Writing in the journal Science Translational Medicine, MIT researchers discuss a novel way for patients to afford breakthrough medications they otherwise could not afford. Their interim solution: health care loans. Not unlike the way most people buy a house, a health care loan would turn a large upfront medical bill into a series of manageable periodic payments. In my opinion, a better analogy is a car loan. If you’re diagnosed with cancer or are at risk of losing your liver to hepatitis C, taking out a $30,000 loan to pay for treatment beats the alternative.
Using a process called securitization would provide revenue to drug innovators while providing cash flow to investors — who buy the loans at a discount. One drawback (if you want to call it a drawback) is that this only works for cures. Sovaldi is an example. Sovaldie is a highly effective cure for hepatitis C but has a “retail” cost of $84,000 for a treatment regimen.
There is at least one other benefit that I don’t believe the authors recognize. If individuals were forced to pay for advanced therapies, they would demand more proof they work before coughing up the funds. Because consumers’ pockets are not as deep as insurers, they would demand more value and the prices of cures would likely be much lower. Just as Sovaldi sells for less in countries with lower standards of living, selling Sovaldi to people who have to pay treatment costs directly would probably result in lower prices.
Of course no investor would buy a securitized loan for that $250,000 lung cancer treatment that only extends lives by six weeks. So in those cases the drug maker might have to accept weekly payments for ongoing treatments. Again, patients would likely demand more proof of benefit. If patients had to pay directly — only stopping when they die — maybe the health care system would ultimately spend less on marginal treatments. Just think about it: marginal treatments would generate revenue for shorter periods than highly effective treatments.
One of the coauthors states “We fully agree that this is a temporary measure, one that can save many lives while we wait for our policy makers to come to their senses and focus on the business of governing rather than political infighting,” I thought he had a good idea up until that last statement. Another coauthor said “It’s lamentable that such an approach would be necessary. The idea of patients taking mortgages is distasteful to me as a doctor, but it’s better than the status quo in many ways.”