
Illinois governor signs law capping insulin costs at $100 per month - ga-vu
https://www.nbc15.com/content/news/Illinois-governor-signs-law-capping-insulin-costs-at-100-per-month-567282431.html
======
Someone1234
I'm really past the whole "pharma need to charge high prices to fund research"
line of argument. Aside from being factually untrue (research funding is
dwarfed by marketing for example[0]), it is also arguing for a continued
unhealthy relationship with pharmaceutical care.

A large amount of research is currently publicly funded. Either via public
academic research or directly. When that research bears fruit it is often
given away almost at-cost (or below cost when you take into account the larger
research landscape) to pharma companies who then privately profit off of it.

Pharma companies are profiting off of your tax dollars and then turning around
and profiting off of you too. Sure, the benefit exists, but this whole model
is broken as all heck.

We should just scarp for-profit pharma development as an industry, increase
public funding of research, and drug production factories should be a modest
profit venture (e.g. 20% of the wholesale cost). Looking more like the
generics industry today, where they produce, they don't develop.

Why do we need a private business to develop drugs at a 40%-1000%+[1] margin
when the taxpayer could do it at nearly 0% margin? We've chosen to make it
this way, other countries haven't, and we see plenty of drugs developed via
public institutions around the world.

[0]
[https://www.bbc.com/news/business-28212223](https://www.bbc.com/news/business-28212223)

[1]
[https://economictimes.indiatimes.com/industry/healthcare/bio...](https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/retail-
margin-on-generic-drugs-may-be-as-high-as-1000-claims-
study/articleshow/58252850.cms?from=mdr)

~~~
ptah
> research funding is dwarfed by marketing for example

i really believe pharma advertising should be banned

~~~
ollie87
It is where I live, so weird visiting the US and seeing "ask your doctor for"
adverts.

If I asked my GP for a specific medication they'd look at me like an alien.

~~~
umvi
On the other hand, I hate the general attitude of "don't question your doctor
or do your own medical research; the doctor knows what's best"

Doctors are mortals too and can only have so much time to draw on info they
crammed X years ago. Patients can quickly become more expert than GPs with
regards to their own diseases, especially if they have months to research it.

Anecdotal example - my sister had a wierd skin condition in high school. My
mom researched skin images and symptoms for hours and hours and concluded it
was shingles. My Mom then brought her in and discussed her findings with the
GP who scoffed and said she was far too young for it to be shingles. He then
admonished my mom for doing her own research. Long story short and one
embarrassed GP later, it was shingles.

~~~
intopieces
> Patients can quickly become more expert than GPs with regards to their own
> diseases, especially if they have months to research it.

Waking into a 15 minute appointment with months worth of research seems like a
bad way to approach collaboration with healthcare professionals. Or do people
still have personal relationships with doctors outside the appointment window?

It seems like GPs have become dispensers of medicine rather than care.

~~~
umvi
The only people that do months of research are those with a chronic disease
(diabetes, cancer, Lyme, etc.)

However, many people will at least do several hours of research before going
into the doctor

~~~
amyjess
Regarding chronic disease...

So I have a friend with Hashimoto's. Before finally being diagnosed, she had a
long history of being misdiagnosed, blown off, and having her symptoms
dismissed as nothing. After being diagnosed, she connected with a number of
other Hashimoto's patients and sufferers of chronic illness in general and
found out that pretty much everyone she's talked to has the same stories.
Constant invalidation, ignoring of symptoms, doctors just plain not listening,
until they finally find someone who actually knows their stuff.

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andrewla
Unfortunately, this does not act as a price control. This just mandates that
insurance companies cap the out-of-pocket expense; it does nothing to affect
the retail or wholesale price of insulin except insofar as insurance companies
can push back on drug manufacturers.

Net effect of this is yet to be seen, since it doesn't go into effect until
2021, but one possibility is that insurance companies will only cover variants
of insulin that are cheaper than the allowed maximum, or the value that they
calculate allows maximum extraction of value. Or, alternatively, the price of
insurance will rise to spread the cost among all covered people.

The fundamental problem is that insulin should be a commodity, but it is not.
Baseline human insulin is actually available fairly cheaply; ~$25 for a
month's supply. But pharmaceutical companies have developed and sell a variety
of faster-acting and longer-release insulin analogs of increasing price; and
although many of them have technically fallen out of patent protection,
generic makers have been slow on the uptake and manufacturers have done
various tricks (relabeling, etc.) to ensure that they can maintain their
effective monopoly.

