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What Should We Do About Expensive Drugs?

Let’s say a drug has been shown to extend the life of terminally ill patients by months or even years. How much should we pay for it? Is there such a thing as a drug’s being too expensive? If we say “yes,” aren’t we putting a price on what a life is worth?

Suppose we have a rule that says we will pay for a drug that extends a patient’s life for a year, provided that it doesn’t cost more than $X. As we shall see, this is exactly what is done in Britain and other countries. If we follow suit, isn’t that the same thing as deciding that the lives of patients are not worth more than $X? And if so, aren’t decision rules like this one ethically abhorrent?

Here is the uncomfortable reality: We can’t avoid making decisions like this. And if today such decisions are rare, tomorrow they won’t be. The future holds the promise of a great many ways of prolonging our lives – potentially at great expense. If we are unwilling to spend the entire GDP on health care, someone has to say enough is enough.

John C. Goodman is a Senior Fellow at the Independent Institute, President of the Goodman Institute for Public Policy Research, and author of the widely acclaimed Independent books, A Better Choice: Healthcare Solutions for America, and the award-winning, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and the National Journal, among other media, have called him the “Father of Health Savings Accounts.”

New from John C. Goodman!
A BETTER CHOICE: Healthcare Solutions for America
Obamacare remains highly controversial and faces ongoing legal and political challenges. Polls show that by a large margin Americans remain opposed to the healthcare law and seek to “repeal and replace” it. However, the question is: Replace it with what?

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