The Sickness in Sicko - Part III (I, Tamoxifen)

This is my final part of my three part series addressing Michael Moore's prescription for health care: Profits of pharmaceutical companies must be strictly regulated like a public utility.

Part II is sufficient to argue against Mr. Moore's point above. However, I want to look at pharmaceutical profit regulation in this essay from the perspective of tamoxifen, the anti-breast cancer agent.

I, Tamoxifen (inspired by I, Pencil by Leonard E. Read)

(information from Wikipedia.org)

I am a selective estrogen receptor modulator familiar to those suffering from breast cancer as Nolvadex, Istubal, and Valodex. Targeting the estrogen receptor is all I do. You would think I am cheap to make, so why would pharmaceutical companies charge an arm and a leg to produce me to help people. That doesn't seem fair.

Well consider all that has to happen in order to manufacture me. First, I need to be synthesized. This synthesis pathway was conceived after hundreds of trial compounds failed to show promising results against breast cancer. Determining my correctly active structure took a team of pharmacologists, clinical scientists, biochemists and organic chemists.

Once my final structure was determined after years of work I need to be manufactured. Specialized organic chemists need to synthesize (Z)-2-[4-(1,2-diphenylbut-1-enyl)phenoxy]-N,N-dimethyl-ethanamine from purely starting materials. I have three benzene rings, one double bond, a phenol group ether conjugated to an amine group. If anything goes wrong, I do not work the way I should. Even worse, I may poison the person who takes me as medicine. Finally, even if all the atoms are arranged in the right order, they have to be arranged geometrically to work. I have to be the right isomer.

Synthesis involves either a stereospecific or non-stereospecific organic chemical reaction pathway (see Synthesis of Tamoxifen). The non-stereospecific starts with a simple Friedel-Craft acylation involving Anisole and Phenylacetic acid. The acylating agent in this process is a mixture of PCl5 / SnCl4. The ketone is was formed in a 78% yield.

Then, alkylation is promoted by treating the ketone with Sodium hydride (NaH). This removes the acidic protons (located on the position alpha to the carbonyl group) to produce the enolate ion. This could be isolated as the sodium enolate of the ketone treatment of this with ethyl iodide resulting in the formation of a compound in a 94% yield. The Ethyl iodide is chosen as the acylating agent probably as it contains the iodide ion, which is an excellent leaving group. It can therefore facilitate an SN2 substitution reaction with relative easy.

There are another four steps of similar complicating reactions. Each one involved hours of analysis, imagination, and work by a team of organic chemists. These organic chemists are human beings who need to be fed and who have families. They need to be paid competitively in order to stay with the company and one day retire to enjoy their families.

Finally, once I am a final drug entity, I need to be formulated as an oral tablet. Since the amount I exist in the final drug form is so small, I need to be mixed with inactive ingredients in order to get to where I need to work in the body. First step is to mix me with filler. Another ingredient is added so that when I'm pressed into a tablet there is no friction on the die wall press. Finally, identifying markers are engraved on the side of my tablet so that health professionals can identify me from other tablets.

All of these manufacturing processes take years of research and time. A team of chemical engineers and technicians guarantee that I remain stable throughout the manufacturing process. They need to make sure I don't degrade as I'm made. They need to make sure I dissolve in the stomach quick enough so I am absorbed. They also need to make sure that manufacturing me doesn't cost too much.

Finally, once I am my final tablet form, investigators need to make sure I am safe. They test me first on animals to see if I don't cause too much harm. Then they test me on healthy volunteers. Finally they test me on patients. All of these tests and investigations require a team of experts, clinical scientists, nurses, and volunteer patients.

As all of these tests are underway, I need to be approved by the FDA. This requires a team of lawyers and clinical scientists to make sure I am presented to the FDA as a safe and effective treatment for breast cancer. Finally, once I am approved, the pharmaceutical company needs to inform health professionals of my existence. Health professionals are too busy to keep up with the newest drugs. So in order to get me to patients, the company needs to market me.

