Last week
the National Institute for Clinical Excellence (NICE) rejected the
drug Kadcyla, produced by pharmaceutical giant Roche, which provides
an extra 6 months of life to breast cancer sufferers, because at
£90,000 it is too expensive. It highlights a number of issues.
The first
issue, of course, as a number of patients pointed out, is how can you
put a price on a person's life? But, perhaps the real question here
should be, even if you could arrive at a method for making such a
decision, who should make it? Under capitalism, money and profits
are ranked more important than the lives of millions every day. It
was known for a long time that asbestos, for example, was lethal, but
many industries depended on its continued use, in order that they
could continue to make profits. As a result, the facts about
asbestos were kept quiet, and large numbers of workers have died from
working with it, as a result. Even until quite recently it was being
used in products such as Artex, and some types of floor tiles. The
orthodox theory of markets requires that buyers and sellers should
have perfect knowledge, but if workers are denied the knowledge of
what damage to their health might result from certain types of jobs,
how can they decide whether to sell their labour-power for that
purpose, or how much to charge for it given those risks?
But, the
issue in relation to Kadcyla arises from another cause. Kadcyla is a
commodity like any other, sold into the market. Patients who want
Kadcyla, and who can pay for it, could buy it, i.e. they could
constitute effective demand for it. The point here is that very few
people could afford to pay the market price required. This is one
reason that developed capitalist economies created welfare states,
because in so doing, and thereby collecting tax and social insurance
from millions of workers, they can average out the risks that each
person faces, and thereby ensure that those who do require expensive
treatment can obtain it, without every individual having to set aside
huge amounts to cover their own particular risks. That means that
various kinds of drugs and treatments can be profitably developed
that otherwise would not have been, because the potential market for
them would otherwise not have been big enough.
But, the
issue now arises, as these drugs and treatments become ever more
extensive, but ever more expensive also, how to ration out the funds
available. A market, in which every individual consumer acts as an
independent unit resolves this simply on the basis of price. Either
you are able and prepared to pay the price for a commodity or you are
not; you buy it or you don't. But, when the consumer is instead a
collective consumer, and the funds available to that collective
consumer are contributed by individuals, the question necessarily
arises how best to use the available funds to maximise utility, or
what Marx calls use value.
This is the
dilemma that a socialist society would face; how to make decisions on
behalf of all that maximise the utility of all. NICE was established
to perform this function within the context of a capitalist society,
and a state capitalist health service. However, much some people may
talk about “Our Health Service”, this incident once again
illustrates that it is not “Ours” at all, but a health service
under the direct ownership and control of the capitalist state, and
geared, therefore, to meeting the needs of capital not labour. We
are not even allowed to determine what the funds of this health
service should be, let alone how those funds should be spent.
Many people
watching the interviews of patients, now deprived of the treatment, will feel the deepest sympathy with their plight. If we really did
have a health service that was “ours”, that was owned and
controlled by workers, the task of making the decision of whether
funds should be used to buy Kadcyla, or for some other purpose, might
not be made any easier, but it would at least mean that the decision
was our decision, and not the decision of state bureaucrats, based on
maximising profits.
But, this is
the second issue that Kadcyla raises, which is how would we deal with
such issues under socialism. The reality is that Kadcyla shows the
kinds of decisions that a socialist society would have to make every
day. NICE has decided not to allow the NHS to buy Kadcyla, because
it is too expensive for the utility it provides to society. We may
want to disagree with its decision, but the basis of the dilemma
remains. A socialist society would have to also decide whether the
resources it had to devote to making the drug available, provided
greater utility for society than if those resources were used in some
other way. For example, if those resources could only be made
available by not providing drugs or treatment that kept children
alive, who would want to make that decision?
This issue
is not resolved by arguing that Roche, or any other drug company
should simply make the drug available at a much lower price. In a
capitalist economy, all drug companies will require to make at least
the average profit on the capital they invest. In fact, a drug
company may need to make higher than average profits, because it has
higher risks than other companies. The company may spend years
developing a drug that is never effective, and cannot be marketed.
It may also develop drugs that its later found have serious side
effects that leave it open to being sued for large amounts of money.
This is rather like the issue I highlighted a few weeks ago about
house builders. In a capitalist economy firms will not supply more
of any commodity, unless they believe that they can sell it at a
price that brings them the required profits. No amount of
moralising by politicians will change that. If they don't like it,
they have to accept that they have to create a different type of
economy than capitalism.
But, the
issue is not that simply resolved even within the context of a
socialist economy either. In a socialist economy, society could
decide to allocate its resources in whatever proportions it chose.
If it was decided that we should have more Kadcyla, and less
chocolate, we could simply allocate resources accordingly. The
question of price would then be immaterial, we would just produce
however, much Kadcyla was required and make it available as supply.
But, in reality, it is not that simple either.
The other
issue that Kadcyla illustrates is the extent to which the nature of
production and consumption has changed under modern capitalism, and
that would be extended even further under socialism. Like many new
commodities, such as smart phones and other bits of technology, as well as commodities such as entertainment, the real value of Kadcyla resides not in the materials
used for its production, nor in the machinery required for its
production. Its value resides in the thousands of hours of labour
put into its development by large numbers of highly skilled
scientists. The labour of these scientists is what Marx calls
complex. That is the value that society places on it, is a multiple
of the value created by ordinary, unskilled simple labour.
In a market
economy, this comes down to the question of how much consumers are
prepared to pay for the product of this labour. But, it is an
important issue for a socialist society too. Pharmaceutical
companies employ tens of thousands of these scientists in total. If
a socialist society wanted to produce more of these drugs, we would
need to employ even more. But, the cost to society is not just the
wages paid to the particular workers – and in the first stage of
Communism, before there is an abundance of society's needs, its
likely that highly skilled scientists will still expect to be paid
much more than a production line worker – the real cost is all of
the resources that have to be put into creating that worker.
It requires
resources to provide high levels of education, which in itself
requires an increased allocation of society's resources to producing
more teachers, more schools, more lecturers, more universities, more
laboratory equipment and so on. It requires society to provide the
resources to feed, clothe and shelter all of these workers while they
are themselves being trained and educated, before they even begin to
put any value back into society themselves in exchange. All of the
resources allocated to these requirements are thereby resources that
are not being used to produce all of the other goods and services
that society requires, or the means of production that would enable
society in future to increase its productivity, and be able to
produce an expanded range and quantity of goods and services.
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