Refocusing Our Resources

From healthcare to corruption to life expectancy, here's what we can learn from the past decade.
Jan 02, 2010


Michelle Hoffman
Retrospectives of the decade for the pharmaceutical industry will undoubtedly mention US efforts to reform its healthcare policy and the continuing globalization of the pharmaceutical industry. So it's interesting to note the convergence of those two issues in a fact sheet quantifying the price of corruption in the global medicine chain posted in December by the World Health Organization (online Fact Sheet #335).

Among the more striking conclusions of the WHO posting is that a quarter of the more than $4 trillion spent globally on health services every year (including some $750 billion on pharmaceuticals) —a full trillion dollars—is lost to corruption. Much of this corruption goes unreported, the WHO document claims, out of fear of victimization and retaliation coupled with a lack of incentives for whistle-blowers. Such corrupt and unethical practices reduce the availability of drugs and quality healthcare to patients. Countries with higher incidences of corruption also experience higher child mortality rates.


Table I: Costs and consequences of health spending.
Additional WHO statistics shed light on the costs and consequences of various levels of health spending (see Table I). For example, at $6103, the US spends the most per person each year on healthcare, while Burundi spends the least, at $2.90. Although the statistics indicate that $2.90 per person per year is far too little to increase life expectancy, life expectancy does not necessarily rise after a certain spending level is achieved. At $1000, that level falls well below the US annual per capita spend.

WHO's statistics seem to indicate that life expectancy rises logarithmically from 30 years, when the annual per capita spend is $0, to 70 years at an annual per capita spend of $1000, but levels off at that point. The data do not indicate how the increased spending correlates with an in increase in quality of life.

Overall, these statistics suggest that, theoretically, healthcare costs could be cut dramatically around the world by reducing inefficiency and corruption—easier said than done. Also, healthcare around the world might improve significantly if annual spend were readjusted globally so that more people could have access to the $1000 per year that seems to push life expectancy into the upper reaches. At any rate, these statistics indicate that the US may be able to spend a lot less on our health than we now do with no reduction in life expectancy.

If the past decade has taught us anything, it's that resources—natural or manmade—are not infinite. Hopefully, the next decade will find us chastened, wiser, and better able to make judicious use of our medical and healthcare resources.

Michelle Hoffman is editor-in-chief of Pharmaceutical Technology. Send your thoughts and story ideas to