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Treat Medicines Like Netflix Treats Shows (nytimes.com)
123 points by katiey 15 days ago | hide | past | web | favorite | 129 comments



This is insurance. Literally insurance.

You pay a monthly fee in return for a good, service or cash payment should something happen.

however in the USA, something odd has happened. For what ever reason, be it legal, cultural or other, copay, crippling buerocracy and down right greed has stopped the health system working properly.

The problem with a "netflix" model, is that doctors can currently prescribe anything, regardless of cost or efficacy. There are legions of people around the USA bribing doctors to prescribe expensive generics. Until that practise is stopped the US system is sunk.

For insurance to work, US doctors must follow national guidelines laid out by a scientific body (ie NICE in the UK) any deviation without justification would/should lead to fines and censure. They would set out a list of drugs that work for certain conditions, anything else is either poor value for money, or the wrong drug.

The very fact that medicare is legally barred from negotiating volume discount tells you that some deeply wrong has happened.


>The problem with a "netflix" model, is that doctors can currently prescribe anything, regardless of cost or efficacy

Unknown to almost everyone in the US is that if you are a Medicare patient, when you go to fill a Rx before the pharmacist fills the therapy, insurance software suggests cheaper generics to the pharmacist and requires the pharmacist to do the leg work of asking the doctor to change the Rx based on what the insurance company wants (ie the cheaper medication).

So the question might be..why would a pharmacist do what the insurance company software tells them... or why would a doctor second guess their initial Rx at the request of an insurance company trying to minimize their costs? Because if the pharmacist/pharmacy doesn’t do what insurance says or if the doctor doesn’t do what insurance says, they get dropped from the insurance network.


> insurance software suggests cheaper generics to the pharmacist

I have never heard of pharmacists using "insurance software". The pharmacy system requests coverage from the patient's insurance, and it is either accepted or rejected.

Additionally, if there is a generic they just fill it, assuming the patient consents. In fact, pharmacists in many states are required to point out generic alternatives if they exist.

> requires the pharmacist to do the leg work of asking the doctor to change the Rx based on what the insurance company wants (ie the cheaper medication)

If a prescription requires modification, the patient is required to go back to their doctor. Pharmacists cannot just ask doctors for prescription modifications.

Where are you getting these ideas from?


>If a prescription requires modification, the patient is required to go back to their doctor. Pharmacists cannot just ask doctors for prescription modifications.

>Where are you getting these ideas from?

This is not strictly true, at least in the US. I have had to wait while pharmacists contact the doctor to modify a prescription to sub something in due to availability issues.

The mail order service through my insurer will also do this to have doctors to order a 90 day supply rather than the usual shorter supply.


You're right, my statement was too absolute. What I meant to convey is that pharmacists cannot just ask for modifications without the knowledge and consent of the patient.


NexGen will suggest generics when you have a script for a name brand. It’s not coming from the insurance company.

Source: worked for RiteAid for half a decade.


Some states allow pharmacists to substitute generic drugs for name brand prescriptions. To my knowledge they don't need the doctor's permission, and can make the change on their own unless the doctor specifically requests the name brand medicine for some reason.


Yes, those are "Dispense as Written" (DAW) Laws.

http://beta.aan.com/globals/axon/assets/4698.pdf

In most states, just using the trademark name instead of the generic is not sufficient (which makes sense, since the generic names are usually quite wordy and hard to remember) the doctor needs to specifically write "DAW" if a generic cannot be used.


This begs the question, under what circumstance would it be reasonable for a doctor to insist on "Dispense as Written"?


Generics are not guaranteed to be identical, especially in the inactive ingredients. It is rare but not unheard of for someone to have a reaction only to one form of a drug.

Edit: I have a friend who has such an allergy, which was confirmed with double blind testing.


From the Center for Medicare and Medicaid Services. But like I said nearly no one knows any of this.

Go into any pharmacy and ask the pharmacist about “MTM” and gauge their reaction.

Look at outcomesMTM they are 1 of the 2 dominate insurance software vendors. Again you can ask nearly any pharmacist and they have an outcomesMTM portal that feeds them automated recommendations on behalf of the insurance carrier. Some of the bigger pharmacies, like Wal-Mart, have even removed the MTM portals from the individual stores already and created nationwide MTM centers. I even know of one company who uses pharmacy students (for free) to do this work for the insurers. Here is another tidbit for every recommendation the portal gives the pharmacist the pharmacy gets a “tip” (ie monetary bonus) to forward that to the doctor and if the doctor makes the change the pharmacy gets another tip. The only reason the insurers link up with the pharmacists to do their dirty work instead of the doctors directly is the insurers can’t pay the doctors the way they pay pharmacists to do their work bc of anti kickback laws.

>Pharmacists cannot just ask doctors for prescription modifications.

Again try asking any practicing family physician, ask them how many faxes they get a day from pharmacies requesting they change the patient Rx.


> From the Center for Medicare and Medicaid Services.

Please direct me to citations, not "try asking any X".

> Go into any pharmacy and ask the pharmacist about “MTM” and gauge their reaction.

MTM has nothing to do with insurance.

> Look at outcomesMTM they are 1 of the 2 dominate insurance software vendors.

outcomesMTM is not insurance software, it's pharmacy patient management software.

> Here is another tidbit for every recommendation the portal gives the pharmacist they pharmacy gets a “tip” (ie monetary bonus) to forward that to the doctor and if the doctor makes the change the pharmacy gets another tip.

That you need to substantiate with more than just "go talk to pharmacists", particularly in light of the above.

> Again try asking any practicing family physician, ask them how many faxes they get a day from pharmacies requesting they change the patient Rx.

I've had my pharmacy request changes on my behalf, if it was something simple (like getting the wrong dosage), and they have done so as a convenience, not because they were required to. I have never had them request a change without my consent or knowledge, and I would stop using such a pharmacy if it ever happened.

You have also completely ignored what I said about prescription changes not being necessary for generic substitution.


You are asking me to cite things but what are you citing? You are simply saying “that’s not true”.

>MTM has nothing to do with insurance.

It’s required by law To be provided by insurers/health plans. If you refuse to talk to pharmacists or doctors about it, fine, you can read the law 42 CFR 423.153. In short insurance companies, must provide MTM services to patient covered in their plans.

