We only spent about 20 minutes walking around (probably spent more time in the border office), but it was a super memorable pit stop for me.
The reason is insurance. When individuals are paying for drugs, drug companies can only charge what individuals can afford. When insurance is paying for drugs, drug companies charge what insurance companies can afford, and insurance companies are able to pay much higher prices (and they recover their costs by raising premiums.) You can't blame pharmaceutical companies for not leaving money on the table.
The fact that Medicare is legally not allowed to negotiate drug prices (a big handout by Bush administration to Big Pharma) isn't helping either.
What's stopping US insurers from pressuring drug companies into price agreements? Shouldn't that be also in their best interest, instead of just passing the costs along to the patients? If that's all they are doing, what do you actually need them for?
In Germany, price agreements between drug manufacturers and insurers happen plenty of times, and it usually works out because drug companies take reduced profits over no profits, any time of the day. Patients still have the option to buy the "fancy version", paying out of their own pocket, but the vast majority of patients are completely fine with whatever their insurance covers.
Insurers routinely exclude drugs that they think are overpriced, they also switch to generics the day a drug goes off patent, sometimes forcibly.
But aren't those cost actually being passed onto the employer via the employees health care plan?
Here is Australia, where we have universal help care, we have a system call PBS and it's role is to define the drugs that get subsidized under that universal help scheme.
To keep those cost down it tries to pick generic versions of these drugs.
When Australia join a free trade agreement with the USA a side affect of joining that agreement was a weakening of the PBS.
We now have a situation where drug companies are able to manipulate the PBS for their gain, coming at the expense of the tax payer:
"Capturing the Benefits of Competition for Patients"
Speech by Scott Gottlieb, MD
Commissioner of Food and Drugs
March 7, 2018
Insurance companies are consumers’ only venue for price negotiation.
Sick people in urgent need of a drug will likely not shop around, they will pay the asking price, sign up for any financing plan offered if the sticker price seems too high, or just charge it to the credit card.
That's entirely untrue.
Medicare pays for drugs either through Part B or Part D. In Part B, Medicare takes a discount by fiat, they get the same discount as commercial insurers.
For Part D, Medicare push the drug purchasing to private companies who can negotiate, lowering the cost of premiums.
Saying "Medicare can't negotiate" is technically true if you twist the meaning of the words, I guess?
"Oh hey, can you charge this other guy less money for me?"
They are in Part B, by your own description, but instead of negotiatinh they just get the deal that commercial insurers (who each have less leverage than Medicare would) get.
And in Part D they are subsidizing the actual payors, and it wouldn't be entirely unheard of for a participant in that role to negotiate costs for services purchased by the subsidized payors, each of which had less negotiating power than the central subsidizer.
For Part D, I see your point, but research has found that the Medicare price that insurers negotiate for drugs is often less than what commercial plans pay, so they are doing a good job on behalf of Medicare.
One thing to keep in mind can you really call it a "negotiation" when one of the parties represents a sovereign entity? CMS (Centers for Medicare and Medicaid) gets even more discounts above what I described earlier. For example, the 340B discount knocks 23.1%+ right off the top. Same thing for Medicaid. There is no negotiation here, the gov't simply says, "we get this discount or we ban you from participating in public programs".
Yes, sovereign entities negotiate all the time; being a monopsony is probably more relevant than being sovereign, but arguably only a monopsony can negotiate on fair terms with a monopoly supplier.
Humalog without insurance costs $95 per 3 ml cartridge, let's say it's a $100. This would mean that this child needs 37 cartridges for 3 months, or 12 cartridges per month, 3 per week.
That's a pretty crazy amount of insulin. I'm a T1 diabetic, that doesn't eat particularly healthy, and I need 2-3 cartridges a month, almost an order of magnitude less than the person in the article.
I don't think those numbers are right.
I don't doubt the numbers, but I do detect some omission/simplification to make it seem extra stark.
