On Why Prescription Fees Are No Way To Fund Cancer Drugs

Who is this Christopher Luxon fellow, really? Over the past two years, we have had so many invitations to find the pearl in the oyster. Alas, Luxon has been more like one of those bad first dates that keep on asking for a chance to start again, and again, and all those attempted re-sets do is remind you why it was never going to work out. Now that he’s moved in next door as the Prime Minister... We all have to make the best of it though, right?

For another insight into his worldview.... The reason Luxon gave RNZ for re-instating the $5 prescription charge was that he (and people like him) didn’t need it. So... therefore, ipso facto, no one else should get it. As he told RNZ, his government will put the money into buying more of those pricey new cancer drugs.

The idea that a universal entitlement is wasteful because some wealthy people mightn’t need it is bad social policy and false economics.With targeting, the overwhelming evidence is that the compliance barriers can be (a) hard to understand and (b) costly to administer, such that (c) the take -up rates are low, partly because (d) many people who would qualify do not know that the targeted assistance measures exist.

For pharmacists, the charging system is time-consuming to manage, and this is time, the pharmacists say, that could be better spent in assessing the health needs of their customers. Arguably, re-instating the $5 prescription charge will be almost as costly (socially and economically) as keeping the fee waiver in place.

That $5 charge may well be a pittance for Luxon and for people earning north of $100,000 a year – and since many of them will have private health insurance, the related costs of getting access to primary and secondary healthcare also won’t be a major bother. Evidently though, even some people on high incomes would prefer to use the revenue from prescription charging to help subsidise their access to those expensive new cancer drugs, although relatively few people will need them, or derive significant benefits from them.

Despite Luxon portraying this as a zero sum game – you can have either a $5 prescription charge waiver or new cancer drugs but not both, this isn’t true. Both would be entirely possible. It isn’t as if the new government has to go looking down the back of the sofa for a spare $5 bill to keep cancer patients alive.

In reality, there would be plenty of tax revenue to spare – if Luxon and Nicola Willis hadn’t earnarked so much of it for tax cuts that will actually deliver their largest benefits to people like themselves, who - so they say - don’t need the help. Landlords are also expecting to receive a massive multi-billion tax subsidy as reward for their property speculation efforts. The real trade-off is – cancer patients or property speculators? And the winner is... Landlords. Go figure.

Finally, if Luxon really did believe that universal entitlements are bad and wasteful – because wealthy people like him don’t need them - – then why doesn’t he impose means testing on pensions? A centre-right government would surely conclude that many old people don’t really need a pension.

Of course, the reason Luxon doesn’t apply the same brutal logic to pensioners is because it would be politically suicidal for him to do so. The bottom feeders though, for whom a $5 prescription charge waiver does make a difference, are expendable, in more ways than one. Over the next three years, we will have lots more opportunities to get to know Christopher Luxon and his priorities. In all likelihood, it won’t be much fun.

Footnote One: For those on low incomes... In order to get their prescription, there will have been (in many cases) transport costs to get to the medical centre, a charge to see the doctor who writes the prescription, and/or a charge for getting repeats forwarded to the pharmacy, such that then paying an extra charge to get the medicines handed over.... Well, that may be the straw that breaks the weekly budget. If we are trying to make primary care the focus of the health system (and prevent sickness from worsening until people turn up at hospital A&E), then putting extra cost barriers back in place for the very people we want to help to gain access to primary care, seems perverse.

Footnote Two: That false choice - $5 prescription charges or the new cancer drugs – is obvious in other ways. Reportedly, an annual course of Keytruda costs at least $60,000 ( with administrative costs it has been estimated to cost $100,000) Other new bowel treatment drugs cost per course about $35,000 annually. Taflinar, the new melanoma drug, has a reported annual cost per patient of $132,000. Those potentially life saving treatments per person would come at the cost of at least 7,000 and more like 20,000 or 40,000 individuals paying extra prescription charges for their own essential medications.

Anyway you look at it then,the prescription fee charges will be only a pittance towards the cost of making these new drugs available to any but a fortunate few. It is not a feasible way to pay for any generalised access to the new drugs beyond that small circle. No doubt, some people do need the new drugs but those on low incomes shouldn’t be being taxed to subsidise access to them. How about a wealth tax to pay for cancer drugs? Surely Christoper Luxon would kick into that worthy fund.

Footnote Three:

There is also little doubt that Big Pharma wants us to buy more of their pricey new products, and fewer of the less profitable generics. National/Act seem happy to oblige them. But before we write Big Pharma a blank cheque, we need to have a wider debate about affordability and need to identify all the cost barriers to access to drugs, and to adequate primary and secondary health care.

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