Public entities as consumer of high cost innovations

Both pharmaceuticals and technological innovations require high R&D expenditures, both offer novel ways of addressing healthcare concerns, and the patterns of adoption may be compared (although the channels of adoption may be somewhat different). A NYTimes article caused me to consider some of the financial considerations regarding innovations relating to healthcare. This article focuses on novel cancer drugs. While they provide new hope for the treatment of cancer, they do so at a high patient cost and at a high cost to society.

In a lecture with a physician and administrator for Los Angeles County healthcare, I became aware of some ethical concerns associated with these trends. In particular, the high cost of cancer drugs (and novel technologies) not only affects the patient/consumer and his/her insurance, but also the taxpayer. Expensive innovations are not only bought by private organizations, but by public ones as well. As such, issues of distributive justice arise. Should the uninsured have access to novel technologies even when this means less resources for other patients, or other hospital departments? Who should decide how the taxpayers money is spent on various innovations relating to healthcare? When the efficacy of these innovations is limited, but beneficial nonetheless, how does this effect what should be considered the appropriate degree of utilization by public entities?

For arguments sake: what if there was a new vaccine that could cure diabetes, but cost $100,000 per shot. Who should have access to the vaccine that can’t pay for it on his or her own? If the government can buy a certain amount, what is the ethical distribution? What if the vaccine is known to be 20% effective; how does that alter the utilization by publicly-funded hospitals?

As the cost of technological innovations increases, can public entities afford to be a major consumer to the detriment of other types of purchases?