Comment on Alzheimer's Disease and Economics

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The context for this page is a letter to a local newspaper. 


The leader article in yesterday’s Journal (‘such a sad decision’) makes a relevant point.  It is sad that a dementia patient is being denied an Alzheimer’s treatment but the situation is more complicated than stated.  It should be recognised that economic resources are scarce and that decisions will have to be made about the allocation of limited funds.  To use the cliché ‘hard choices’ have to be made, given that the National Health Service has a limited amount of money available to it.  Money spent on an Alzheimer’s drug is money which cannot be spent on a cancer or heart drug.  An economist may argue that a cancer or heart drug may offer better value for money for the taxpayer than a drug for Alzheimer’s.


The problem is that the economist’s concept of scarcity is not being applied broadly enough in public policy.  The criterion of ‘cost effectiveness’ used by the National Institute for Clinical Excellence is thought to be appropriate in the health sector.  However, if cost effectiveness is going to be used to make decisions in the health sector, then it should also be used to make decisions regarding say defence expenditure.  The value to society of drugs (such as Alzheimer drugs) needs to be compared with the value to society of say the recent (2003) Gulf War.  One way of doing this would be to compare the public’s willingness to pay (higher taxes) for health spending versus the public’s willingness to pay for defence spending.  The amount of health and defence provision would have to be the same, so that an accurate comparison could be made of the public’s willingness to pay.  However, the public does not seem to have been asked, about how much they would spend on defence. 


The chief executive of the National Institute of Excellence (NICE) suggested that the (Alzheimer) drugs do not make enough of a difference for NICE to recommend them.  However, this ignores the possibility that the public may want more money spent on drugs and less spent on defence.  The problem is that NICE may be overstating the point that economic resources are scarce.  Resources could be allocated from other areas (such as defence) to pay for drugs.  This could lead to a higher level of satisfaction for society as a whole.

Until NICE acknowledges this possibility then it deserves to be challenged as it was in yesterday’s Journal.  Its decision making is too narrow for public policy making.