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Illinois governor signs law capping insulin costs at $100 per month
- sorrymate 7y agoBest line in the very short article “Health care is a right for all, not a privilege and that is why I am so proud that we created an insulin price cap that successfully puts patients above profit,” according to Gov. JB Pritzker.
- rogerkirkness 7y agoI am really anxious for the people that will lose their insulin because of this...
- datashow 7y agoIf it does happen, for some people, it proves the whole system is wrong, not their own ideology.
- profunctor 7y agoWhy would they?
- post_break 7y agoBecause the manufacturers can decide to stop selling insulin in Illinois completely.
- zentiggr 7y agoAnd as I said in another comment, let them make that decision... I would love to see them attempt to justify denying life saving medication in only one part of the country because money. Might just be the straw that would finally break their backs, and it's been too long coming.
- post_break 7y agoThere will be sacrificial lambs though. People will die because they can't drive out of state to get insulin. It might take a long time to force them to sell it at this cost, and they might win a lawsuit saying it's unenforceable, all while people die because of this legislation. Trust me, I don't like the companies doing this, but only passing the law setting a price ceiling without a secondary law requiring any company who was selling at the time the law was put in place to continue to sell is short sighted. Way too many situations where this ends up killing people.
- save_ferris 7y agoHow will people lose their insulin over this?
- StillBored 7y agoBecause, like some other drugs in the US, the drug manufactures will collude to create an artificial shortage?
- 7777fps 7y agoAt which point the government could produce more themselves. Why shouldn't governments own private industry if it still competes through the market?
- bmelton 7y agoJust responding to the "Why shouldn't governments" argument, but the obvious counter-response to that is that (at least in its current iteration) the government is pretty bad on slapping its own hand. We see this at the heart of the criminal justice system, and we see its ill effects. That is slowly starting to change, and I think for the better, but it's still pretty bad. In competitive space, what do we do when the government fails to check itself against anti-competitive behavior?
- jerf 7y agoIf you can only charge $100, but it costs $110, what happens isn't that it gets sold at $100 anyhow. What happens is that it doesn't get sold. Nobody has an obligation to manufacture insulin. I'm not saying the costs are $110. I don't know. I'm just explaining why this can result in lost insulin.
- ceejayoz 7y agoIt doesn't cost anywhere near $100 to produce a month's supply. https://www.vox.com/2019/4/3/18293950/why-is-insulin-so-expensive https://www.vox.com/2019/4/3/18293950/why-is-insulin-so-expe... > The US is a global outlier on money spent on the drug, representing only 15 percent of the global insulin market and generating almost half of the pharmaceutical industry’s insulin revenue. According to a recent study in JAMA Internal Medicine, in the 1990s Medicaid paid between $2.36 and $4.43 per unit of insulin; by 2014, those prices more than tripled, depending on the formulation.
- slowhand09 7y agoSo the next step is to nationalize the facility that manufactures it, the testing of it, the distribution of it. All taxpayers will pay for it. And the ubiquitous govt will have to compensate the drug companies for the taking of their intellectual property. Welcome to Venezuela.
- aplummer 7y agoSeriously what a ridiculous slippery slope argument, have you never been to another near identical democracy with a higher HDI than the USA? People don’t pay for insulin in any of them and yet, society functions just fine.
- toomuchtodo 7y agoInsulin is a generic. No one is required to be compensated. Pharma had their chance to be reasonable. That time has passed. Not to say that we shouldn’t appropriate intellectual property when necessary (eminent domain or not respecting a patent, as has happened in India and Canada), it’s just not necessary in this case. That doesn’t make us Venezuela, that makes us pragmatic.
- aplummer 7y agoThe inventor gave the patent away for $1 because it would have been unethical to profit from it. That’s still true.
- deleted 7y ago[deleted]
- AdrianB1 7y agoThere are different generations of insulin; the old ones are cheap, the latest ones are not. I would like to see every inventor give the patents away for free, it would be great in a way, I just don't know who will invent anything new because these days the marginal cost of improving products is astronomical. For example, building a log cabin 200 years ago was tiny, both in cost of raw materials and work. Now the cost of a house is huge, not only because different materials are used, more complex manufacturing processes are needed, but who wants to live in a log cabin? Same comparison with insulin, there is cheap insulin and expensive insulin, people want the expensive one to be cheap. Not always possible.
