10 ms·
Medicare Part D plans are run by private insurers and they certainly do negotiate on price. Why is a third party negotiating for Medicare, rather than Medic
by sbierwagen 10y ago
Medicare Part D plans are run by private insurers and
they certainly do negotiate on price.
Why is a third party negotiating for Medicare, rather than Medicare negotiating directly? Because they're smaller, and have less leverage.
physician administered drugs are paid for at a rate
that is the average of what private payers pay.
Why is a third party negotiating for Medicare, rather than Medicare negotiating directly? Because they're smaller, and have less leverage.
From http://www.cnn.com/2015/09/28/health/us-pays-more-for-drugs/ http://www.cnn.com/2015/09/28/health/us-pays-more-for-drugs/
-- Gleevec (a cancer treatment): $6,214 (per month/per customer) in the United States, compared to $1,141 in Canada and $2,697 in England.
-- Humira (for rheumatoid arthritis): $2,246 in the United States, compared to $881 in Switzerland and $1,102 in England.
-- Cymbalta (for depression): $194 in the United States, compared to $46 in England and $52 in the Netherlands. In fact, there is also a generic version of Cymbalta so these prices reflect having a cheaper alternative.
Some molecule. Different price.
- Arnt 10y agoSwitzerland, England, Canada, the Netherlands... which negotiator in any of those countries is not smaller than Medicare?
- thereisnospork 10y agowell none of them, since Medicare isn't a negotiator?
- rtstreak 10y agoIt actually is based on their integrity.
- Godel_unicode 10y agoTo extend GPs point, there are negotiators in the US who are bigger and therefore seemingly have more leverage than several of those countries. Therefore, perhaps it's not just a size/leverage thing.
- spangry 10y agoEngland has a single-payer (the NHS) and a population of 53m people. So I guess the answer is England?
- chimeracoder 10y ago> England has a single-payer (the NHS) and a population of 53m people. So I guess the answer is England? GP was being rhetorical, but if you really want to know, Medicare has 55 million beneficiaries in the US.
- refurb 10y agoNope. Medicare has 55.3M beneficiaries.[1] [1]http://www.ncpssm.org/Medicare/MedicareFastFacts http://www.ncpssm.org/Medicare/MedicareFastFacts
- dragonwriter 10y ago57 million, but that oncludes 17.6 million that are in third-party at-risk plans where Medicare is just paying a portion of the premiums (Medicare Advantage), not traditional "single payer" Medicare, so don't count in Medicare's negotiating power. So there's just under 40 million in traditional Medicare. http://kff.org/medicare/fact-sheet/medicare-advantage/ http://kff.org/medicare/fact-sheet/medicare-advantage/
- refurb 10y agoYou need to be careful with that definition. For prescription drugs, Medicare just pays premiums to private insurers under Part D. Following your logic, Medicare has zero negotiating power for those drugs.
- foldr 10y agoThe NHS is for the whole of the UK, which is 64 million people.
- foldr 10y agoThe NHS is for the whole of the UK, which has a population of 64 million.
- beambot 10y agoWhat is preventing legislation that simply opens borders / trade for filling prescriptions?
- Retric 10y agoCorruption. However, the line is generally described as: If companies can't discount per country then all countries end up paying high prices without discounts. However, if they can discount prices in some countries then that maximizes profits which increasing the customer base.
- Thriptic 10y agoIt's much more complicated than that. Sales in the US where they can charge more are what actually offer pharma companies good ROI. Effectively the US is subsidizing R&D for the rest of the world.
- irln 10y agoAgreed. Pharma is managing their expenses and profitability based upon the ability to charge much higher prices in the US. Take that away and suddenly everyone outside the US will have to pay more -or- Pharma will have to rethink their business model. The more this connection is obfuscated the easier it is to confuse decision makers.
- Retric 10y agoPharmaceutical companies do a lot more than just R&D making said subsides horribly inefficient and thus a lie. But, yes that's the line used.
- deleted 10y ago[deleted]
- bjshepard 10y agoThis is a lie.
- refurb 10y agoWhy is a third party negotiating for Medicare Look back at the last paragraph in my response above. Medicare is required to cover a number of classes of drugs. they can't say "no, we're not paying for it." As a result, Medicare has no negotiating power. Unless you can walk away from the table, why would drug companies budge? And if Medicare did have the power to say "no", how would that work politically? I'm guessing the AARP would be up in arms if Medicare said "no, we're not paying for that drug, find an alternative." And the price you quote are comparing list prices in the US to net prices (that's usually what's published in the EU and Canada). Humira is significantly discounted in the US. 40 to 50% discounts are not unusual for large payers. A great example are the HCV drugs. When a 2nd class of products entered the market, the drug manufacturers rushed to discount their products to maintain market share. As a result, the US price is lower than the prices in Europe.[1] [1]http://www.forbes.com/sites/johnlamattina/2015/12/04/for-hepatitis-c-drugs-u-s-prices-are-cheaper-than-in-europe/#25d3449264bb http://www.forbes.com/sites/johnlamattina/2015/12/04/for-hep...
- finnh 10y ago> Medicare is required to cover a number of classes of drugs. they can't say "no, we're not paying for it." > As a result, Medicare has no negotiating power. Unless you can walk away from the table, why would drug companies budge? Those statements are only true for drugs with no alternatives - which doesn't apply to all (most?) drugs. And, even for those, couldn't the government say "we're not going to pay $(RANSOMPRICE) for drug X. If you insist that we do, we will not buy any other drugs from you but will instead source from your competitors at all times."
- refurb 10y agowe will not buy any other drugs from you Private payers are free to do that, but don't. The reason why they don't is because they have customers and telling someone "no you can't have this drug" makes people really upset. I'm not sure Medicare would have much more success in that area. I could imagine politicians phones ringing off the hook with call from retirees stating "why won't you pay for my drug"?