It is also the single biggest metric in determining an insurers star rating. How could it possibly be unrelated to insurance if insurance companies have to, by law, provide it and it effects their reimbursement/star ratings?

>outcomesMTM is not insurance software, it's pharmacy patient management software.

That’s funny...the software certainly does manage pharmacists...on behalf of the insurance companies.

Right from the outcomes homepage:

“Contracted with more than 50 U.S. health plans, OutcomesMTM provides MTM coverage to 5.5 million patients. The company links more than 100,000 local chain, independent and health-system pharmacy providers with contracted plans across the country.”

Why does outcomesmtm contract with 50 insurance companies? Why does outcomesMTM “link” pharmacies with contracted plans?

“Targeted MTM services are designed to help plan sponsors improve performance for key Star measures, including the triple-weighted adherence measures. Prompted by TIPs in the Connect™ Platform, pharmacists work with patients to impact adherence and optimize medication regimens.”

As to generic substitutions...there are laws from state to state that allow pharmacists to do it, UNLESS the doctor says the name brand must be dispensed. I’m afraid that’s common practice, so permission is required. Plus when it comes to Medicare patients a pharmacist isn’t going to just change the RX to generic because they know they: 1 get paid by the insurer through these MTM portals to make the recommendation and 2 get paid again through the portal if/when the doctor agrees to the change.


> You are asking me to cite things but what are you citing?

GP cannot prove a negative. If this software/system exists, the "burden of proof" is on you.


He said mtm has nothing to do with insurers and ask “where I got my ideas” I said CMS and cited the Law that Medicare insurers have to provide mtm to patients.

Then he said outcomesMTM is a pharmacy patient management software having nothing to with insurance, but it’s a software for insurers to pay pharmacies to provide mtm to the insurers patients and I quoted from their website. It’s really above and beyond ridiculous like me saying google is a search engine and someone say no it’s not give me a cite.


While I agree insurance companies do harm, encouraging generics is probably a net benefit. Doctors, just like anyone else, respond to marketing, so they remember 'viagra' more easily than 'sildenafil' and write prescriptions accordingly. There's often no medical reason a generic isn't 100% suitable.


This surprised me a bit but generics are not always a de-branded version of a medication or the same formulation manufactured by a different company. Often times generic equivalents are different formulations (sometimes prior generation formulas and sometimes divergent formulas) that are considered to have the same effect.

They nearly always do, but the weirdness of our stupid patent system means that sometimes they can have weird allergenic effects or (especially with neurological medicines that are less well understood) differing efficacy.


And drug companies will stir this FUD so hard your head will spin.


The inactive ingredients are different.


That's great, but in this case even the generic costs $450 to $950 for a typical two week to a month bottle. I can't imagine how much the brand name costs if the generic costs that much. There are some alternatives like blink health (I have no affiliation) that bring that cost down to about $45 by negotiating prices en masse, I assume. If that's not a broken system, I don't know what is. Clearly, these medicines could cost a lot less but they don't because companies' profits are more important than health in America. Or take genetic tamiflu (can't remember the name). $150 for one course. I'd rather risk the flu, which I recently have, than take it preventatively. Can't imagine how much that brand name costs either but it it's unaffordable even on an engineer's salary, what's the use of even having this drug? Even with my insurance it was over $110. What's the use of having insurance in that case? Still unaffordable. Still going to get sick. What a fucked up system.


The insurance companies are not recommending generics because it’s cheaper for the patient...they do it because it’s cheaper for them.

There are many reasons generics, especially in the case of Medicare patients with chronic conditions, are worse for a patient.

Generally if you have a Medicare patientwith chronic conditions such as diabeties and/or high blood pressure, and their physician has successfully been managing their conditions using a name brand therapy, it’s not good practice to switch their therapy to a generic because it helps the insurance company. More importantly, it’s only the active ingredients in name brand drugs and generics that are the same. coloring agents, binders, etc... are different and those can have significant negative side effects. There is no shortage of examples of generics having worse outcomes in the case of chronic conditions.

Also it’s not just the therapy the insurance is changing, they also change the quantity. So again say you are a Medicare patient with type 2 diabetes and your doc prescribed 30 day Rx so you come back for the doc to check your blood work between fills, insurance is demanding the doctor change the Rx from 30 days to 90 days, because they don’t want to pay for the additional doctor appointment/blood work. They are watering down care and interfering with doctor/patient treatments.


Do you think cost should ever be a factor in patient care? Looking it up, generics usually cost 80-85% less than brand drugs. They are tested and contain the exact same active ingredients. Is it worth the patient and/or the insurance company paying 5-7x more to keep the coloring agents etc the same? I understand that sometimes it may make a difference, probably especially for things with complicated delivery mechanisms like time-release drugs, but in those specific cases the doctor can explicitly request brand if it's important.

Usually the patient copays are substantially higher for brand drugs than generic ones. And the insurance company paying obviously isn't free money either, it's from premiums that people pay every month (and/or taxes). At least in the US, people often don't get medical care because of the expense, so anything that inflates the cost further can be expected to cause real negative health outcomes by pricing more people out.

I agree it would be better to not change even minor things if a drug is working. But I think that problem would be better solved by (as a condition of drug approval) requiring companies to disclose coloring agents, binders etc to generics makers once the patent expires, so they can make the exact same drug that was used in the initial clinical studies, rather than overpaying for drugs by 5-7x.


>Do you think cost should ever be a factor in patient care?

Should the insurers costs be a factor in patient care? No.

Should pharmacists be paid by insurers to contra to cold call patients and interfere with the doctor patient relationship? No.

Should the pharmacists be financially incentivized to get patients to consent changes to therapies on the basis those changes lower insurers costs? No.

Should pharmacists be forced to do the bidding of the insurers under threat of being dropped from the insurance network? No.

Should doctors be forced to accept the insurers recommendations for changes to patient therapies under threat of being dropped from the insurers network? No.

It’s great to lower patient costs...and that’s what insurers and pharmacists on hanging their hat on, as I said almost no one knows the reality of how and why it’s being done. It’s no secret insurance companies are dropping pharmacies and doctors who don’t play ball (it’s worse for a patient to lose their network of doctors than pay for name brand drugs if the doctor feels that’s in their best interest). It’s also no secret that insurance companies are consolidating the market (buying pharmacies, buys hospitals and buying doctor offices) and forcing thei patients to the insurance owned doctors/pharmacies.

