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If I were an insurance company, I'd consider buying a small pharma outfit and target it at these orphan drugs just to save money. Here is why you'd rethink tha
by btilly 7y ago
If I were an insurance company, I'd consider buying a small pharma outfit and target it at these orphan drugs just to save money.
Here is why you'd rethink that position.
By law, insurance companies have to spend 80-85% of their revenue on patient care. Which means that their potential profits are limited by medical expenses paid out. As long as they have properly projected and accounted for the medical expenses in their business model, they therefore have a financial incentive to let expenses be high.
- kurthr 7y agoYes, insurance companies are not on your side. They want all prices to rise so their competitors pay the same... and we wonder why there is price fixing?
- JamesBarney 7y agoBut then their rates wouldn't be competitive and people would switch insurance.
- burnte 7y agoThe pharma company is a standalone subsidiary, the insurance company is the only customer. The profits they keep go to the shareholders, bypassing the 85% rule.
- BurningFrog 7y agoThat might be a decent argument for another discussion. Spending $43,354 for something and getting a $30 copay in return will never be a part of any clever scheme to fleece anyone.