Healthcare Monopoly 6: Cuba Socialism

Cuba's healthcare socialism is being touted by some health NGOs and academics here as a possible "model" for the Philippines. They like the service monopolization and big spending on healthcare by the socialist government there.

Among those who gave praises for the Cuban state monopoly "political will" in healthcare was Dr. Reynaldo Garcia, a life scientist academic and manager of technology and innovation at the same time. He is  the Director of the Technology Transfer and Business Development Office of the University of the Philippines (UP) System and a Full Professor at the National Institute of Molecular Biology and Biotechnology in UP Diliman. He got his PhD in Molecular Biology at the Australian National University (ANU) and his business degree (Master’s in Bioscience Enterprise) at Judge Business School and the Institute of Biotechnology of the University of Cambridge in England. 

During the 9th Science, Technology, Innovation, Knowledge and Entrepreneurship (STIKE) Kapihan Series on the subject, Technology Transfer and Healthcare last September 27, 2012, at the Asian Institute of Management (AIM) organized by the Dr. Stephen Zuellig Center for Asian Business Transformation, Dr. Garcia showed these slides below, among others.. My discussion of his talk on tech transfer and IPR is here, IPR and Medicines 25: Patents, Diagnostics and Technology Transfer (October 08, 2012).

The four charts show that (a) illiteracy rate in Cuba declined fast, (b) infant mortality as of 2000 was as low as that in the US, (c) physicians per capita is more than double that in Latin America and the US, and (d) life expectancy at birth similar to that in the US as of 2004. Lower photo shows free healthcare in Cuba.

Dr. Garcia also said that Cuba has the biggest biotech facilities in the developing world. There was no year indicated, but I think this was in late 2000s level. In terms of vaccine development, Cuba was also high tech.

And more vaccine R&D capacity, as of 2007. Cuba is known for good quality cigar exports, smoking is prevalent, so its government developed a vaccine against lung cancer.

I have high regard for the academic and professional credentials of Dr. Garcia but I cannot agree with him do not think that state monopolization of various health services -- from medicines and vaccine innovation and invention to hospitalization care -- is a good thing. Here now are my comments to Dr. Garcia's points above.

One, the good health indicators in Cuba at least as of 2004, do not match with its economic development or degree of industrialization. So data sources may be suspect, not indicated in his slides.

Two, assuming that the high physicians per 1,000 population data is correct, more than twice that of the US, I think Cuban government hospitals may simply be bloated with many doctors relative to number of patients. They could be mostly general practitioners with very few specialists.

Three, free healthcare is being done in many developed economies with nationalized or government monopolized healthcare system, and the result is almost always the same: demand is much much larger than supply, resulting in either (a) healthcare rationing like some patients waiting for days, weeks or even months to get free healthcare, (b) lousy services like seeing patients only for two or five minutes, write drug prescriptions then call the next patient, and/or (c) huge fiscal deficit and public debt as healthcare is a bottomless pit of spending. Cuba could be suffering from any or both of such malady.

Four, it is good news that the Cuban government has invested in medicines innovation and almost surely, generic production. But not being subjected to competition and international healthcare accountability system, I doubt if cases of adverse drug reactions (ADR) and similar problems are being appropriately addressed, like drugs recall and compensation of the adversely affected patients. Patients have no or little options anyway, there is only the government as sole drug distributor and/or manufacturer.

In contrast, in a competitive environment, if an innovator company produces a new drug, supposedly effective but has several ADRs and side effects, the company does not wait for huge public outcry or multiple lawsuits, it has to recall and pull out such immediately before more damages can happen and its entire corporate brand will be destroyed.  

In some reports though, hundreds of Cuban doctors have been migrating to other countries. From The Vincenton Post,

In 1998 there were already 400 Cuban doctors practicing medicine in South Africa’s rural areas. By 2004, there were about 1200 Cuban doctors working in African countries, including inAngola, Botswana, Cape Verde, Côte d’Ivoire, Equatorial Guinea, Gambia, Ghana,Guinea, Guinea Bissau, Mozambique, Namibia, Seychelles, Zambia, Zimbabwe, andareas in the Sahara.” (Source: Perez, L.A., Krull, C. and Marino, S.C., 2010, Cuban Studies 41. PA: University of Pittsburgh Press, pp. 92). 