- efa 7y agoI hate the constant misuse of the word "right". How would a country guarantee this right? What if every doctor in the US quit tomorrow? What if I decided to live on the top of a mountain where there is no population? How does the government guarantee my right to healthcare? Rights are around restrictions. I have the right NOT to be killed. I have a right NOT to be silenced. When something requires someone else doing something and giving it to me - that can't be a right.
- creaghpatr 7y ago>How would a country guarantee this right? Via its taxpayers of course.
- efa 7y agoAnd if no is willing to provide the healthcare? Force them?
- delecti 7y agoWho's going to stop you from having your right not to be killed infringed upon? That requires just as much affirmative action from a society's justice system. Any of our rights only matter as much as society's agreement to help you defend them, and in this case the government of Illinois has agreed to defend this one.
- jwbwater 7y agoPeople not killing each other costs nothing. Cost is only incurred when the right to life is infringed. People providing healthcare to one another always has costs. If this "right" is infringed and no healthcare is provided then no cost is incurred. Whether or not healthcare is a right is a lot less important than whether or not it is affordable.
- jxramos 7y agoNegative rights seem to be those more amenable to guarantees since they ask little. The guarantee of positive rights assumes a bunch of prerequisites from what I understand (some of which like healthcare are predicated on a ton of upfront infrastructure and training and availability and so forth). https://en.wikipedia.org/wiki/Negative_and_positive_rights https://en.wikipedia.org/wiki/Negative_and_positive_rights
- XnoiVeX 7y agoIgnoring the right versus privilege debate, It's just humane to provide resonably priced access to a drug that was invented many decades ago the price of which was artificially kept high by abuse of the patent system. The R&D cost of which is certainly fully amortized by now.
- outlace 7y agoHas there ever been a price control experiment that hasn't resulted in even worse problems?
- ceejayoz 7y agoVirtually every other developed nations' healthcare systems?
- GuthL 7y agoLitterraly France.
- thrower123 7y agoThis is how you get a Napoleon https://en.wikipedia.org/wiki/General_Maximum https://en.wikipedia.org/wiki/General_Maximum
- gruez 7y agoOther developed countries have price controls (more specifically, government negotiated prices) and it seems to be working well for them.
- tenebrisalietum 7y agoThat's not really a price control, that's buyer control - collective bargaining reduces the number of buyers of X but not the amount of X demanded.
- snapetom 7y ago> government negotiated prices That's what we don't have in the US. You can certain make the case that we should, but that's a separate argument. Now we have a situation where we have a flat out price control, and it's going to have unintended consequences written all over it. All these arguments for "look at Europe" doesn't fly in health economics. There are not subtle differences in the US legally, infrastructurally, and culturally.
- Someone1234 7y agoI'm really past the whole "pharma need to charge high prices to fund research" line of argument. Aside from being factually untrue (research funding is dwarfed by marketing for example[0]), it is also arguing for a continued unhealthy relationship with pharmaceutical care. A large amount of research is currently publicly funded. Either via public academic research or directly. When that research bears fruit it is often given away almost at-cost (or below cost when you take into account the larger research landscape) to pharma companies who then privately profit off of it. Pharma companies are profiting off of your tax dollars and then turning around and profiting off of you too. Sure, the benefit exists, but this whole model is broken as all heck. We should just scarp for-profit pharma development as an industry, increase public funding of research, and drug production factories should be a modest profit venture (e.g. 20% of the wholesale cost). Looking more like the generics industry today, where they produce, they don't develop. Why do we need a private business to develop drugs at a 40%-1000%+[1] margin when the taxpayer could do it at nearly 0% margin? We've chosen to make it this way, other countries haven't, and we see plenty of drugs developed via public institutions around the world. [0] https://www.bbc.com/news/business-28212223 https://www.bbc.com/news/business-28212223 [1] https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/retail-margin-on-generic-drugs-may-be-as-high-as-1000-claims-study/articleshow/58252850.cms?from=mdr https://economictimes.indiatimes.com/industry/healthcare/bio...
