9 ms·

This whole drug company argument -- that the only thing that really matters is what end users pay as a co-pay or co-insurance and that no one should care what i

This whole drug company argument -- that the only thing that really matters is what end users pay as a co-pay or co-insurance and that no one should care what insurance companies (including governments) pay -- is so breathtakingly bad I can only imagine it is in bad faith. Where do they expect us to believe the institutional payments are coming from, out of thin air?

gizmodo59 10y ago
One of the things I do not understand is, the explanation given is that Obamacare fixes the donut hole where people who are not enrolled in company sponsored/medicare could get insurance. This has just let the drug companies to raise the price without any backslash because the end user is "not" paying the price. However, the rising premiums and plans with high deductibles meant that the drugs are still not affordable even if you are covered by some insurance. What is the solution to this? Single-payer health care?
- whatshisface 10y ago
  If only insurance companies had some sort of pressure to reduce costs and prices. Some sort of... market.. pressure...
  - mhurron 10y ago
    Because that's happened before? Or are you suggesting that the US system isn't laissez-faire enough?
  - codegeek 10y ago
    They never have any reason to do that. Too much power. We need to get a system in place that gets rid of too much power away from the insurance companies, plain and simple. With the amount of money and lobbying they do, probably not likely in the near future unless the Congress grows some balls and do something real about healthcare and not just the usual talking points.
  - ch4s3 10y ago
    How could that ever happen? Information asymmetry is as high as you could imagine. A doctor tells you to take x or you will die. X has a price set by Insurance Co. You have no medical training or pharmaceutical training, so how do you make a decision? If x is really required so that you don't die, demand is completely inelastic, you will literally pay anything you can afford, or you'll take out loans you can't afford. The only limiting factor on price would seem to be median income and credit availability.
  - jandrese 10y ago
    They do in a way. By denying claims they can reduce demand for a specific drug or procedure and send a signal to the company that the price is too high. The slight complication is that people will die without their meds, but the market doesn't care about that. It's only concerned with money.
- a_humean 10y ago
  What literately every other country does: Old fashioned price controls. Government as a buyer or as a regulator puts a cap on the price through a process of negotiation, and be willing to say no when the price is too high and the benefits are too low. The UK's NICE body regularly rejects new products if they don't represent value. New cancer drug that extends life by two months but costs £10k per pill with a course of treatmeant costing £100k; no thanks. Its a market with inelastic demand - people will literately die if they don't buy the product. We, rightly, through regulation demand high quality assurance because if something is meant save someone from a quick death it better be reliable and not cause greater harm due to product defects. This means the entry barriers are quite high making competition difficult. Without price controls there is literately nothing but the CEO's conscience to keep from pushing the prices up. If the product will stop you from dying and nobody else can offer it, then there is basically no price you won't pay.
  - anexprogrammer 10y ago
    There was a programme on R4 about NICE, drug companies and finance in health care a month or two back. I discovered two new (to me) things. First it's common for drug companies to tweak patent protected items suspiciously near end of patent - to find a new use, or reformulate a tablet as a capsule - to buy more patent period. Second in the case of off patent medicines, some are harder to make or not prescribed widely enough for the generic makers to bother with. These seem to be the things at risk of price gouging. There was an example of something off patent sold by Pfizer to another company who now charge 10x more, as there is no generic alternative. That's now at the competition authorities. So we mitigate a lot of this, but we apparently don't avoid it entirely. EDIT: Programme page with mp3: http://www.bbc.co.uk/programmes/b07j7j6m http://www.bbc.co.uk/programmes/b07j7j6m
djschnei 10y ago
"But healthcare (including all the labor and money that goes into it) is my right!!1!"
codegeek 10y ago
This. Exactly This. I am sick of hearing "oh you just pay $20 co-pay". No we don't. The real cost is much more and these pharmas and insurance companies know it. I know because I paid it for a family of 4. It costs $1500/Month for a decent plan that does not have high "out of pocket" costs (Read capped at $5000). So you pay $1500 per month and in worst case scenario, you can still pay $5000 out of pocket for a year IF the insurance company does not deny a claim. I usually don't make political comments but one thing that was disappointing with Obamacare was the fact that it did not address this root cause and instead touted that now anyone can get insurance. Sure, someone with pre-existing condition is now probably a little better off but overall, obamacare did not address the main issue: getting rid of middlemen (insurance companies) and let doctors/hospitals work on fair and transparent pricing. Isn't that what America is all about ? Free Market, eh. If I may steal the legendary MLK's words, I have a dream. A dream where I can call any doctor/hospital and ask what will it exactly cost to get a simple X-Ray done without saying "Oh no, I ain't got no insurance". Just a dream.
