Why wouldn't it have the opposite effect? Patients aren't price sensitive when their insurance provider is paying. It creates a suboptimal three (or four) part

Why wouldn't it have the opposite effect? Patients aren't price sensitive when their insurance provider is paying. It creates a suboptimal three (or four) party pricing problem. It seems like it would be preferable if patients chose whether to follow a physician's instructions based on whether they got sufficient utility or quality of life improvements from the pharmaceutical to justify the cost. Likewise, if patients incur lower costs on the insurance provider their business is more valuable, and competing insurance providers will try to undercut them resulting in lower prices. The only "loser" in this scenario seems to be the pharmaceutical companies, which will come in the form of a combination of short term reduced shareholder profits, and long term slower pharmaceutical research. However, it is not difficult to argue that if drug expenditures are too high, it ultimately comes down to paying the bills for over investment in research rather than the cost of production.