There's something deeper that is wrong here that is preventing the market from
working as it should be working; that is, generic makers making fast-acting
insulin cheaply and driving the price down to the marginal price of
production.

~~~
choward
You're right. This is terrible. Here's an excerpt from the bill:

> Provides that insurers that provide coverage for prescription insulin drugs
> must limit the total amount an insured is required to pay for a covered
> prescription insulin drug to $100

This will create way more problems than it solves. It continues to hide the
true cost from the consumer. This doesn't affect the pharmaceutical companies
or insurance companies at all. What it will due is just make the insurance
companies charge everyone a little more. The corporations are not affected
whatsoever.

~~~
jngreenlee
Wouldn't it be much more meaningful for the Sate of Illinois to say they will
buy a State-managed insulin supply, for which they will guarantee access by
State residents at $x/Month?

Easy to make something unallowed on paper. Much harder, and more meaningful,
with Skin in the Game, to actually go out and do what they may think their
rules will accomplish.

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andrewla
I don't know why new outlets make the actual factual information for these
things so difficult to find. Can't they include the bill number or link to the
bill itself? The actual bill text is here [1] and the record leading up to its
passage is here [2].

[1]
[http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name...](http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=101-0625)

[2]
[http://www.ilga.gov/legislation/BillStatus.asp?DocNum=667&GA...](http://www.ilga.gov/legislation/BillStatus.asp?DocNum=667&GAID=15&DocTypeID=SB&LegId=116604&SessionID=108&GA=101)

------
outlace
Has there ever been a price control experiment that hasn't resulted in even
worse problems?

~~~
gruez
Other developed countries have price controls (more specifically, government
negotiated prices) and it seems to be working well for them.

~~~
snapetom
> government negotiated prices

That's what we _don 't_ have in the US. You can certain make the case that we
should, but that's a separate argument. Now we have a situation where we have
a flat out price control, and it's going to have unintended consequences
written all over it.

All these arguments for "look at Europe" doesn't fly in health economics.
There are not subtle differences in the US legally, infrastructurally, and
culturally.

~~~
mattrp
Along similar lines, I read a study nearly twenty years ago and I wish I could
find it for these very recurring government vs market debates. The study
evaluated prices between single payer countries and found that it wasn’t the
collective bargaining that reduced prices in those countries. They observed
that there was no correlation between the size of the single payer and
pricing. Rather, it was that the pharma adjusted price to minimize
counterfeiting and black markets. In countries where black markets and
counterfeiting risks were high, the price was lower. Ironically the decision
to lower gave some single payers added incentive to participate in arbitrage.
One country would be so low the country itself decided they could arbitrage
their Higher priced neighbors by selling off their excess through undisclosed
side deals. You see a variant of this example playing out between Canada and
US. The article talked about individual black markets and state backed black
markets that would emerge as a result of these single payer deals... which
were supposed to be confidential but of course the black markets allowed
pricing information to leak causing everyone to demand lower prices...
everywhere except the US which essentially subsidized all of these below
market deals that give the appearance that collective bargaining is superior.

Edit: another thought comes to mind - has anyone compared the size of health
insurers in the US and compared their purchasing power to government run
single payers? I’d hazard a guess that United Health for example probably
dwarfs entire single payers of some governments.

~~~
chimeracoder
> Edit: another thought comes to mind - has anyone compared the size of health
> insurers in the US and compared their purchasing power to government run
> single payers? I’d hazard a guess that United Health for example probably
> dwarfs entire single payers of some governments.

Medicare alone covers more patients than NHS England does. (Very few countries
in Europe actually have single-payer healthcare; the four UK countries are the
exception, not the rule).

~~~
marriedWpt
Medicare isn't one gigantic entity though.

You get a Medicare provider, with an insurance company that you work with.

Yeah there's lots of layers of bureaucracy.

~~~
chimeracoder
> Medicare isn't one gigantic entity though.

Correct

> You get a Medicare provider, with an insurance company that you work with.

Well, no, the majority of Medicare patients still receive their inpatient and
outpatient benefits through Medicare. A (growing) minority receive their
Medicare benefits through a private insurer.