So, you can imagine what all this costs. I am yet not a finished product. I have a black box warning from a side effect discovered after I went to market:

Tamoxifen Black Box Warning
Serious/Life-Threatening Events
serious, life-threatening, and sometimes fatal events in risk reduction setting (ductal carcinoma in situ and high breast CA risk women) incl. uterine malignancies (endometrial adenocarcinoma and uterine sarcoma), stroke, and PE; discuss potential benefits and risks of tx w/ women in these populations considering decr. breast CA risk; tamoxifen benefits outweigh risks in women already diagnosed w/ breast CA

So, pharmaceutical companies need to make better drugs than me. They need to make drugs that are more effective and have less side effects. In order to do so, the profits made from selling me have to make up for the cost of making me so that new drugs may be developed.

IF THESE PROFITS WERE REGULATED THERE WOULD BE NO NEW DRUGS.

The Sickness in Sicko - Part II

The following is my second part in a series of my objections against Michael Moore's film Sicko, and particularly his 2nd prescription for health care:

Private, for-profit health insurance companies must be abolished.

von Mises writes in Profit and Loss, "Now one of the main functions of profits is to shift the control of capital to those who know how to employ it in the best possible way for the satisfaction of the public. The more profits a man earns, the greater his wealth consequently becomes, the more influential does he become in the conduct of business affairs. Profit and loss are the instruments by means of which the consumers pass the direction of production activities into the hands of those who are best fit to serve them. Whatever is undertaken to curtail or to confiscate profits, impairs this function. The result of such measures is to loosen the grip the consumers hold over the course of production. The economic machine becomes, from the point of view of the people, less efficient and less responsive."

The role of profit and subsequently loss is to reward the entrepreneur for their efforts in creating products and services that the consumer values. What would be the consequence for the removal of for-profit insurance entities? There would be no rewarding of innovation for services that deliver the hedging of risk for the health consumer. By removing for-profit entities and placing insurance provision in the hands of government, you remove the power of the individual consumer to vote via the communication of prices. You remove the power of the consumer to dictate to the insurer entrepreneur the value their products and services has in the marketplace.

I repeat what I stated in Part I. There is no cure for a lifetime of damage done to the body from smoking, poor diet and lack of exercise. What people ill-assume is that more health care is the answer to the failing health care economic system. The innovation needed is before visiting the doctor. We need innovation to align incentives of every actor in the system toward preventive health choices.

Private insurers are beginning to move towards preventive health rewards. By allowing more than one insurer to compete privately, each has an incentive to innovate toward this objective. A single insurer provider as Mr. Moore suggests in his 2nd prescription would remove this innovative incentive.

The Sickness in Sicko - Part I

This is part one in a series where I challange Michael Moore's Prescription for Health Care. Mr. Moore's first proposal is that every American must have full, uninterrupted health care coverage for life.

"every American"

What determines American? Is it American citizen? What about a visitor who is accidently ill? What about illegal immigrants? Should we deny them coverage? Let's suppose we are generous and say everyone who inhabits our borders is American and should have full, uninterrupted health care. Illegal immigrants do not pay taxes. Is it fair for them to receive health care paid for by some else's tax dollars? Should they get it for free?

"must have full"

Who determines full? If the full health care, Mr. Moore is imagining, was possibly available, there would be no economic system of health care. There would be no need to determine how to allocate a scarce resource. Let's suppose we want to allow full health care available. Let's even suppose government had the funds to deliever that to "every American". How would the distribution be determined? Who could fairly distribute this resource? Health care providers who are experts in their field already dispute regarding the choices of therapy regimens.

"uninterrupted for life"

How would uninterrupted be determined? For example, how would hospital discharge (a big cost saver in health care) be determined? If capped reimbursement incentivized hospitals to decrease hospital stay, how much more would a single government provider?


The urge to implement comprehensive health coverage stems from a belief that the market failures of health care are due to a lack of government regulation. Kirzner writes in The Perils of Regulation, "the urge to regulate, to control, to alter these outcomes must presume not only that these undesirable conditions are attributable to the absence of regulation, but also that the speedy removal of such conditions cannot be expected from the future course of unregulated market events."

I believe the market failures Sicko addresses are not due to a failed government system but to an epidemic of unhealthy lifestyles that cannot be supported economically. Preventable illness comprises 80% of the burden of illness and 90% of all healthcare costs. Preventable illnesses account for eight of the nine leading categories of death. No medicine, surgery or treatment can reverse the damage caused by a lifetime of smoking, poor eating and lack of exercise. By simply increasing treatment that buys time, ignores the inevitable need to align patient's economic incentives toward healthy living. This is the innovation needed in the economic system of health care, not just more health care.