- gizmodo59 10y ago
  Adding to this, if you have insurance most of the hospitals will jack up the prices. One of my friend did not have the insurance card, so the hospital billed X$ and told him that if he later gives the insurance id they will charge them. He later called the hospital and gave the insurance details and he is charged (X+Y)$. Being the first time he got sick this year, he had to pay his entire deductible meaning he paid more because he HAD insurance.
  - phkahler 10y ago
    IMHO providers should be required to charge the same price to all patients. That's not to say hospital X should pay the same as hospital Y, just that X needs to charge the same to all it's patients for a given service/procedure and Y needs to charge their own price for the same to all their patients. If you have insurance, then they need to be charged the same too. This would go a long way to promoting competition and price transparency.
    - 10y ago
thr0waway1239 10y ago
Agreed. Any little price accountability will be lost when they convince that the federal government will need to pay for it.[1] I have to unfortunately be very vague because I don't remember the actual reference, but I remember a similar problem where the lobbyists didn't get what they wanted , and discreetly added it into some kind of unrelated bill in the midst of some fine print.[2] An excellent use for using something like natural language processing is to find outlier items which simply do not belong in a law which is being passed. [1] I am also told that from the perspective of the R&D labs which spend a ton of money up front to produce the drug that this is the only way to recoup costs. And the costs for the R&D labs are usually blamed on excess regulation, so that is apparently a sort of justification for these subsidy requests (which still doesn't make sense). Edit: [2] I bring this up because the article mentions the following and I think the euphemism has at least one possible explanation: "But a review of Mylan’s lobbying history makes clear that the company has an exceptional track record at influencing government policies, both in Washington and in state capitals. Heather Bresch, Mylan’s chief executive, called the effort “our unconventional approach to growing this franchise” in remarks to Wall Street analysts last year."
- criddell 10y ago
  Maybe they should fold the R&D department into the marketing department. That's where all the drug company money is spent.
  - rayiner 10y ago
    The fact that companies often spend more on marketing than R&D is irrelevant. The fact is that they spend billions on R&D. They have to recoup that. Presumably they don't spend money on marketing for shits and giggles--they spend how much they need to maximize revenue.
    - FireBeyond 10y ago
      Ask yourself, why is the United States the only country in the world where advertising prescription medicine to consumers is allowed? Why is it even needed? I know some people say "education", but that's backward. You have a problem. You go to your physician. He works out a treatment plan for you. For drugs advertised for specific conditions? To enlighten you to alternatives? You can oftentimes assume that alternatives exist, for most common complaints. For those that don't? Those ads are such a dragnet of wide ranging and vague conditions that oftentimes, the majority of the population would qualify ("Are you feeling run down? Do you have trouble getting to sleep? Ask your doctor about trying XXX". No. Ask your doctor about your conditions. Let them decide whether to try XXX. Or YYY. Or just to get more sleep). There's no justifiable need that I can see that prescription medication need be advertised to anyone other than physicians and practitioners. Oh, and it's not "often" that they spend "more". There is not one of the top ten pharma companies that spends more on R&D than marketing. Every one outspends on marketing. And by "more", the smallest gap is "four times more" leading up to "seventeen times more". And we wonder why healthcare is so expensive here...
SilasX 10y ago
It's because people seem to believe insurance companies are an endless font of wealth. It's maybe a caricature, but a lot of stuff starts making sense if you assume it: e.g. how people are fine with burdens if they are nominally imposed on "insurers" rather individuals. I remember there was the controversy in the '08 election about Gov. Palin charging rape victims for their rape kit, and several people refuted it by insisting that they actually billed their health insurer [1] Forget for the moment whether the argument worked or not, or is valid or not; the fact that they thought it was responsive says volumes about the typical person's "bottomless vault" model of insurance. [1] http://www.politifact.com/truth-o-meter/article/2008/sep/22/palin-rape-kit-controversy/ http://www.politifact.com/truth-o-meter/article/2008/sep/22/...