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nybble41
The media doesn't seem to be reporting the actual name or number of the bill,
so I thought I'd save someone else the trouble of hunting down the full text:

SB0667 - Illinois 101st General Assembly

PRICING-PRESCRIPTION INSULIN

[http://www.ilga.gov/legislation/billstatus.asp?DocNum=0667&G...](http://www.ilga.gov/legislation/billstatus.asp?DocNum=0667&GAID=15&GA=101&DocTypeID=SB&LegID=116604&SessionID=108)

------
dopylitty
Ultimately non profits or the government should produce insulin and other
medicines to sell at cost. This sort of law will hopefully be a step in that
direction.

~~~
conanbatt
And who would decide what the cost is if the government makes it?

------
vasilipupkin
everyone tearing their hair out over this: the effect of the law is just that
insurance overall will be somewhat more expensive in Illinois. There won't be
any effect on research or innovation or anything else. Everyone will have to
chip in a bit to make sure people with diabetes don't go without insulin. I
don't see this is as a big disaster. Illinois has much bigger problems than
this.

If people foregoing insulin because of out of pocket cost is a problem in
Illinois, fixing it could have positive effects, including positive fiscal
effects. So net cost is probably quite small.

~~~
vmchale
> Everyone will have to chip in a bit to make sure people with diabetes don't
> go without insulin.

Would be nice if there were actual price controls at the federal level.

~~~
vasilipupkin
why? this is better. Every state can do whatever it wants. What's wrong with
that? why have one size fits all solutions?

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jessaustin
Wow, Pritzker is on a roll. Legalizing pot, reviving horse racing, now
defending diabetics. Why can't my state have a good governor? Do we need to
send a bunch of former governors to prison first? I'm willing to do that!
Heck, I think _most_ people would be fine with Greitens in prison...

~~~
jwbwater
Do you want our drastically under funded state pension system too? Illinois
wants revenue anyway it can it, selling pot, gambling, whatever. What's wrong
with Missouri?

~~~
jessaustin
You can't really blame an underfunded pension system on somebody who has been
governor for a year. Illinois pensions are like many municipal pensions: they
were unreasonable the day they were negotiated, and have only grown less
reasonable over the many decades since.

There are _lots_ of things wrong with Missouri. Our justice system is brutal
to poor people and basically corrupt. Still, our cities are quite violent
relative to other cities in USA. The "Department of Natural Resources" has
rules to protect the environment, but very few of them are ever enforced
against those who are willing to ignore them. (The one time I followed this
trail all the way down the rabbit hole, the "Chief of Compliance and
Enforcement" claimed that the courts always overrule him when he does choose
to do his job, so this issue could be related to the first.) Important
infrastructure is allowed to deteriorate while vanity projects get top
priority. As a state, we'll vote for Trump again later this year, even though
it's clear at this point that his previous anti-war rhetoric was nothing but
lies. And so on...

------
Zenst
Even at that level, it's a markup that even Apple has never come close too.
Yes, this is a start, but it is the back of the field and has a long way to
go. Sadly it won't be until 2030 when that happens, which AFAIK is when
patents expire.

[https://www.businessinsider.com/insulin-prices-could-be-
much...](https://www.businessinsider.com/insulin-prices-could-be-much-lower-
and-drug-makers-would-still-make-healthy-profits-2018-9?r=US&IR=T)

------
pjc50
How likely is this to survive legal challenge?

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sorrymate
Best line in the very short article “Health care is a right for all, not a
privilege and that is why I am so proud that we created an insulin price cap
that successfully puts patients above profit,” according to Gov. JB Pritzker.

~~~
efa
I hate the constant misuse of the word "right". How would a country guarantee
this right? What if every doctor in the US quit tomorrow? What if I decided to
live on the top of a mountain where there is no population? How does the
government guarantee my right to healthcare? Rights are around restrictions. I
have the right NOT to be killed. I have a right NOT to be silenced. When
something requires someone else doing something and giving it to me - that
can't be a right.

~~~
jxramos
Negative rights seem to be those more amenable to guarantees since they ask
little. The guarantee of positive rights assumes a bunch of prerequisites from
what I understand (some of which like healthcare are predicated on a ton of
upfront infrastructure and training and availability and so forth).
[https://en.wikipedia.org/wiki/Negative_and_positive_rights](https://en.wikipedia.org/wiki/Negative_and_positive_rights)

~~~
homonculus1
"Positive right" is just political marketing for privileges. Universality is
implicit in the notion of rights, e.g. treatment that every human has a valid
claim not to be subjected to and which must be observed in order to have a
civil, liberal society. The enumeration of specific protections may have to
change with technology, but the underlying principles do not short of radical
psychological/physiological alteration as a species. If we abandon that
concept then rights have no meaning, they're just a list of popular demands
which can shift arbitrarily, and including privileges does just that.