Meanwhile, Venezuela's dictator Chavez is drying of cancer in a Cuban hospital. From the Investors.com, Hugo Chavez Hit by Cuba's Surgical Strike.

In July 2011, during (a)... summit in Caracas, Brazil's President, Dilma Rousseff, told a few of her colleagues — in private — that Chavez was likely to die as a result of 'his excessive paranoia rather than as a consequence of his serious — yet treatable — cancer,'" wrote Venezuelan consultant Pedro Burelli in a newsletter.

"What she meant to say," Burelli added, "was that by choosing secrecy in Cuba over medical competence at the Sirio-Libanese Hospital in Sao Paulo (where she had been treated successfully for lymphatic cancer) Chavez had condemned himself to a shorter life."

Burelli noted that it corresponded to his own sources, who told him that Chavez's chosen successor, Foreign Minister Nicolas Maduro, flew to Brasilia to meet with Rousseff and her oncologist.

He presented the diagnoses from Caracas and Havana and the Brazilian specialist "considered it treatable under world-class protocols available in his center."

Maduro signaled interest. But the Chavista regime then demanded to pretty much take over the 400-bed hospital, which the Brazilians rejected. "From that moment on the patient was doomed," Burelli wrote....

Too bad for Mr. Chavez, He's got lots of money from petroleum socialism and when he became seriously ill, health socialism in Cuba may not be able to save him. Another news from yahoo: 
Cuba to free doctors from onerous travel rules

By Andrea Rodriguez, Associated Press | Associated Press – Tue, Jan 8, 2013

HAVANA (AP) -- Cuba is eliminating longstanding restrictions on health care professionals' overseas travel as part of a broader migration reform that takes effect next week, an island doctor told The Associated Press on Monday.

Hospital directors learned of the new policy, which takes effect Jan. 14, in a Saturday meeting withHealth Minister Roberto Morales and word of the change was relayed in hospital staff meetings, according to the doctor, who attended one of the subsequent gatherings.

The minister's directive: "A doctor will be treated like any other citizen starting now and can exit freely, as long as the destination country allows it" by issuing an entry visa, said the physician, who spoke on condition of anonymity because he was not authorized to talk to foreign journalists.

"Apparently it has been completely repealed," he said. "No restrictions of any kind.

By indirectly imprisoning many Cuban doctors in their own country, their government has prevented them from acquiring more training and specialized education with more foreign practitioners, using more modern facilities, medications and other  treatment. 

I hope that more economic freedom for their people like free mobility across countries will be tolerated by the Cuban socialist leaders. Similar one-party system China and Vietnam already allow this.

Ultimately, I hope to see more political, economic and personal freedom be experienced by more people around the world. Especially from the clutches of dictatorial and totalitarian governments.
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See also:

Healthcare Monopoly 1: France and Canada September 05, 2010
Healhcare Monopoly 2: United Kingdom, February 17, 2011
Healthcare Monopoly 3: China, July 20, 2011
Healthcare Monopoly 4: Taiwan's NHI, December 05, 2011

Healthcare Monopoly 5: Canada, April 09, 2012

On health socialism

In one of my discussion yahoogroups, I mentioned that I will not vote for Mar Roxas for VP in the May 2010 elections. Though he was the leader of a Liberal party that was supposed to advance liberal politics and liberal economic policies, he chose the socialist policy of drug price control, among others. There was no national health emergency at the time they forced drug price control (May to July this year). There was only political emergency as his then Presidential survey ranking was very low at that time. With high media mileage caused by his endless Senate hearings on price control, his ranking inched upwards. Until he realized that Noynoy is a better candidate than him, at least in their party.

Another member of that list countered, "what do you do with the drug cartel? In India Pfizer sell Ponstan at P3.50 and still made profit. Here it sold it at P43.00."

I replied with 2 points.

First, where's that figure P3.50 vs. P43 coming from? How is the conversion into pesos arrived at? Is the P3.50 price from real Pfizer's Ponstan or a counterfeit Ponstan? I asked that question because we have it here too, super-cheap copy-cat drugs, 1/5 or 1/10 the price of the original drug, and your disease expands.

Second, assuming the price difference is even worse, P3.50 India vs. P100 or P200 in Manila, both by the same Pfizer (or GSK or Roche or Sanofi or whatever pharma). If there is NO competing drug on the same generic or molecular property, then one can say there is a cartel or monopoly. But if there are 20 or 50 other competing drugs from various manufacturers, innovator or generics, what's the fuss? Why insist on buying P43 or P100 from one manufacturer when you can buy a competing drug with supposedly the same curative capacity from other manufacturers selling at only P3, P5, P10?