gizmodo59 10y ago

One of the things I do not understand is, the explanation given is that Obamacare fixes the donut hole where people who are not enrolled in company sponsored/medicare could get insurance. This has just let the drug companies to raise the price without any backslash because the end user is "not" paying the price. However, the rising premiums and plans with high deductibles meant that the drugs are still not affordable even if you are covered by some insurance. What is the solution to this? Single-payer health care?

whatshisface 10y ago
If only insurance companies had some sort of pressure to reduce costs and prices. Some sort of... market.. pressure...
- mhurron 10y ago
  Because that's happened before? Or are you suggesting that the US system isn't laissez-faire enough?
- codegeek 10y ago
  They never have any reason to do that. Too much power. We need to get a system in place that gets rid of too much power away from the insurance companies, plain and simple. With the amount of money and lobbying they do, probably not likely in the near future unless the Congress grows some balls and do something real about healthcare and not just the usual talking points.
- ch4s3 10y ago
  How could that ever happen? Information asymmetry is as high as you could imagine. A doctor tells you to take x or you will die. X has a price set by Insurance Co. You have no medical training or pharmaceutical training, so how do you make a decision? If x is really required so that you don't die, demand is completely inelastic, you will literally pay anything you can afford, or you'll take out loans you can't afford. The only limiting factor on price would seem to be median income and credit availability.
- jandrese 10y ago
  They do in a way. By denying claims they can reduce demand for a specific drug or procedure and send a signal to the company that the price is too high. The slight complication is that people will die without their meds, but the market doesn't care about that. It's only concerned with money.
a_humean 10y ago
What literately every other country does: Old fashioned price controls. Government as a buyer or as a regulator puts a cap on the price through a process of negotiation, and be willing to say no when the price is too high and the benefits are too low. The UK's NICE body regularly rejects new products if they don't represent value. New cancer drug that extends life by two months but costs £10k per pill with a course of treatmeant costing £100k; no thanks. Its a market with inelastic demand - people will literately die if they don't buy the product. We, rightly, through regulation demand high quality assurance because if something is meant save someone from a quick death it better be reliable and not cause greater harm due to product defects. This means the entry barriers are quite high making competition difficult. Without price controls there is literately nothing but the CEO's conscience to keep from pushing the prices up. If the product will stop you from dying and nobody else can offer it, then there is basically no price you won't pay.
- anexprogrammer 10y ago
  There was a programme on R4 about NICE, drug companies and finance in health care a month or two back. I discovered two new (to me) things. First it's common for drug companies to tweak patent protected items suspiciously near end of patent - to find a new use, or reformulate a tablet as a capsule - to buy more patent period. Second in the case of off patent medicines, some are harder to make or not prescribed widely enough for the generic makers to bother with. These seem to be the things at risk of price gouging. There was an example of something off patent sold by Pfizer to another company who now charge 10x more, as there is no generic alternative. That's now at the competition authorities. So we mitigate a lot of this, but we apparently don't avoid it entirely. EDIT: Programme page with mp3: http://www.bbc.co.uk/programmes/b07j7j6m http://www.bbc.co.uk/programmes/b07j7j6m

djschnei 10y ago

"But healthcare (including all the labor and money that goes into it) is my right!!1!"

codegeek 10y ago

This. Exactly This. I am sick of hearing "oh you just pay $20 co-pay". No we don't. The real cost is much more and these pharmas and insurance companies know it. I know because I paid it for a family of 4. It costs $1500/Month for a decent plan that does not have high "out of pocket" costs (Read capped at $5000). So you pay $1500 per month and in worst case scenario, you can still pay $5000 out of pocket for a year IF the insurance company does not deny a claim. I usually don't make political comments but one thing that was disappointing with Obamacare was the fact that it did not address this root cause and instead touted that now anyone can get insurance. Sure, someone with pre-existing condition is now probably a little better off but overall, obamacare did not address the main issue: getting rid of middlemen (insurance companies) and let doctors/hospitals work on fair and transparent pricing. Isn't that what America is all about ? Free Market, eh. If I may steal the legendary MLK's words, I have a dream. A dream where I can call any doctor/hospital and ask what will it exactly cost to get a simple X-Ray done without saying "Oh no, I ain't got no insurance". Just a dream.