- ikeboy 7y agoYou're looking at the wrong data. You need to look at return on capital. Right now the return on capital in pharma is below the cost of capital and it's trending towards zero. The inevitable result is significantly lower funding for research. https://endpts.com/pharmas-broken-business-model-an-industry-on-the-brink-of-terminal-decline/ https://endpts.com/pharmas-broken-business-model-an-industry...
- amluto 7y agoThis suggests that something is very wrong with the market. The costs of development and production (even ignoring failures) are way below revenue, which means that return on capital should be very positive. Somehow most of the money is going into overhead. One might debate whether the overhead constitutes corruption, but it should be able to be reduced.
- pjc50 7y agoHow likely is this to survive legal challenge?
- dopylitty 7y agoUltimately non profits or the government should produce insulin and other medicines to sell at cost. This sort of law will hopefully be a step in that direction.
- conanbatt 7y agoAnd who would decide what the cost is if the government makes it?
- sammycdubs 7y agoOk, now do all other generics that are cheap to manufacture.
- jibe 7y agoGeneric is already around $100, this is targeting non-generic, newer more effective insulin. If you force drug companies to sell their new inventions is the generic price, there will be no more new inventions.
- andrewla 7y agoI don't know why new outlets make the actual factual information for these things so difficult to find. Can't they include the bill number or link to the bill itself? The actual bill text is here [1] and the record leading up to its passage is here [2]. [1] http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=101-0625 http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name... [2] http://www.ilga.gov/legislation/BillStatus.asp?DocNum=667&GAID=15&DocTypeID=SB&LegId=116604&SessionID=108&GA=101 http://www.ilga.gov/legislation/BillStatus.asp?DocNum=667&GA...
- cjfd 7y agoIt may very well be quite true that the price of insulin is too high but price controls really are not that great. If the price now is to high, $100 probably still is too high. Also, in the more general case (not for insulin, obviously) pharma does need to recover its research costs and who is going to say what is a good price and what not. You know, capitalism actually kind of works and price controls just don't. There actually is a capitalist solution to the problem of high medicine prices. That is for pharma companies to have to post a price of their patents. And when somebody is willing to pay that price they do get the patent for exactly that price. After that you tax the value of the patents at a somewhat high percentage. This way, if the price of the medicine is to high relative to the posted value the state or perhaps the insurance companies could just buy the patent. On the other hand if the price of the patent is too high relative to the price of the medicine there is no real problem. In the case where both are too high but it is not the case that one is higher than the other the state should just funnel the money that comes in through the tax back to whoever needs to buy the medicine at a the high price.
- nappy-doo 7y agoexcept it doesn't in this case. Manufacturers keep the price artificially high by continually patenting more and more esoteric parts of the manufacturing of this drug. They then cross license the patents to each other, preventing any third party from joining the marketplace. Insulin is NOT rocket science, and it's necessary for some people to live. It's almost as simple to make as beer. It is unreasonable that people don't have access to such a simple life saving drug. Fuck the pharma companies. Fuck the patent system for keeping it this way. Congratulate the legislature who is tackling this problem.
- cjfd 7y agoYou know, dropping f bombs is not a very mature way to engage in discussion. I agree, though, that it should also become harder to get patents. If a useful invention depends on more than one or, at most, two patents the patents mainly serve as friction to innovation. A corrollary of this is that software patents should not exist. Perhaps there could also be a process where it is asserted that a medicine can only depend on one patent. Whenever it depends on more than one it should be adjudicated which of them is the innovative one and the other ones should not apply. This will solve the cross licensing problem that you notice.
- Proven 7y agoIf state-controlled healthcare wasn't a racket the cost wouldn't need to be capped. > “Health care is a right for all, not a privilege and that is why I am so proud that we created an insulin price cap that successfully puts patients above profit,” Healthcare isn't a right. If it was a natural right it wouldn't be necessary to force people to pay for it. One day inflation will strike and insulin will no longer be available at that price. Will he be proud then?