So long as there is competition, then let us allow any manufacturer or seller to over-price itself out of the market, out of the competition.

One good example is amlodipine(? ), a drug against hypertension. I heard that there are about 200 different drugs from different manufacturers against this disease. So the competition is very stiff, with prices ranging from P11 (or lower) to P44 (or higher). But the envious eyes of the politicians, media and activist NGOs are on Norvasc, made by Pfizer. Before the Roxas-Gloria drug price control policy in late July this year, it was sold at P44 for its customers with Sulit card. After the socialist policy of price control, it was coercively brought down to P22. The goal was to "help the poor" patients.

But the poor won't buy Norvasc at P22. It's still expensive for them. Other products of the same molecule are sold at P11 or lower. So did health socialism help the poor? No. It helped the rich and the middle class who used to buy at P44, now they pay only P22.

Again, my favorite analogy.
There is NO govt. restaurant, NO govt carinderia, NO govt turo-turo, NO govt supermarket, etc., and people are eating.
There ARE many govt. hospitals and clinics, there ARE many govt. drugstores and botica, there IS govt. health insurance, there IS govt. drug price control, and health problems are endless.

Health socialism -- or education socialism, housing socialism, socialism in general -- creates more problems than solutions.
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Part 2

Some people would not consider or admit that drug price control and similar schemes are tantamount to health socialism because the goal of such measures is "to help only the poor have access to medicines."

The current Cheaper Medicines Law (RA 9502) allows "parallel importation" scheme for drugs. Thus, anyone can now import a drug that is currently patented and sold higher in the Philippines, from another country which sells the same drug at a lower price. Thus, importing Pfizer India's Ponstan into the country is technically and legally allowed.

But many doctors, pharmacists, hospital administrators and informed patients are not comfortable with this scheme. Even assuming that the parallel-imported drug is 100% of the same molecule (not counterfeit, not substandard) as the one sold expensively here, there is the question of (a) storage, (b) handling and distribution, and (c) accountability.

Take drug A that specifies it should be stored and handled at temp. range of 15-25 C at ALL time. When it's stored and/or transported at 26 C or higher for 1 hour or more, it will have a lower or lesser effectiveness already. And a patient will either not get well, or develop new disease as the current disease that is supposed to be controlled or killed by a particular medicine, has already managed to mutate inside the body of the patient.

Under a parallel import scheme, the (a) foreign manufacturer, (b) foreign wholesaler or aggregator, (c) local importer and distributor, can be 2 or 3 different entities. They are never the same entity. So if something bad happens to the medicine being imported and given to the patient, and something bad happens to the patient, who is to be held accountable? A or b or c, or the local patent holder, or the physician and the hospital, or the drugstore, or the DOH?

Saving money is understandable. But saving lives is non-compromisable.

That is why I am not in favor of parallel importation scheme, not in favor of compulsory licensing, not in favor of drug price control, not in favor of government use, etc. ALL of those provisions are now allowed in the Cheaper medicines law. That is why I consider the said law as part of health socialism. The promises are holy and unquestionable – cheaper and affordable medicines. But the schemes used and allowed are generally confiscatory.

The law also does not say anything or amend medicine taxation. Such taxes comprise between 13 to 20 percent of the retail price of drugs. So government is a hypocrite, true blue hypocrite, for calling for “cheaper medicines” but is responsible for expensive medicines by slapping the product with various taxes, as if medicines are like beer and hamburger that should be taxed as much as possible.

So again, my 2 simple proposals to lower medicine prices, both of which were not included, explicitly or implicitly, in the cheaper medicines law:

1. abolish taxes on medicines
2. increase competition among drug manufacturers and retailers

I wrote a paper on drug price control, “Access to medicines through politics: Preliminary assessment of drug price control policy in the Philippines”, http://www.minimalgovernment.net/media/mg_20091014.pdf

It’s 33 pages, word document, including annexes and tables. I presented it in an international conference in Singapore last Oct 14-15 this year. There is one table there where I showed there are sooo many multinational pharma companies abroad that are not yet here, that have the potential to further push the competition among innovator manufacturers, but somehow they are not here. There should be some government policies here that scare them from coming in. Which reduces competition.