Thomas Lumley wrote a great post today on the unavoidably brutal arithmetic of rationing the budget of PHARAC – the New Zealand government agency that buys drugs for the public health system.
Would you spend $200,000 per drug for two thousand melanoma cancer patients. It doesn’t work 66% of the time, but helps 34% of patients and cures 6% of patients.
The trick in the tail is funding the drug would cost half the entire budget of PHAMRAC.
Many more wonder drugs, more correctly, semi-wonder drugs coming down the pipe, so these life or death decisions will not get any fewer in a world of scarcity.
In 1979, Gordon Tullock wrote a 1979 New York Law Review book about avoiding difficult choices. As per Gordon Tullock, he barely mentioned the books are mainly discussed as a stream of consciousness his reactions to the book. His review was a review of a book by Guido Calabresi and Philip Bobbitt called Tragic Choices which was about the rationing: the allocation of kidney dialysis machines (a “good”), military service in wartime (a “bad”), and entitlements to have children (a mixed blessing). Tullock argued that we make a decision about:
- how to allocate resources,
- how to distribute the resources, and
- how to think about the previous two choices.
People do not want to face up to the fact resources are scarce and they face limits on their powers.
To reduce the personal distress of making these tragic choices, Tullock observed that people often allocate and distribute resources in a different way so as to better conceal from themselves the unhappy choices they had to make even if this means the recipients of these choices are worse off and more lives are lost than if more open and honest choices about there are can only be so much that can be done.
The increasing number of both wonder drugs and semi-wonder drugs that cost the earth will increase the importance of facing up to difficult choices more honestly than in the past.
Utopia, you are standing in it! 
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