This would end this sort of preferred drug shifting, it would end the game of state Medicaid often mandating the name brand rather than the generic because most of the money is federal and the state receives a big enough rebate that it's cheaper for them. Applied internationally (we don't have direct authority over foreign drug companies but we could make it a condition of importing them to the US that they follow our pricing rules) and the big subsidy to the UHC countries goes away.
Then you only sell the drugs that do profit, and stop making the ones that cost money. You cant make people do what they don't want to do, pharma is no exception.
The source of this problem is patent law, importation restrictions, etc. In short, competition.
This is the situation we're in now. Just different people shoulder differing amounts of the cost. Equal pricing won't change the fundamental economics of drug research.
Cost-shifting is a valuable effect in the pharma industry, because high profit-margin technology might subsidize low-profit high cost drugs.
Price differentiation is usually net positive effect, but being inequitable people have a reaction against it and more so in health related services. If you could only sell 1 type of seat in an airplane, for example, you would have lots less flying than today, by reducing the amount of rich people flying business/first because of loss of quality, and by reducing the median/average person because of increased cost.
So yes, from an economic standpoint, equal pricing has an effect on the research and development of a product. This should be obvious in this community, for example, look at Google. Almost everything loses money but search. Equitable pricing would make search cheaper, and all the other services paid.
It makes me ponder a "highest negotiated salary for $position" approach to combat income inequality
The price that Medicaid plans pay is either 23% less than the average price paid or the “best price” (if lower).
When this was instituted, drug companies actually pulled back on their discounts to non-Medicaid accounts, so as to not trigger the “best price”.
I agree that on non-generic drugs that the price would likely remain high - however if everyone paid the same rate (low or high) then it would at least discourage some of the type of pricing we see now where a procedure is provided below cost to a specific group of users to make sure those members (i.e. customers of specific insurance companies) are able to be kept "in network", while charging much, much higher rates to others to make up the difference.
Part of the reason healthcare is expensive is that the entity paying for the product is not the customer of the product. When the customer pays, the customer becomes price-sensitive and markets work the way they're supposed to: Prices go down. Since insulin is inherently cheap, making everybody pay for it out of pocket would be both humanely reasonable and it would stabilize prices.
Every pricing decision undergoes a cost-benefit analysis. If I know that offering a small account a lower price means everyone gets that price, I’d be willing to lose all business to the smaller account because in the end I get more money.
A much better proposal would be no net pricing. The price that everyone pays is public knowledge.
When I got to the pharmacy, I was amazed to learn that it would cost us ~200 USD each time I needed a vial, which I would not be able to afford; I had pet insurance, but it wasn't any help.
I have family in Brazil. Identical medication is sold there for around 10 USD. By "identical" I mean exactly the same -- including brand name (Eli Lilly). Thus, every time a family member was coming to the USA, they'd bring me a few vials purchased from a local pharmacy that honored our US-issued prescription.
The price difference is shocking. I can only imagine the despair of many Americans who cannot afford the insulin they need and have no access to alternative markets such as I had.
You probably know this better than I, but the doctor advised us that Humulin N and Novolin N are not interchangeable; while they are the “same” insulin (NPH), the manufacturing process is different, affecting dosage.
In our pet’s case, the Dr. had conducted a series of exams to determine Humulin N dosages — which he advised us we would have needed to redo if we switched her to Novolin.
I think in humans it is easier to get blood readings, but in the dog’s case the Dr. needed to keep her in hospital to do a series of “curves;” this was expensive, so we did not want to redo.
Seems like this is a fairly minimal component. Per the chart at https://twitter.com/odavis_/status/930094350478045184, the price has gone up 10x in the last twenty years or so. It has presumably not gotten more difficult to manufacture.
As the list price rose and rebates grew, Novo ended up paying more and more rebate money into the health insurance system. Employers used these extra payments to offset costs in any area, including hospital and physician payments. Health plans used them to reduce premiums and also offset other healthcare costs. PBMs retained a portion of these rebates as their profits.
> Even as insurers’ drug spending has grown slowly, critics say the rebate game has served to inflate the list price of drugs, which consumers are increasingly responsible for paying. This is especially true for expensive specialty drugs, which treat serious conditions like cancer and multiple sclerosis — and whose prices have been skyrocketing.
> As the cost of these products has gone up, insurers have raised deductibles and out-of-pocket contributions so that many of the sickest Americans must now pay thousands of dollars a year to cover their drug costs. These out-of-pocket costs are calculated using something close to the list price of a product, not the net price.
Sometimes the discount is so big that 20% of the list price is more than the entire net price of the drug.
It's plausible that that could contribute significantly to price increases. Not, to be clear, that I'm defending that or the actions described in the NYT article.
It's not that, it's that the cancer treatments are non-optional. Optional treatments have the luxury of price comparison and choosing the perfect vendor - cancer waits for no man and it shouldn't be the market deciding whether someone lives or dies.