It can’t be ignored that patients are now often seeing a doctor owned by the insurer, filling their drugs at an insurance owned pharmacy...and decisions about patient care are made by the insurance company to lower their cost, not patient costs.


>>Should the insurers costs be a factor in patient care? No.

This is a very odd view to take. I live in a single-payer system (Canada), although we don't have a similar system for prescriptions (yet). I have supplementary medical insurance through my work. Of course I want my insurer to keep costs low; that means more money to pay for important things, and lower costs for my employer (and by extension, me).

I take two regular prescriptions, and I happily accept generics, because they're cheaper and they work. If they didn't, and the name-brand would for some reason, then yes, I'd expect my insurer to pay for that. But to default to the lower-cost one is not a bad thing for patient care.

If you think the insurance companies are taking too much money from this relationship (I do) or if the whole idea of barely restrained medical capitalism is immoral (I do) or if insurance companies should have much less control over medical decisions (I do), I can understand that, but especially in the current system this is one of the few good ways to keep costs slightly lower.


In Australia pharmacists can automatically switch to the generics unless a doctor says they can't on the prescription. I am totally okay with that for almost all scripts I write because it's the same drug and it saves the patient money.


well you may not mind if a pharmacist changes your Rx from name brand to generic to save the patient a little money.

But this is more of the pharmacist interfering with your relationship with the patient...

So imagine you write a therapy, and the patient gets a call from the pharmacists to the extent:

1. Your Doc Wrote the expensive drug, but if you agree we can save you $x by contacting your doc and encouraging them to change it;

2. Your Doc only wrote a 30 day fill, do you want us to ask for 90 days? (Consider these are your sickest patients, only your patients with chronic diseases, so you probably give them 30 days on purpose to get them back into the office to check their blood).

It may sound reasonable on its face but: 1. Your patient loses faith you are acting in their best interest; 2. It’s framed in a way that the pharmacist knows more than you; 3. It’s not disclosed to the patient or to you as the doc, that the pharmacy getting paid bonuses by the insurance company to do it; and 4. If you disagree with the request for change (it doesn’t matter why, it will harm your rating with the insurer and you will potentially be dropped from the insurance network and lose your patients with that plan/insurer).


I wasn't at all saying the way it's done in USA is good. I was suggesting that making it allowed unless explicitly disallowed might be a better way to go.


There isn't always an objective best treatment for a patient. Doctors should have license to use their knowledge of the patient and accumulated wisdom to prescribe what they think would be most helpful.

We have a list of drugs that work, it's the list of FDA-approved drugs.

Insurance will already try to get out of paying for anything that doesn't seem "normal."


> We have a list of drugs that work, it's the list of FDA-approved drugs.

Which doesn't take price into account.

And there's no reason for the patient or doctor to take price into account when insurance is paying for 95%+ of the cost.

This is the classic "someone else's money" problem.


>For insurance to work, US doctors must follow national guidelines laid out by a scientific body (ie NICE in the UK) any deviation without justification would/should lead to fines and censure.

I don't think that's necessary for insurance to work - I think it's necessary for medicine to get cheaper. If I want a specialist to treat me as an individual and potentially prescribe something outside the norm, I should be able to pay a premium for that, and the doctor should be allowed to do it if it is going to work without threat of fines or censure because they didn't choose the cheaper option.


This sounds like private healthcare in the UK. Many treatments and drugs that haven't been approved yet or deemed cost effective for the NHS are available from private providers and can be paid for out-of-pocket or by insurance - relatively cheap insurance because it has to compete with free (at point of use, lets not get into that debate).


> US doctors must follow national guidelines laid out by a scientific body

No thanks. My daughter is alive today thanks to a therapy that would not be sanctioned by 'standards bodies'. I'm good.

Thank goodness her doctor was a professional that was able to make professional judgements. If you want to reduce doctoring to looking up values in a dictionary, I suggest you try that with you and yours first, before forcing it on everyone else.


My wife is a paediatrician in the NHS, Those very guidelines are _always_ evolving.

During training in the NHS a doctor is expected to do/participate/author at least one study during their time in training. Thats at least 8k studies a year from junior doctors alone.

Of course I want doctors to make professional judgements. But, I also want gross mistake to be prevented. For example dumping a 7 year old with textbook _textbook_ autism on lithium, because they had "rapid cycling manic depression" (why is that bad? a) because MD is vanishingly rare in pre pubescent, and unheard of in 7 year olds outside the USA, the risks of suicide when coming off lithium is 1/3)

in adult land when someone has Tonsillitis, prescribing them an expensive co-amoxiclav generic ($50 a _pill_) when the brand the cheapest generic was $20 for the entire course. (as it was a primary infection and showed no resistance, amoxicillin should have really been used.)


Do you mind sharing some details, without naming names? I'm curious to know more about the specific issue.


Sure. My wife had lost several pregnancies, including late losses. All sudden. There was no explanation ... tests all normal. Went to several MFMs at UCSF, Stanford, Mayo Clinic, etc, who told us that there was no evidence backed treatment to offer. Her obstetrician (been in practice almost 50 years) told my wife that she had a blood clotting disorder (although the tests certainly did not indicate that, at all). She was rather confident in this given the way we lost babies (hearts stopped overnight), but again, this was not evidence backed, because of a lack of diagnostic tests showing a clotting disorder. However, her OB came from a time when medicine meant looking at symptoms, not just tests. Her OB told her that since the time she was in practice many of her patients who lost babies this way ended up being diagnosed with clotting disorders many decades after the fact, because we are always discovering new thrombophilia risks, but that either way, they were successful in just using anti-clotting agents.

The treatment for clots during pregnancy is a daily injection called enoxaparin, which is rather expensive ($400/wk for 40 weeks), so insurance certainly does not want to pay.

Well, long story short, after seven pregnancy losses, she did the injections, and had a pretty textbook pregnancy. Of course, after we had the baby, all the 'evidence-based' doctors changed their tune and now insist that enoxaparin is a necessity if she wants to get pregnant again. Not just for the baby either, but for her health (since blood clots can lead to pretty sudden death for mothers).

So, yeah, basically her OBs advice, which was based entirely on intuition and five decades of actual clinical practice, saved both the lives of my daughter and in some ways my wife (again, she may have been at risk of clots during previous pregnancies).