gizmodo59 10y ago
Adding to this, if you have insurance most of the hospitals will jack up the prices. One of my friend did not have the insurance card, so the hospital billed X$ and told him that if he later gives the insurance id they will charge them. He later called the hospital and gave the insurance details and he is charged (X+Y)$. Being the first time he got sick this year, he had to pay his entire deductible meaning he paid more because he HAD insurance.
- phkahler 10y ago
  IMHO providers should be required to charge the same price to all patients. That's not to say hospital X should pay the same as hospital Y, just that X needs to charge the same to all it's patients for a given service/procedure and Y needs to charge their own price for the same to all their patients. If you have insurance, then they need to be charged the same too. This would go a long way to promoting competition and price transparency.
  - 10y ago

thr0waway1239 10y ago

Agreed. Any little price accountability will be lost when they convince that the federal government will need to pay for it.[1] I have to unfortunately be very vague because I don't remember the actual reference, but I remember a similar problem where the lobbyists didn't get what they wanted , and discreetly added it into some kind of unrelated bill in the midst of some fine print.[2] An excellent use for using something like natural language processing is to find outlier items which simply do not belong in a law which is being passed. [1] I am also told that from the perspective of the R&D labs which spend a ton of money up front to produce the drug that this is the only way to recoup costs. And the costs for the R&D labs are usually blamed on excess regulation, so that is apparently a sort of justification for these subsidy requests (which still doesn't make sense). Edit: [2] I bring this up because the article mentions the following and I think the euphemism has at least one possible explanation: "But a review of Mylan’s lobbying history makes clear that the company has an exceptional track record at influencing government policies, both in Washington and in state capitals. Heather Bresch, Mylan’s chief executive, called the effort “our unconventional approach to growing this franchise” in remarks to Wall Street analysts last year."

criddell 10y ago
Maybe they should fold the R&D department into the marketing department. That's where all the drug company money is spent.
- rayiner 10y ago
  The fact that companies often spend more on marketing than R&D is irrelevant. The fact is that they spend billions on R&D. They have to recoup that. Presumably they don't spend money on marketing for shits and giggles--they spend how much they need to maximize revenue.
  - FireBeyond 10y ago
    Ask yourself, why is the United States the only country in the world where advertising prescription medicine to consumers is allowed? Why is it even needed? I know some people say "education", but that's backward. You have a problem. You go to your physician. He works out a treatment plan for you. For drugs advertised for specific conditions? To enlighten you to alternatives? You can oftentimes assume that alternatives exist, for most common complaints. For those that don't? Those ads are such a dragnet of wide ranging and vague conditions that oftentimes, the majority of the population would qualify ("Are you feeling run down? Do you have trouble getting to sleep? Ask your doctor about trying XXX". No. Ask your doctor about your conditions. Let them decide whether to try XXX. Or YYY. Or just to get more sleep). There's no justifiable need that I can see that prescription medication need be advertised to anyone other than physicians and practitioners. Oh, and it's not "often" that they spend "more". There is not one of the top ten pharma companies that spends more on R&D than marketing. Every one outspends on marketing. And by "more", the smallest gap is "four times more" leading up to "seventeen times more". And we wonder why healthcare is so expensive here...

SilasX 10y ago

It's because people seem to believe insurance companies are an endless font of wealth. It's maybe a caricature, but a lot of stuff starts making sense if you assume it: e.g. how people are fine with burdens if they are nominally imposed on "insurers" rather individuals. I remember there was the controversy in the '08 election about Gov. Palin charging rape victims for their rape kit, and several people refuted it by insisting that they actually billed their health insurer [1] Forget for the moment whether the argument worked or not, or is valid or not; the fact that they thought it was responsive says volumes about the typical person's "bottomless vault" model of insurance. [1] http://www.politifact.com/truth-o-meter/article/2008/sep/22/palin-rape-kit-controversy/ http://www.politifact.com/truth-o-meter/article/2008/sep/22/...