Value creators and extractors

The Value of Everything: Making and Taking in the Global Economy

The rethorics of value is usually plagued with deliberate misunderstandings. Specially, those that quote themselves as value creators may appear on a close look as a value extractors. This is precisely what the book of Marianna Mazucatto does. It identifies the patterns to assess value creation and extraction and the private of public and private roles.Chapter 7 on Extracting Value through the Innovation Economy is specially helpful. You'll find there the patents as a value extraction process or the pharmaceutical pricing discussed in detail. Therefore, a must read.

In modern capitalism, value-extraction is rewarded more highly than value-creation: the productive process that drives a healthy economy and society. From companies driven solely to maximize shareholder value to astronomically high prices of medicines justified through big pharma's 'value pricing', we misidentify taking with making, and have lost sight of what value really means. Once a central plank of economic thought, this concept of value - what it is, why it matters to us - is simply no longer discussed.

 The logical outcome of a combination of monopoly and rigid demand is sky-high prices, and this is precisely what is happening with specialty drugs. It explains why pharmaceutical companies enjoy absurdly high profit margins: in addition to the normal profit rate, they earn huge monopoly rents.59 A value-based assessment of the kind NICE carries out can be helpful because it reduces demand for the monopolists’ drugs and prevents them from charging whatever price they choose. The downside, however, is that increased elasticity of demand for drugs comes at the cost of leaving some patients without the medicines they need, because pharmaceutical companies may not cut their prices enough to treat everyone who needs the drug if doing so would reduce profit margins by more than the companies want.

The improvement of the healthcare access and quality

Measuring performance on the Healthcare Access and Quality Index for 195 countries and territories and selected subnational locations: a systematic analysis from the Global Burden of Disease Study 2016

While the global consensus on universal health care is a fact, healthcare access is really diverse. Among countries you can check the differences in the new article that has appeared in Lancet.

From 1990 to 2016, 186 of 195 countries and territories significantly increased their HAQ Index score, with several middle-SDI countries, including China, the Maldives, Equatorial Guinea, Peru, and Thailand achieving among the most pronounced gains. 

 In 2016, HAQ Index performance spanned from a high of 97·1 (95% UI 95·8–98·1) in Iceland, followed by 96·6 (94·9–97·9) in Norway and 96·1 (94·5–97·3) in the Netherlands, to values as low as 18·6 (13·1–24·4) in the Central African Republic, 19·0 (14·3–23·7) in Somalia, and 23·4 (20·2–26·8) in Guinea-Bissau. The pace of progress achieved between 1990 and 2016 varied, with markedly faster improvements occurring between 2000 and 2016 for many countries in sub-Saharan Africa and southeast Asia, whereas several countries in Latin America and elsewhere saw progress stagnate after experiencing considerable advances in the HAQ Index between 1990 and 2000. Striking subnational disparities emerged in personal health-care access and quality, with China and India having particularly large gaps between locations with the highest and lowest scores in 2016. In China, performance ranged from 91·5 (89·1–93·6) in Beijing to 48·0 (43·4–53·2) in Tibet (a 43·5-point difference), while India saw a 30·8-point disparity, from 64·8 (59·6–68·8) in Goa to 34·0 (30·3–38·1) in Assam.

 The measurement has been done with 32 causes from which death should not occur in the presence of effective care to approximate personal health-care access and quality by location and over time. This means that death registries should be available and reliable, and we know that there is no standard practice across countries. Anyway, the message is clear, most of the world is improving access to better healthcare and this is good news.

Aminata’ (2013) by Omar Victor Diop

Evorafrica exhibition

The p53 nightmare

p53 and Me

This week you'll find a short piece in NEJM, a story written by a physician on how detecting a genetic p53 mutation changed her views. Key message:

Genetic knowledge is power only if both clinician and patient are equipped to move beyond a result and toward action, even if that merely means living well with what we know. I believe we need an expanded definition of genetic counseling; we require more data, yes, but also more sophisticated and sensitive ways of assimilating such data. And not just into databases we can mine to see what happens to people like me, but into programs for learning to live with uncertainty.

A must read