Ultimately, medicine is not just about knowing what's in a book. These days, most medical knowledge is available for free online. When we went to UCSF, Stanford, and the Mayo Clinic, the 'care' we received included having the various conditions that can harm second-trimester fetuses listed for us and then we were explained why my wife did not have them. Of course, all these conditions we already knew about because of reading comprehension. I would not classify the information we got there as 'professional', because it was really a simple matter of looking up data in an index. On the other hand, her OBs care was actual professional care. We pay our doctors to give their opinion on our care based not just on what the books say but also based on what they have learned. An insistence on 'evidence-based' care reduces the ability for doctors to actually treat patients, and will -- inevitably, even if it takes some decades -- lead to a lack of evidence as new generations of doctors become less trusting of their intuition and more reliant on external validation.

EDIT: to be clear, it's not just a lack of evidence this treatment works. Several large-scale studies have been done in the United States and Europe (esp Britain) to see whether this therapy works at all. In Britain, where the NHS was considering this as a treatment for recurrent loss in the absence of diagnosis, the studies showed that the treatment was not effective, hence the NHS wouldn't cover it. Her OB knew of these studies and insisted they work, and also pointed out that studies done in other countries (like countries in the Middle East and Southeast Asia, where the demographics more closely fit those of my wife) did show an improvement. However, those studies weren't taken into account to help British mothers by their own national system. Thus, if my wife were British (or even in her parent's country of Canada), her treatment would not have been covered, but, because American insurance mostly pays for what the doctor prescribes, ours was paid for.


My wife is a paediatrician in the NHS, and before that did several rotations in OB.

I'm sorry you had a terrible time, but it is standard practise to prescribe Enoxaparin for recurrent miscarriage in the NHS: http://formulary.panmerseyapc.nhs.uk/chaptersSubDetails.asp?... Sure you can test for it, but in the absence of anything else, its a cheap, and not overly invasive. So its fair game for prescription. (My wife has had it twice.)

its also fairly cheap to the NHS (40mg preventative dose is £30(~$40) for ten doses https://bnf.nice.org.uk/medicinal-forms/enoxaparin-sodium.ht... so about £840(~$1100) for a 40 week course)

However a GP shouldn't really prescribe it, without the patient seeing a specialist first. In the NHS at least it would be the gynae department that would prescribe it. More importantly the NHS pays for what ever the doctor prescribes regardless of what it is. There is no concept of "here is the drug you should have, but you have to pay for it out of pocket"[1] the NHS is incharge of getting a good price.

[1] There are very rare cases like specialist proton therapy in certain cases, or new cancer therapy drugs. they account for less than 0.1% of all cases, unlike the states where ~20% of the populous can't afford basic drugs, like routine pain meds, or antibiotics. Also, there is no concept of cutting people off if they have spent to much. So chronic conditions are treated regardless.


I am very sympathetic to your ordeal. But I would also like you to consider a few counter points.

Consider this very hypothetical scenario. For a particular diagnosis, an experimental treatment improved outcomes compared to a control group by 40%. That may seem promising, but if the control group success rate is 10/100 and the treatment group success rate is 14/100, that means the NHS would need to treat 100 people to get 4 additional positive outcomes. If the treatment is really expensive or if it has severe side effects, then quite frankly, cost benefit needs to be considered. And another thing to consider, is its possible that your treatment was a false positive. It might seem crazy to you based on your experience, but the population is very large, and there will always be those 'exceptional' cases. That is just how it works.

Also, the OP qualified his remark with the words 'deviation without justification'. It sounds like in your case the OB had plenty of justification because she was aware of studies with more comparable demographics that had better success. So really, it sounds like you just got lucky in that one of your specialists happened to have the right background. If you had had a different OB, then you would have been no better off in the US system.

And finally, a personal anecdote. I suffered a fairly nasty shoulder injury playing a contact sport. The injury (completely tore my AC joint) is quite common for the sport. My HMO (Kaiser) did not recommend surgery because it only has moderate success, and even if successful, it only marginally improves quality of life compared to no treatment. Somewhat coincidentally, 3 other teammates had the exact same injury that year. One was on Kaiser, and also did not get the surgery. The other two were on PPOs and both got the surgery (I largely suspect due to the financial incentives of PPOs, they tend to over-treat). In terms of recovery, I was mostly back to full function in about 6 weeks, whereas the surgery involved a 3-6 month recovery process. And after 4+ years, I have some minor stiffness every now and then but nothing too bothersome. So basically, every time you (or your company) pay your sky high insurance premiums, just realize that some portion of that money is going to pay for mostly unnecessary shoulder surgeries for recreational athletes.


> The problem with a "netflix" model, is that doctors can currently prescribe anything, regardless of cost or efficacy.

We should just have single payer that covers A) drugs not under patent B) drugs with breakthrough designation.

If people want other drugs that are patented they should then just have to get supplemental private insurance.


I think this is a good idea. Quite a bit of drugs we take are already generic. I'm a dialysis patient and 10 out of the 12 drugs I take daily are generic. The remaining 2 will become generic within a year. I think having access ti cheap generics will make a huge difference to everyone.


It's not quite insurance. Firstly, this is a relationship between the government/insurance companies and the drug companies. The people (however flawed) already have insurance. For those organizations, drugs aren't risk, and they are paying in bigger lumps, so this is closer to the opposite of insurance. It's constant price gouging mitigation.

There's a slight difference since nexflix entirely covers the marginal cost per item consumed. If we had drug bounties, the drug companies could become entirely R&D outfits, with boring old chemical companies doing the pill manufacturering. Over time, if the existing companies lose their manufacturing ability, they will need more dependent on this arrangement. Finally, it removes the perverse incentive against cures/innoculations and for rest-of-your-life migrations.


> There are legions of people around the USA bribing doctors to prescribe expensive generics.

Expensive... generics?


Censuring healthcare options unfortunately stifles a patients' ability to pursue experimental treatments. This is an essential option for surviving an illness that is poorly understood by the mainstream. Experimental does not mean lack of scientific rigor. On the contrary, experiments are science.

National guidelines will always be behind the most cutting edge treatments, because treatments need to be proved before they become widely accepted. Proving takes time--sometimes decades that a sick person does not have. Someone who is dying from a complex illness need the option to pursue experimental treatments.

National guidelines are important, but need to be voluntary in order for sick people to have every chance to beat their illness.


So many things are wrong with healthcare in the U.S.