Fiasp is an example of one of the most modern ones and still I can't find a price higher than $125 per 3ml: https://www.goodrx.com/fiasp?dosage=3ml-of-100-units-ml&form...
You have a citation that it’s available from every provider in the country at that price? The person quoted specifically said they’d been quoted that much and I would assume that people aren’t making up reasons to go on 5 hour drives.
Of course, there might be a more expensive provider that I don't know of.
I don't think that those people are making up reasons to go on 5 hour drives, but I do think it's quite likely that journalists fudged the numbers or just found some theoretical maximums and approximated the price from there. Just so it's a juicier story, of course.
*edit, as I am on an insulin pump I only take fast-acting insulins. Lantus/Levemir other longer acting insulins usually are more expensive than the fast-acting stuff.
- 50 units of Lantus per day -> 4.5 vials per 3 months @ 300/vial = 1,350 USD/month
- 80 units of Apidra per day -> 7.2 vials per 3 months @ 300/vial = 2,160 USD/month
total = 3,510 USD/month
Now, to be fair, I'm older and have more insulin resistance than a younger diabetic would. Either way, the numbers without insurance add up real quick.
The Red Cross only takes cash, but it's so much cheaper (actually affordable).
However, even considering the patents, insulin prices for the same product are much higher in the USA than in Mexico or Canada. American prices have increased by an order of magnitude. 
IMO this rampant price gouging can only be explained by the pharmaceutical lobby, and a political apparatus addicted to their money.
Edit: just to be clear, the price of Humalog, a patented analog, has increased in price by 700% in the last 20 years. This is not simply a case of newer treatments being more expensive.
This is of course an extremely simplistic way of looking at it but the reality is that we allow companies to abuse the patent system (under the guise of making research profitable for profiteering medical research) making generics impossible for things such as Insulin.
The real solution here is that FDA needs to close the loopholes on the patents that help them renew patents indefinitely. Secondly, drug import must be simplified from countries like Canada, China and Mexico for personal consumption.
Third, people should opt for cheaper alternatives which might be slightly less effective than cutting edge.
>Can't really blame them if they want to make huge profit by offering you something you really want
This isn't a company offering you something you really want. This is a company gouging the prices on something you literally need to live.
So allow me to call you out on that shitty argument, first of all.
And second, many people don't have the option to opt for cheaper alternatives. They have one choice, which often leads to people having to ration their insulin and die from it . So I would highly recommend you actually do some reading up on the situation before you make claims about alternatives.
That is completely irrelevant in my opinion. The question is would you have have $300 insulin or none ? That is the choice consumer has unless of course someone (like government) can use coercive force against the company. In that case less companies would be willing to even enter the market.
Yes, expensive health treatment leads to death. There is nothing surprising about it. It is the way of life. But to avoid that death you can not steal from others or force others to work against their will.
In this case, the end result is going to be either the government stepping in (since the role of the government is to ideally care for its citizens) and forcing prices down, or the people suffering will eventually enact violent action against said corporations.
People suffering would eventually be violent towards the corporations then they would destroy what little chance they even had to survive. Most societies like Venezuella, India have tried that model and are curently at the bottom of the pile.
Again, you're advocating for the death of people that can't afford insulin. Why do you believe people deserve to die if they can't afford it?
Eli Lilly had a revenue of $22B with a net income of just $204M last year. So roughly they have made $1 profit for every $100 of revenue. Does not look like "endless greed for profit" to me here. In fact I will not buy their stocks.
It's a sick system.
The formulations are constantly tweaked by manufacturers to evergreen the patents too. New patents allow the price to be pushed up without risking new competition arriving.
Is it really cheaper, or necessary to fly to Mexico to pick it up yourself?
Literally fly over, crash on my couch and spend a week exploring a different country for zero additional cost.
Nah, that'd never happen.