I think opinions like yours above always stem from the naive assumption that all life is worth infinite at any point, so any obstacle to prolong it is a failure. Well, its not. Some treatments are expensive and cost is definitely something to take into account.
If you get cancer and the treatment to save you is 100 million dollars, you better have them, because other people should not pay for that lavish expenditure.
Countries dont even match their flu-shot vaccination recommendations, let alone multi-million dollar treatments.
This is utterly wrong on the face of it.
I know plenty of cancer patients who got referrals to several of oncologists, interviewed them, then selected the one they thought was best equipped to treat their cancer.
I would tell you location beats quality every day.
Its just that insurances are picked by employer, so again, no way to compete.
The economics of the system are complex, but healthcare is far from being a "free market" as it is right now.
Medicine as a whole will be looked back upon very poorly with how it handled diet, sleep, sunlight exposure, etc.
For reasons poorly understood (though there are many theories) most people have a difficult time changing whatever lifestyle was hurting them in the first place. People also have a poor model of how health care works (most people seem to think it's like getting your car fixed: go to "mechanic" and have problem fixed). Finally the educational level that needs to be addressed is quite low (e.g. the FDA requires that medical labeling assume a fifth grade eduction; since most people take two headache tablets, most are set at a level where two is not dangerous, etc).
Thus, for example, the ADA diet advice recommends you have a "small" amount of carbs ("have a smaller slice of cake, or have an orange instead") in the hope that at least they can reduce the severity of the symptoms. Too large a goal might lead to no compliance at all.
And the actuaries at the insurance companies have figured out the lifetime cost of putting someone on maintenance therapy vs more aggressive treatment that in most cases people won't follow.
A case in point: I was diagnosed with prediabetes and my endocrinologist would only prescribe mainline treatment without additional investigation. Legally she could order any test she wanted but not only would the insurance company bounce anything nonstandard (by their standards) but the hospital management would hassle her as well. I was lucky: I had the money and the education to find and work with a different doctor and found an underlying illness. Once treated, a bunch of symptoms (of which diabetes was just one) went away. The system is not set up to help people like me (though sadly it's not clear how it could even with infinite funding).
> The answer is all of the above. But what’s most enraging is that drug manufacturers, P.B.M.s and insurance companies don’t have to pick up the pieces from the real-world consequences of their policies. That falls to the patients.
I think this is an important and balanced quote. Often in the public debate, drug pricing and access, which are two separate concepts, are conflated. A drug can be priced fairly but be inaccessible to patients because insurance companies and PBMs want to hold costs down. This often happens with drugs that treat lots of people. Because of the high volume, insurers will have massive expense for covering a drug, even at fair (i.e. Cost effective) prices. So they fight tooth and nail (often using the media as a weapon) to reduce price. Drug manufacturers won't lower price (often bc they will lose money if they do), so insurers deny
An example of this is CAR-T therapies. Cost effectiveness research shows that cost per QALY is within acceptable ranges but payers make it hard to get the drug. I think the same was true of the curative hep c drugs but don't recall the cost-benefit analyses. These drugs were incredibly effective and many people would benefit from them, so payers saw a huge potential expense and denied care until competitors emerged
In some cases though, pricing is the bigger issue. This often happens with established drugs where manufacturers increase prices, or drugs with limited competition.
Insulin is an example where both pricing and access are not great, i.e. PBMs / insurers and manufacturers are probably equally at fault
Drug pricing and access is a complex and highly competitive negotiation between manufacturers and payers and the media is a powerful weapon used in this negotiation. Lots of lobbying done as well. And there are many behind the scenes players with a stake in the debate (i.e. Hospitals wanting the public to blame drug companies for high healthcare costs). This seems like a balanced article to me, but take articles about healthcare with a healthy dose of skepticism
For Type 1 diabetics in particular, technological support in the form of insulin pumps, continuous glucose metres, and closed-loop systems are only handed out readily to children, while in the US they are far more commonplace since they are covered by insurance. Personally, it took me 3 1/2 years of fighting to get my pump – something that I would have had in months if I would have remained in Japan. One week ago I finally got it and what a difference it makes in terms of control. However, a continuous glucose monitor is nowhere in sight and I frankly do not expect to get one within a decade. Perhaps a pseudo-continuous glucose monitor like the FreeStyle Libre if I am lucky. My diabetes team in London is great and pro technology, but I can only imagine those that are less well-informed on how to make the system (NHS) work or live out in the country. Do they receive the technology they need to manage this disease?
For those of us with Type 1 diabetes that seek technological support, do read up over at Insulin Pumpers UK . Also, never feel ashamed to seek the technology that would help you live longer and less constrained by our illness.
Which isn't to say that running them as businesses is necessarily the right idea, but the regulatory morass that is broader US healthcare probably doesn't teach us everything there is to know about healthcare as a business.
(people get angry when you do things like call a $200 filling "cheap", but it lasts for 15+ years and you get to keep the tooth. It's cheap!)