Where to start?

Low- or no-deductible insurance makes it difficult for consumers to be price conscious.

Networks and co-pays make it difficult for anyone to ascertain the price of any good or service until after it has been provided and consumed. Doctors don't know list prices or any prices. Insured consumers don't have incentives to ask, let alone shop.

Too little or no price signalling -> disfunctional market -> over-consumption -> inflation.

The Trump administration's push for hospitals to publish prices is a surprisingly good idea, provided no way around it is found by the industry. This needs to be pushed all the way down to clinics -- don't stop at hospitals.

Other things that are wrong include:

  protectionism -- wanna build a hospital?? first you'll
                   have to get a "certificate of need",
                   and that's a very political thing
  
  protectionism -- it's too hard to become a doctor
  
  protectionism -- the FDA helps pharmaceuticals
                   defend their profit margins even
                   when drug patents expire
All of this needs fixing.

A single-payer system would simply fix pricing, but would not be sufficiently dynamic (only markets can be decently efficient at discovering pricing), and it would impose rationing. I would prefer to fix the market's price signaling issues first and then also reduce the protectionism, then a healthy market can emerge and can increase supply to reduce prices (or reduce prices if supply were already high enough).


Your statement sounds pseudocorrect but the underlying assumptions are that: a) we are currently able to diagnose all nosological entities efficiently, b) we know which treatments are working for each of said entities and c) all people react the same to the same medications, d) all medications that are indicated to treat a disorder are equal. Oh boy, wouldn't that be nice...

In reality you have an army of paper pushers that are hired and have their salaries paid to restrict what can be prescribed. For patients that fit well in proper diagnoses and are otherwise typical it is sometimes annoying but for the 1-2% of patient that rules do not apply (for so many reasons that I cannot possibly enumerate here) it is detrimental. The people who are actually doing this job are not happy with it, the doctors are not happy with it. Every step of the prior authorization process is designed to irritate the doctor or provider (like saying all the patients information again when the representative changes or not accepting the case id to pull out the patient information or "sorry Dr. we only accept this application by fax, we don't do this online" or "this patient's plan does not support peer review") and discourage him from doing it. I know patients that were turned away because their doctors didn't want to handle specific prior auths for them.

"But doctor why don't you want to prescribe medication A that is as effective as medication B but it has more side effects?" As your advocate, I feel obliged to recommend the best medication, if your insurance does not want to cover it then they should take the risk and the legal responsibility of their policy not force me to change my recommendation based on price. Of course, I will not start with the bazooka antibiotic for your tonsillitis but there is a medical reason for not doing that (resistance development). Right now, I have to spend extra time to even justify why a patient should stay on a good medication yearly even if it works great for them. The doctor is your medical scientist consultant, he shouldn't be burdened with saving money from the system, he will tell you what is best, if you want them to give you a value-for-money determination they can do that as well. If two medications work exactly the same, I would happily give the older and cheaper one - it has been longer in the market so it has been more extensively tested.


in reply to point a), b), c) and d):

it already exists: https://bnf.nice.org.uk/ There is a companion to the BNF that has the prices of all the brand/generic versions of the drug.

Doctors don't just randomly prescribe anything, they already _have_ guidelines. and based on actual patient information (like interactions or lack of improvement) they will change drug type based on the evidence. Again, look at the BNF for interactions and contra-indications

for example look at this for nose infection: https://bnf.nice.org.uk/treatment-summary/nose-infections-an... a list of four drugs and an order to try. Notice that its drub clases, not brands.

Doctors should not be allowed to prescribe brands in the states until the corruption is under control


just curious, do you think it’s just a coincidence that US companies are responsible for the vast majority of medical innovation?


Coincidence on what? What are you trying to say? Which facts correlate with that statement?

That the US has the largest influx of educated immigrants? That the US has the shittiest medical system? That the US has the largest health insurance administrative overhead in history? That free market capitalism applied to healthcare has birthed the opioid epidemic? All of the above?


> For 1 billion Australian dollars — $766 million U.S. — Australia gets, for five years, all the hep C medicine it can use.

What will happen in five years ? If we follow the Netflix model, a lot of what used to be available will simply stop being there because the producer will markup the price significantly. In Netflix case, I don't really care since I can download the movies from other sources anyway, but for drugs ? No thanks. The consequence of getting a fake product from the black market are orders of magnitude worse than downloading some porn.


> What will happen in five years ?

According to the article, Australia is on track to have hep C eradicated by 2026.


That's 7 years away...


What's stopping the producer from marking up the price if there isn't a flat-rate price?


Ideally competitors drugs will have been brought to market by then, or patents will have expired.


A great theory but one major flaw. The utility value of most tv and movies comes when they are brand new with quickly diminishing returns afterwards.

Drugs on the other hand have equal utility for their lifetimes (until replaced by something better, which can in some cases take centuries). In fact sometimes a secondary use for a drug is found and its utility goes up.

Entertainment rarely has increasing utility. Even the biggest sleeper hits have a short peak of utility until returning to baseline.

It’s two totally different utility models and I don’t think the cost models are transferable.


I don't understand how you're measuring.

Hep C medicine has zero utility value for me right now.

And I'm enjoying watching Brooklyn 99 from the beginning right now, because I'd never seen it. My wife is watching series after series on Netflix that are all old.

My daughter is enjoying the entire archive of Disney movies. Snow White is what, 82 years old?

When Incredibles 2 is coming out, you can bet the utility of Incredibles 1 went way up.

That said, I think you're being entirely too specific and literal. It's a bad, clickbait analogy. And? Buy medicine in bulk. Not a huge leap to make.


If you think you or one of your loved ones might someday need a blood transfusion I would say that's positive value right there. Even if 100% of infected blood is screened out, Hep C decreases the available supply and that will have consequences downstream.


Maybe because that’s just you, a unique individual.

For a different unique case, such as someone who has Hep C, the utility value for the medicine could literally be everything for the person.

So, if we average the utility value for a whole population, the utility value would actually be pretty high, especially if a lot of people have Hep C.


I'm sorry, can you explain how we "average" the utility?

For me, it has zero value.

For another person, it saves their life, and they would pay literally anything they could.

How do we average that?

My hot take: We can't. Buy medicine in bulk, give it to people for free, progressive taxes to pay for it.


I like your take, but how are we going to enforce progressive taxation? The wealthiest firms escape taxation, at the moment.


