It\’s taken as an item of faith that medicine is going to continue to get ever more expensive:
First is rationing. Nearly all of us now know that the NHS � the taxpayer � cannot afford to pay for all the treatments and drugs that are already available, still less for those that will be developed in the future.
The demand is going to be almost infinite; tax receipts are not. As more conditions become treatable and patients’ demands become more sophisticated, this problem will soon be a great deal worse.
I\’m not convinced.
Yes, the services part of health care, the labour that goes into it, is going to continue to get more expensive as compared to manufacturing (Baumol\’s Cost Disease). But the drugs part of treatments? I have a feeling that, a decade or two down the line, they\’re going to be vastly cheaper. The reason is patents.
I don\’t think it\’s all that controversial to say that we\’re going through a technological revolution in medicine. The human genome, new drug testing methods, advances in cancer drugs and so on. We also know that this is leading to some very expensive treatments (£ 20,000 for a course of Herceptin, isn\’t it?). But patents on such drugs only last 17 years. Perhaps a decade from the time they first come into use (given the time it takes for approval). At the end of that time they are available for generics manufacturers to make. And thus end up costing something closer to spit, rather than the $ 1 billion or so that has been recouped to pay for the development and testing process implicit in the pricing while under patent protection.
So this rise in medical costs is only going to continue as this technological revolution works its way through the system: costs should fall after that.