And yes, $200 is still ridiculously expensive for a filling. Here in The Netherlands I’d pay ~$104 for a multi-sided composite filling (the most complicated filling you can get). For the cheapest (one-sided amalgam) I’d pay ~$25. Local anesthesia would be ~$8.
I'm not trolling. Like clean water, this is maybe an area were society should not tolerate market failure or cronyism.
You essentially have a party who’s getting every company to compete on who is willing to sell at the highest list price who’s driving negotiations against the producers who only stand to gain by higher prices.
The American system is rotten to the core.
One possible reason I can think of is then nobody would develop new essential medications because they know the government will just nationalize it after they spend the billions getting it approved through the FDA.
And everyone + dog would be calling their medication "essential" in order to get the benefits of governmental production.
However, the advances in insulin since then mean it’s a much more burdensome therapy.
Not to say there is no greed here, but our policy has been that if you do the work of making a new drug, you get to charge whatever you want for an extended period of time.
This is the result of the policies we have chosen.
The rest of the story flows from this. The ordinary price mechanism is broken because the patient isn't the customer, and the customer is paramount to any business. As long as most patients don't care what it costs most of the time, it will stay broken.
Say what? With insulin it's "your money or your life".
> The pricing is all the more infuriating when one considers that the discoverers of insulin sold the patent for $1 each to ensure that the medication would be affordable.
> The bigger issue, however, is that companies tweak their formulations so they can get new patents, instead of working to create cheaper generic versions.
No need to make bazillions.
Crowd fund it.
Both would be just fine with me.
Know how pharmacies work and you can get it for about the same price elsewhere:
A better response is that several older, more difficult to manage versions are available over the counter.
Weight trainers can and probably already do (ab)use insulin to maximize their gains by manipulating blood sugar levels during workouts.
self-diagnosed and self-medicated diabetics showing up at hospitals that have no indication of this and pump them full of glucose.
Are you saying that insulin has to be prescribed to prevent murder?
Second because the peculiarities of insurance often mean prescription drugs are cheaper to the patient than OTC drugs. Making insulin OTC might well make it more expensive.
So, sure, non-generic insulin is probably more expensive than it should be. But there was serious research and development done to make these better insulins, and thankfully someone did because they can make life just that easier to manage for a type-1 diabetic.
> In 2000, the first long-acting synthetic insulin was approved by the U.S. Food and Drug Administration.
Looks like it will still be at least another year before a viable generic enters the market.
More competion may be coming (or maybe not): https://www.fiercepharma.com/pharma/mylan-pressing-forward-l...
Wait don't the patents eventually expire on the old formulations?
And it works. Not to be a big insurance company shill but they're often the last line of defense against your doctor trying to prescribe an identical, brand name product for the equivalent generic.
1. Pharmaceuticals have natural monopolies on these drugs (due to regulation, market power, etc.).
2. The public and end consumers are largely unaware when these monopolies are exercising their power to increase costs. This is because there is no one price, you don't actually pay the actual price (if you're on insurance), and it's difficult to actually realize what the price of a drug is.
3. Many insurance companies don't have strong incentives to combat price increases.  As these prices increase, consumers become more and more reliant on insurance.  Insurance companies have targets for what percent of their expenses they are allowed to devote to administrative costs (buildings, salaries. etc). As the cost of drugs rises, they can increase salaries etc. while keeping the percent devoted to administrative costs constant.  Insurance companies are also largely monopolies. End consumers usually take whatever their employer gives them and in most states there are only a few providers. As such, they don't have much pressure to have more competitive plans.
4. Pharmaceuticals companies respond to demands to increase shareholder value by increasing drug prices. This is exactly what we'd expect them to do as per their incentives.
The solution to me is the following:
1. Allow the safe import of drugs from overseas to create a more competitive market (the US has strong regulations against importing drugs mainly due to safety concerns). See this(https://www.pbs.org/newshour/health/u-s-make-easier-import-p...).
2. Regulate pharmaceuticals and insurance companies as the monopolies they are, or dramatically lower the barriers to entry in the space.
3. Reduce the power of pharmaceutical companies to lobby and reinforce the regulations that help them preserve their monopolies. They have every incentive to lobby for protection and it's no surprise that healthcare industry has by far the biggest lobbying spend in the US - nearly double that of Oil & Gas (https://www.opensecrets.org/lobby/top.php?indexType=i&showYe...).
The book American Sickness(https://www.amazon.com/dp/B01IOHQ9LO/ref=dp-kindle-redirect?...) discusses just how far we are from any type of perfect competition in this industry and the resulting effects on consumers. I really enjoyed it and it's a great book if you're interested in the space.
I've been mostly off of insulin for well over a year, though I do keep a vial in the fridge for emergencies, I tend to have a spike once in a while.
Personally, I think it's about time for medical patents to all but be disbanded. The terms are too long, revision patents should not be allowed, and there should be dual-sourcing requirements for FDA approval. If there aren't two mfg's (cannon have a shared parent owner), you cannot sell the thing.
It isn't that they are resistant, it is they don't produce any at all.
It is insulin or death for them.
> ... can help most people get off of insulin