We ought to tax wealth instead of income, and tax individuals instead of corporations. The nature of corporate wealth is that the generation of value is disconnected from the generation of cash. It’s impossible to fairly regulate the infinite shell games that result from this. The problem we are trying to fix is inequality of wealth, so we should tax wealth directly and not via proxies like corporate profits.


I can't pretend the answer is easy, but...

Starting with personal income tax, capital gains, and estate taxes would go a long way.

I think we really need to come up with an International version of the Uniform Commercial Code. And get money out of politics.


Yeah, you don't tear down his overall point with your anecdotal, n=1 case. It's the population average not N=1 average, that we care about in public health.


Drug Patents come with time limits, after which any company can manufacture and sell as generics.



Not sure if you're posting this as a disagreement with the suggested model, or agreeing.

From the link, it looks like it costs ~$10bn per successful drug, at the top end of that list.

Australia paid $750m for 5 years access.

Australia has ~1/10th the population of the United States. and ~1/3rd the population of the UK.

If just the UK, USA and Australia paid at that same rate (per capita) then they would cover that 10bn average development cost in 5 years.

Seems like it's a good suggestion


I imagine the Hep C drugs are some of the more monetizable drugs though and will need to rake in more money to subsidize the development of niche drugs.


Those numbers are sign of incredible waste and wrong incentives.

The incentives in drug industry are towards developing patentable molecules and techniques, not for discovering new ways to cure things. There is too much overlapping development, not actual drug discoveries that provide net benefits for the society in exchange for patent monopoly. When some discovers a new chemical entity (NCE) and gets it approved, competitors spend massive amount of money developing new molecular entities (NME) that do the same thing with slightly different molecule.

Then those srug companies use evergreening and pay-for-delay that adds several billions annually.

Governments should look very critically to drug patents start paying only for actual discoveries.


But sometimes new chemicals do cure things. Or at the very least treat them well enough to make life worth living. I'd much rather exist in a world with AIDS medicine than a world where you just die, even if I'd rather have a cure.

I take different medicines that improve my quality of life. Without one I would never be able to realize one of my most valuable potentials. I could sit here and complain that we don't yet have the medical knowledge to indefinitely prolong life (which I do), but at the same time I have the humility to appreciate that being born even a few decades before in the long history of humanity and I would have had a much lesser life.

Don't get me wrong, I'd love for pharma to take a more efficient and satisfactory path, but I definitely recognize how life is better thanks to it.



What a terrible analysis. Pretty sure that number is just the "Selling, marketing and administrative expenses" line from the 10-K, which lumps all expenses outside of COGs, R&D and a few others.

That's not just marketing as people know it. It's all the other costs of running a company too.


Except drugs are different from other products. If a drug is actually a good idea for patients, with no profit motive behind it, it will sell itself. Doctors should be aware of the drugs the big drug manufacturers are producing, and prescribe accordingly based on need. If you need to hawk your drug by plastering TV ads all over the place, or by having salespeople push it to hospitals / etc., it's arguably not a necessary drug.


> If a drug is actually a good idea for patients, with no profit motive behind it, it will sell itself.

This is completely false.

There's a once-daily pill that prevents contracting HIV, yet most of the people who have the greatest risk of contracting HIV (Black gay men) aren't taking it. Why? According to mountains of peer-reviewed research, the predominant factor is that they don't know it exists. That is literally a marketing problem.

For patients who are aware of the drug, the most common reported reason for not taking it is that they can't find doctors who know it exists (or how the treatment regimen works). Again, this is literally a marketing problem.

In the case of this drug, there are additional barriers for many of these groups beyond just knowing of its existence, but that's the first and biggest one. It is 100% false to say that a drug that is a good idea for patients will "sell itself".


This is a great example.

I can only think one or two examples of drugs that "sold themselves". The new HCV meds are a good example of a lot of pent up demand even prior to approval. That said, there were still physicians out there that were not aware of the approval, so marketing still had work to do.


> I can only think one or two examples of drugs that "sold themselves". The new HCV meds are a good example of a lot of pent up demand even prior to approval. That said, there were still physicians out there that were not aware of the approval, so marketing still had work to do.

Exactly - incredible demand for them, and even still Sovaldi didn't sell itself.


If a drug is actually a good idea for patients, with no profit motive behind it, it will sell itself.

This is entirely untrue.

The one thing I learned in the biotech space is that doctors range from those doing research and know all about the cutting edge drugs all the way to doctors who are surprised to learn about a new drug that was approved a year ago. And there are way more of the 2nd kind.

Changes to how conditions are treated actually happens really slowly. What often hinders adoptation of new drugs is information and that’s a key goal of marketing - actually letting doctors know something new is available.


Then that's a problem with your doctor.


That's a problem with a lot of doctors.

And that's not to slam them. They often treat a ton of different diseases, and a new drug launch isn't the highest priority for them. They'll eventually learn about it, so marketing is an attempt to accelerate that.


Doctors don't just become magically aware of new drugs, it's not like every MD gets a newsletter a la "here's what shows are coming to Netflix". Treatments compete over the condition/disease just like any competitive market, even if a drug has a patent.


Why don't doctors just get a newsletter?


> Why don't doctors just get a newsletter?

Even if they did, that would literally be marketing, which is what you're apparently against.


I assume they meant a non-promotional newsletter that isn’t from the manufacturer.

Those do exist, but not all doctors read them. However, those same doctors might spare 10 min to have a manufacturer rep stop by to answer questions.

I’ll also add that doctors aren’t dumb. They know anything from manufacturers is biased - they want to sell drugs. They usually rely on other physicians to give them info on real world experience with a drug.


I went to PAMF in Palo Alto, california yesterday for a "group diagnosis session" with the dermatologist. It seems dermatologist appointments are hard to get, so they came up with this method. You sit in a circle with other patients and doctor comes to each of you and quickly checks what happened to you and prescribes medicines. If she thinks it requires deeper consultation, she will scheduler private visits.

I thought this is a good system, especially if you are young and kind of know that what you have is one off fever or some such thing.

What am I missing? Why are more hospitals not following this? Why is no one applying to YC with this idea?


I would not be comfortable with that method, and would definitely find a new doctor if I was presented with that situation


Well big ailments I would mind too. But small ones like fever or flu, I am ok particularly because its much less time consuming and much cheaper.


