery. However, the beamline is also used by researchers and other industry users, which has driven a lot of innovation and progress. Everybody can win with market oriented solutions.
I mean, OK, this is definitely a success story. You got your medical problem resolved and paid nothing extra on top of whatever your insurance costs you.
But you almost certainly didn't get $100,000 "worth" of medicine, or anywhere close to it. The "sticker price" of most medication in the US that you supposedly pay OOP is almost totally fictional. Basically no-one ever pays it; it's probably several orders of magnitude above the cost of production and distribution of your dose; and quite probably at least one order of magnitude over the total cost of everything to do with the drug, even including marketing, research, approval, and allowance for research for failed drugs.
It depends a bit what you're optimising for. The US system is almost certainly not optimal overall, and it *definitely* isn't optimally efficient (the US spends a lot on healthcare relative to outcomes, even allowing for it being wealthy overall and arguably subsidising drug-research for the rest of the world).
The UK has a basically simpler, and more "efficient" system, in that it spends dramatically less and doesn't get outcomes proportionally worse. But it allocates scarce resources essentially by queueing and hassle, which generates deadweight loss. This isn't great, and is particularly bad if you're rich, since you presumably value your time more highly in money terms. But of course, in the UK you can still get private healthcare, and unlike in the US, they won't present you with the choice of an insurance beauracracy or ludicrous list prices and risk you having to pay 10x the actual value of the treatment. On the other, other hand, the existence of the NHS means there's a lot less private healthcare around, so your options are more limited.
I'm convinced that healthcare is a particularly hard part of the economy to make work in any remotely sane way. Somehow we seem to muddle along anyway.