Virginia Postrel on Her Own Brush with Cost-Effective Drug Research

In the March 2009 issue of the Atlantic, Virginia Postrel recounts her recent successful battle with breast cancer and notes that she may not have had such a happy outcome if she lived in New Zealand. Following surgery to remove several tumors, Postrel’s doctors prescribed the monoclonal antibody Herceptin, which regulates cell division and can keep some cancerous cells from dividing uncontrollably. Herceptin has a 95 percent success rate in early-stage cancers like Postrel’s. And, although it’s been just a short time since her treatment ended, it seems to have worked.

Unfortunately, despite fairly good evidence of Herceptin’s effectiveness in treating early-stage breast cancer, it was not until 2007 that the New Zealand government agency called Pharmac, which determines what medicines will and will not be covered by the country’s national health care system, agreed to cover Herceptin for early-stage cancers. Herceptin is expensive — in the neighborhood of $60,000 US per patient — and Pharmac wasn’t convinced the treatment was worth it. Ironically, Postrel points out, Pharmac had long agreed to cover Herceptin treatment for late-stage cancers, even though the likelihood of success in treating those conditions are much lower.

In part because the Obama Administration and many congressional Democrats have been pushing for a US-equivalent of Pharmac, Postrel’s article generated an overwhelming number of letters to the Atlantic‘s editors. Some will be published in a future edition of the print magazine. But, two days ago, the Atlantic published several of them online, along with a lengthy reply by Postrel. Because her original article is relatively short, Postrel could not fully examine or even touch on many items that she does address in this later response. I recommend that the two items be read together as a two-part essay.

One theme in particular that Postrel develops more fully in part 2, is very important. While it’s true that government run health plans can’t pay for all the treatments every patient would like to have, the problem is that, when a government herds large swaths of its population into public sector health plans with few realistic alternatives, this kind of rationing inevitably means that some patients will not get treatments that could cure them. One letter writer, for example, argues that Herceptin was a poor example for Postrel to highlight because “Multiple cost-effectiveness analyses have shown that, despite its high cost, Herceptin is both effective and cost-effective.” That, of course, was Postrel’s point. She replies, “I used [Herceptin] as an example not only because of my personal story but because its very cost-effectiveness makes it such a striking example. New Zealand chose to ration the drug (and not to cover it at all for early-stage cancer until July 2007) despite its significant benefits.”