Ah, a reverse quarantine


Maybe I’m missing something, but discussions on the cost of medicine never seem to question whether using prescription drugs is the right choice to begin with.

IMO, it would be far preferable to treat pharmaceuticals as a last resort, focusing instead on preventative medicine and addressing the underlying social issues that cause the medicine to be prescribed in the first place. From the article:

Hep C kills more people in the United States than all other infectious diseases combined. Cases are soaring, largely caused by injection of heroin and opiates; it’s a blood-borne virus spread by sharing needles.

Surely the solution to this epidemic is to address the underlying drug problems first?

Edit: I’m not suggesting that the treatments be ignored or that people who already have the disease aren’t helped. But rather that if X disease has an increase in cases, the only solution shouldn’t be to treat it - it should also be to figure out why it’s increasing and then try to prevent it.


> Maybe I’m missing something, but discussions on the cost of medicine never seem to question whether using prescription drugs is the right choice to begin with.

Because it's pretty darn obvious that once you have Hep C, yes, prescription drugs are the right choice. No one's pumping Hep C drugs into people who don't have Hep C.

> Surely the solution to this epidemic is to address the underlying drug problems first?

I'd recommend addressing both problems at the same time. There's no reason we can only do one.


Limited people, time, and resources are why you can't do both at the same time. Developing one solution impedes the development of another


> No one's pumping Hep C drugs into people who don't have Hep C

However, that is what is being done with HIV drugs under the guise of PrEP

https://en.wikipedia.org/wiki/Pre-exposure_prophylaxis

So I wouldn't be so quick to rule it out, specially if Pharma companies see a way to profit out of it.


> Under the guise of

I thought y'all were all about prevention? Now you're acting like preventing acquisition of a lifetime disease is a bad thing.


Prevention is great, and I'm certainly a big fan of it...

but by overexposing people to the drugs that are actually effective against HIV we're both helping the virus evolve around them and having to deal with whatever adverse side effects the drugs have on healthy patients.


Yes, but to address rampant drug abuse- especially the kind where users are sharing needles-, you'd have to address a host of systemic social problems, poverty foremost amongst them. I agree that's a great idea, but also one that's not in the interests of the pressure groups keeping pharmaceuticals expensive either.

Just in case anyone still needs a source for this kind of thing, here's an example: https://www.webmd.com/mental-health/addiction/news/20180326/...


You may be interested in this: https://news.ycombinator.com/item?id=19328202

Apparently the mortality rate from ICD-10 X44 (stuff like blood pressure medication, antibiotics, etc) causes has risen more than 5x over the last 20 years. It seems these deaths are getting grouped in with X42 (heroin, cocaine, etc) in all the reports we hear about.

http://apps.who.int/classifications/apps/icd/icd10online2004...


Actually an easier solution is providing free needles. No massive society has ever been drug-free AFAIK.


This worked out exceptionally well in my native Portugal. Specially when combined with decriminalization of all drugs.

https://www.economist.com/europe/2009/08/27/treating-not-pun...


If you treat the drug problem without addressing the cost of the treatment, you may end up doing too good a job. The Hep C treatment could become less profitable for drug companies, driving prices up for the (smaller number of) people who still get Hep C.

You need to address both issues. By your own admission, "Hep C kills more people in the United States than all other infectious diseases combined." It would be outright unethical to do nothing to address treatment for people who already have the disease. And besides, sharing needles doesn't cause Hep C infections: sharing needles with someone with Hep C does.


Addressing the underlying problem is orders of magnitude more difficult. That doesn't mean we shouldn't try (and we already are trying), but saying "just fix the root cause" isn't actually a helpful suggestion.


Drugs are not the last resort. Amputation of infected limbs was once a common treatment for infection. So too blood transfusions. Drugs are now used instead. That is a good thing.


> Surely the solution to this epidemic is to address the underlying drug problems first?

Try this scenario out for size: Tomorrow you go shopping, while leaving the shop, a teenager enters with a gun demanding money, he gets nervous and shoots the cashier and while running out the store shoots you in the leg. Luckily authorities are quickly at the scene, arrest the criminal, and medical personal take the clerks body away. A cop comes by you and says: Geesh, that sure looks bad, but don’t worry, we are hard at work trying to solve the youth criminal behavior at the root of your current condition. And don’t worry after you bleed to death the medics will be able to fit you in the same van as the clerk, so you won’t be that big of a bother for them. Sad though to think, before we started focusing solely on root cause issues, they could have just stopped your bleeding and taken you to the hospital. But I hope you understand, it’s about efficient allocation of resources.


You didn’t read the entire second half of my comment.


> Surely the solution to this epidemic is to address the underlying drug problems first?

If we were gods who could "address" any problem we wish by pure will power, that would make perfect sense.

For mere humans, some problems are much harder than others, and it's best to focus efforts on the solvable ones.


Not that it’s particularly effective but we do have a “War on Drugs”.

The reality is that both are worth pursuing. Prevention may get better with something like improved access to clean needles. But people will still have Hep C and it’s not just nice to try and help them, it’s economical to do so.


> but we do have a “War on Drugs”.

Which is not more than a scam by now.

Wikipedia has a nice section on the efficacy of this war: https://en.wikipedia.org/wiki/War_on_drugs#Efficacy_of_the_U...


You overestimate the willingness of people to save their own life by not smoking, eating healthy, exercising etc.


i dont think that eating too many cheeseburgers is very similar to being a user of insanely addictive intravenous drugs...

do you think that "just stop injecting heroin" is actually all it takes?


You have to look at the numbers (I haven't, just think hamburgers are more harmful).

I think doctors to want patients to exercise & stuff, but patients don't (ex: diabetes).


Seems like Ben Thompson's aggregation theory could be useful to look at here.

Netflix & Spotify are aggregators, they own the consumer and distribution. Acquisition of movies costs either royalties to a studio or cost to produce the movie (actor salaries, etc.) Royalties are probably negotiated and the aggregator has leverage in negotiations because they own the consumer and distribution to them.

Insurance owns the patient, but the patient doesn't necessarily get to choose the medication. Their condition plus the doctor's prescription dictates what medication they can use. You're also not allowed to shop around for doctors who will prescribe what you ask for. Pharmacies own the distribution of medication. Drug companies need to recoup the massive R&D costs of developing drugs and thus are granted 20 year patents. This is somewhat similar to studios producing content and the copyrights afforded to those studios.