It's obvious why people are in favor of them of course, but we have to be
honest about what it is we're asking for and why instead so we can make a
rational analysis of it, instead of torturing the intellectual and moral
foundations of our culture to make something outside of it fit. And it's
foolish not to be suspicious that politicians' incentives have basically
everything to do with making promises that get votes, and basically nothing to
do with actually making the system work long-term.

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csense
Is it possible that drug companies will all decide to stop selling insulin in
Illinois as a result of this, forcing every diabetic to travel to another
state every time they need an insulin refill?

------
justinzollars
I think this is a naive approach. We could price cap anything. Homes in San
Francisco for example. The result will be rationing and shortages. It won't
solve the fundamental problem. They key to bringing prices down is to remove
barriers of entry. We need to flood the market with more insulin, or with my
SF housing example flood the market with many more houses.

~~~
vmchale
> They key to bringing prices down is to remove barriers of entry. [sic]

Or just set price controls

~~~
AJ007
* to bring advertised prices down. Those may be superseded by black market prices or augmented with lines and waiting lists.

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defertoreptar
Shouldn't this figure be tied to the CPI?

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egdod
> “Health care is a right for all, not a privilege“

In that case, charging people even $100 a month is unconscionable. It needs to
be free, just like food, housing, entertainment, and all the other inalienable
rights.

------
williamDafoe
Just like the neighborhood drug pusher, big pharma companies give away free
samples. Turns out that in the case of opiates, your neighborhood drug dealer
and big pharma coincide.

------
sammycdubs
Ok, now do all other generics that are cheap to manufacture.

~~~
jibe
Generic is already around $100, this is targeting non-generic, newer more
effective insulin. If you force drug companies to sell their new inventions is
the generic price, there will be no more new inventions.

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alexmingoia
Patents are the problem, not the market. Patents are government protectionism.
They are a government imposed monopoly — a government imposed cap on supply.

In a free society and a free market, anyone with the knowledge and means to
produce insulins would be free to do that.

The high prices are a direct result of the government preventing competition
through patent law. Without patents, the price would tend to fall as companies
compete on price, more efficient manufacturing, distribution, etc.

------
honksillet
Coming soon to Illinois, insulin shortages.

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aaomidi
This sounds great but I would've liked to see them:

\- Protect people without insurance. Usually they're the most vulnerable.

\- Don't just force someone to pay for the Insulin. These companies making
them don't need to become richer. Take it from them forcefully.

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pcvarmint
Expect shortages to occur during periods of high demand.

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jobseeker990
why isn't there a generic for insulin?

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cartercole
_screams in libertarian_

------
cjfd
It may very well be quite true that the price of insulin is too high but price
controls really are not that great. If the price now is to high, $100 probably
still is too high. Also, in the more general case (not for insulin, obviously)
pharma does need to recover its research costs and who is going to say what is
a good price and what not. You know, capitalism actually kind of works and
price controls just don't.

There actually is a capitalist solution to the problem of high medicine
prices. That is for pharma companies to have to post a price of their patents.
And when somebody is willing to pay that price they do get the patent for
exactly that price. After that you tax the value of the patents at a somewhat
high percentage. This way, if the price of the medicine is to high relative to
the posted value the state or perhaps the insurance companies could just buy
the patent. On the other hand if the price of the patent is too high relative
to the price of the medicine there is no real problem. In the case where both
are too high but it is not the case that one is higher than the other the
state should just funnel the money that comes in through the tax back to
whoever needs to buy the medicine at a the high price.

~~~
zentiggr
You're way overthinking this.

What needs to happen is, again and again with health care issues,
transparency.

Manufacturers should be required to declare and with audits prove how much
they're spending to manufacture everything. Then everyone can see the price
they're being charged and figure in their head what sort of markup they are
being charged.

Then we can start to push back on the companies need to recoup primarily
_marketing_ costs and dividends and bonus programs and all the other padding
that they have built up over decades of never being held accountable.

~~~
i_am_nomad
Should anyone buying that insulin have to divulge how much money they make a
year and what other things they spend their money on, so that the manufacturer
can figure out how much to charge?

~~~
zentiggr
Nope. I don't think patient details are required for determining an equitable
markup per drug. It's the companies that are relying on the relative
invisibility of their pricing decisions that have all the power in the current
dynamic.

A reasonable percentage can be arbitrated once the process is in public view.