1. does not cover everyone
2. it is rationed by for-profit companies
3. is is expensive and can bankrupt you
4. tied to employment which means you can lose it easily
5. confusing since you often have to deal with paperwork and multiple providers
If you are rich and can afford it the american system is great but it is awful for everyone else.
But hey, got to have those profits...
> At the same time, the federal controls on wages was leading to significant angst and frustration among the labor market, and the threat of widespread strikes and other forms of labor protest became a serious threat to the economy and war effort. In response, the War Labor Board implemented a new income tax exemption to employers sponsoring employee health plans. This made employer contributions deductible on federal returns, while the benefits were entirely tax-free, to the employees .
> What started as a measure to avert crisis and labor strikes ended up becoming an expectation. As more and more employers leveraged these tax-benefitted health plans, American workers grew accustomed to getting their health insurance through work, rather than as individuals. The end of the war and the return home of American GIs exposed more workers to the new system, reinforcing its popularity and utilization . By the 1960s, employer-sponsored health insurance plans had overwhelmingly displaced the formal individual market, a status that has persisted right into the start of the 21st century and provided a central tenant of the Affordable Care Act of 2008 .
In my opinion, this is yet another example of how even the most well-intentioned legislation can have disastrous consequences if it fails to account for incentives and second-order effects.
People were getting their insurance through their unions. Before the unions started doing this, nobody associated health insurance with employment. This made people grateful and happy with their unions. The government, in order to weaken the unions, paid employers to give their employees insurance with a tax break.
Not understanding this makes the first sentence completely unconnected to the rest of the text. Health insurance was not a raise, heath insurance was an intentionally union-breaking subsidy to businesses to give bosses more leverage on wages.
i.e. this was not well-intentioned.
Do you have a source for this? Nothing I've read has made such a claim. Even the NYT says that the root cause of employer-based health care was wage freezes during WWII followed by the tax-exemption of employer-provided health insurance.
I know plenty of incredibly wealthy people who fly to places like France and Israel to see specialists, so take from that what you will.
Sure, in exchange, you don't have to plan your annual visit to the optometrist 3 months in advance, but I'd rather have a doctor that actually cares instead of useless shiny tech.
I would agree that the quality of care in the US has a much bigger spread than Canada. However, as a middle class person in both countries, there are benefits that you get in the US, you don't get in Canada.
Actually, US health insurance plans generally don't cover optometry. That's a separate "vision" plan that you generally only get through an employer if you are lucky. If you don't have it such a plan, you pay out of pocket.
Lower operating costs = lower price.
Before relatively recently, most US medication consumers didn't understand that rising drug prices were a factor in the rise of their health insurance premiums. Now they are catching on to that, which is why it is becoming a politically important issue.
A government can negotiate lower prices than a commercial entity. They also can legislate to force bad actors to be reasonable.
Sadly the UK’s NHS is being slowly converted to the USAs fundamentally broken system of “what the market can bear”.
Rampant capitalism didn’t work for the banks either. They needed a social bailout when their markets crashed.
It is indeed infuriating.
The US is a huge outlier: we spend way more than other countries and don't even live as long.
There are other ways to measure it too, which is good to investigate, as it is a complicated subject.
Here's a HN relevant way to measure it: how much time does your average 5, 50, and 500 person company spend dealing with health insurance stuff?
The startup I worked for in Italy spent 0 time on it, because it's not relevant to the company at all. Of course, Italy has massive amounts of bureaucracy for other things, which more than make up for the lack of it in health care, but that's another story.
(Edit: small typo)
Then we have, Most of this marketing money is directed at the physicians who do the prescribing, rather than consumers. As Oliver pointed out, drug companies spent more than $3 billion a year marketing to consumers in the U.S. in 2012, but an estimated $24 billion marketing directly to health care professionals.
$27B in marketing but the graphic shows over $65B in R&D?
that's huge. but -- how can US consumers possibly save any money by going to another country to buy a product? i thought globalization had brought US consumers free trade.