Not sure how to put all of this together but I think a big difference is that the consumer doesn't have discretion like they do in the Netflix/Spotify space. Maybe a good parallel would be Friends/Garth Brooks. If I want to watch Friends, I have to use Netflix or if I want to listen to Garth, I have to use Amazon Music. But despite the fact that I enjoy Garth's music, I can live without it or I can get it through other means (youtube, buying an album direct from a studio-owned distribution channel, etc.) People literally cannot live without some of these medications so consumer discretion is removed there.

Also, consumers don't have the ability to self-diagnose and self-prescribe. There are also no other distribution channels for medication. All of it must come through a pharmacy. There is no distribution done by the owner of the consumer(insurance companies), although PBMs may be a similar model?

Maybe somebody else could help me fill in the gaps with how the aggregator model is different from the pharmaceutical model or identify mistakes in my assumptions.


It really boils down to what a society values. Does it value caring for people and health or does it value hurting people for profit? We have the tools to be caring but in America, we generally don't use them because we value companies' profits above all else. We let corporations profit as much as they want off the suffering of others. We used not to, as the article points out. We can override patents. We can see drug users as human. We can try to eradicate diseases like hep c. Or we can go our current path and let corporations profit while millions die. It's really a cultural issue. Do we want to be compassionate or do we want to exploit our own people? That is the question being asked when we talk about reducing drug prices and having national healthcare instead of the vile insurance and drug industries we support now. It's not looking too hopeful for compassion at the moment.


Cool, I’d love to share my insurance with 3 people strategically distributed across time zones to avoid contention.

But please don’t send me emails about my insurance being suddenly used in Egypt. Those false alarms are really worrying.


The pop up alerts when your friend’s ex’s mother gets an abnormal blood result can be a real drag.


The system is too entrenched especially after all the unchecked consolidations disguised under the ACA. Put it bluntly it’s disgusting. The drug pricing trends we are seeing is a form of regulation arbitrage. We need to overhaul the FDA and the way new and old drugs are approved.


The reason why Gilead is doing this is because their hepatitis C franchise has already slowed and will likely be much smaller in a few years. Far better to negotiate a deal like this and lock a country into buying your treatment than to lose market share against competitors.


If only we had private companies that can freely experiment with different business models...


This seems quite important, and raises questions about whether free market capitalism is actually the best or only model to spur innovation (spoiler: I don't think it is, at all).


What's stopping national health systems from opening their own pharmaceutical branches?


don't ask that question, its not allowed :D!

(because governments earn BIG TAXES from these other companies ;)... which pays their wages... see where the rabbit hole leads.. )


Especially when lives are at stake! Market capitalism is probably fine for coffee shops, less so for insulin pumps.


The part of medicine that's often overlooked is the creation of new medicine. Usually the discussion goes along the lines of "we can make pill X for $0.1 each, but these greedy pharmaceutical companies just want profits". But what they're missing is that without those pharmaceutical companies we probably would have far fewer treatments/drugs in the first place. Doctors and labs need money to run. Investors help with that. If you chase investors out then less research will be done. You won't feel it immediately but after a decade or two it will catch up with us.


> If you chase investors out then less research will be done. You won't feel it immediately but after a decade or two it will catch up with us.

I don't think you'll feel it... BUT, if we keep investing in drug research we'll feel it :)

You don't have to look far to fine an article like "Cancer Statistics Report: Death Rate Down 23% in 21 Years"

I'm not sure we'll notice if the improvements don't keep coming, but we will notice if the improvements keep coming :)

Today, we're keenly aware how HIV isn't a death sentence anymore.


Can you name a country where the latest technology is developed by the gov't? Even in the highly socialist systems of Europe they rely on private companies to develop products.


> Can you name a country where the latest technology is developed by the gov't? Even in the highly socialist systems of Europe they rely on private companies to develop products.

And if you look at the actual financial statements, those private companies in Europe rely disproportionately on sales in the US market to fund their operations.


We are big pharam, give us tons of money and hope that we cure you! We don't! we just treat you.


We desperately need a socialist pharmaceutical industry: The same researchers that work for Gilead Science could work for the NIH. Instead of directing research at the most profitable niches it could be directed at the guidance of the CDC.


Line 2 of the article is:

> Why can’t the United States?

The answer is either “regulatory capture masquerading as capitalism” or “but that’d be socialism!” depending on how snarky you’re feeling.


I don't think most people have fully internalized the fact that insurance companies are fully invested in rising medical costs since their margins are regulated and their BoD are looking for rising profits. Their "everybody wins!" means everyone who pays for medical care loses.

They would rather drive lower cost independent doctors into a higher cost hospital systems as long as all of their competitors pay the same... and they do.


So, I should binge on them?


Am I missing something:

>A study just published in The New England Journal of Medicine found that on average, Australia pays $7,352 (U.S.) per course of treatment. It has been able to treat seven times as many patients as it would without the agreements.

I guess the reason we don't treat medicine like Netflix is because most people don't want to spend $7352 for a course of penicillin....?


What does penicillin have to do with this?


I don't want to put words in their mouth, but I think it might be a bundle vs a la carte argument. For issues that tend towards short term treatments (eg a handful of antibiotic pills to mitigate the risk of wound infection) then you don't want to pay the same total price as someone who is treating some chronic condition.

I can't find statistics on comparing one-off and routine prescription drug use. CDC data from 2014 shows that when asking about a 30 day period 47% of the population used >1 prescription drugs, 21% used >3 drugs, and 11% used >5 drugs. That suggests to me that there is a large population of people who could be bundled together, but for the context of the article this would all depend on the specific treatments.

https://www.cdc.gov/nchs/data/hus/2017/079.pdf


> I don't want to put words in their mouth, but I think it might be a bundle vs a la carte argument. For issues that tend towards short term treatments (eg a handful of antibiotic pills to mitigate the risk of wound infection) then you don't want to pay the same total price as someone who is treating some chronic condition.

Yeah this is what I meant. The article says that the Australian government offset the high cost of new Hep-C drugs by negotiating a flat rate of $7.5k per person per year for any Hep-C drugs, and then talks about the high cost of penicillin and epipens.

Nobody would use Netflix if the subscription fee had to account for films that cost billions in R&D and only 10 people were going to watch.




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