- andrewla 7y agoUnfortunately, this does not act as a price control. This just mandates that insurance companies cap the out-of-pocket expense; it does nothing to affect the retail or wholesale price of insulin except insofar as insurance companies can push back on drug manufacturers. Net effect of this is yet to be seen, since it doesn't go into effect until 2021, but one possibility is that insurance companies will only cover variants of insulin that are cheaper than the allowed maximum, or the value that they calculate allows maximum extraction of value. Or, alternatively, the price of insurance will rise to spread the cost among all covered people. The fundamental problem is that insulin should be a commodity, but it is not. Baseline human insulin is actually available fairly cheaply; ~$25 for a month's supply. But pharmaceutical companies have developed and sell a variety of faster-acting and longer-release insulin analogs of increasing price; and although many of them have technically fallen out of patent protection, generic makers have been slow on the uptake and manufacturers have done various tricks (relabeling, etc.) to ensure that they can maintain their effective monopoly. There's something deeper that is wrong here that is preventing the market from working as it should be working; that is, generic makers making fast-acting insulin cheaply and driving the price down to the marginal price of production.
- choward 7y agoYou're right. This is terrible. Here's an excerpt from the bill: > Provides that insurers that provide coverage for prescription insulin drugs must limit the total amount an insured is required to pay for a covered prescription insulin drug to $100 This will create way more problems than it solves. It continues to hide the true cost from the consumer. This doesn't affect the pharmaceutical companies or insurance companies at all. What it will due is just make the insurance companies charge everyone a little more. The corporations are not affected whatsoever.
- jngreenlee 7y agoWouldn't it be much more meaningful for the Sate of Illinois to say they will buy a State-managed insulin supply, for which they will guarantee access by State residents at $x/Month? Easy to make something unallowed on paper. Much harder, and more meaningful, with Skin in the Game, to actually go out and do what they may think their rules will accomplish.
- nybble41 7y agoThe media doesn't seem to be reporting the actual name or number of the bill, so I thought I'd save someone else the trouble of hunting down the full text: SB0667 - Illinois 101st General Assembly PRICING-PRESCRIPTION INSULIN http://www.ilga.gov/legislation/billstatus.asp?DocNum=0667&GAID=15&GA=101&DocTypeID=SB&LegID=116604&SessionID=108 http://www.ilga.gov/legislation/billstatus.asp?DocNum=0667&G...
- aaomidi 7y agoThis sounds great but I would've liked to see them: - Protect people without insurance. Usually they're the most vulnerable. - Don't just force someone to pay for the Insulin. These companies making them don't need to become richer. Take it from them forcefully.
- alexmingoia 7y agoPatents are the problem, not the market. Patents are government protectionism. They are a government imposed monopoly — a government imposed cap on supply. In a free society and a free market, anyone with the knowledge and means to produce insulins would be free to do that. The high prices are a direct result of the government preventing competition through patent law. Without patents, the price would tend to fall as companies compete on price, more efficient manufacturing, distribution, etc.
- deleted 7y ago[deleted]
- latinio_4_trump 7y agoHeadline should read "Illinois governor and legislative body do not understand basic economics." Prepare for insulin shortages IL. Government intervention / price fixing has NEVER worked.
- williamDafoe 7y agoJust like the neighborhood drug pusher, big pharma companies give away free samples. Turns out that in the case of opiates, your neighborhood drug dealer and big pharma coincide.
- defertoreptar 7y agoShouldn't this figure be tied to the CPI?
- mcrocop 7y agoGreat job. Now you'll have to figure out what to do when those making insulin decide to take those resources and allocate them to producing something far more profitable.
- cartercole 7y agoscreams in libertarian
- jessaustin 7y agoWow, Pritzker is on a roll. Legalizing pot, reviving horse racing, now defending diabetics. Why can't my state have a good governor? Do we need to send a bunch of former governors to prison first? I'm willing to do that! Heck, I think most people would be fine with Greitens in prison...
- jwbwater 7y agoDo you want our drastically under funded state pension system too? Illinois wants revenue anyway it can it, selling pot, gambling, whatever. What's wrong with Missouri?
- jessaustin 7y agoYou can't really blame an underfunded pension system on somebody who has been governor for a year. Illinois pensions are like many municipal pensions: they were unreasonable the day they were negotiated, and have only grown less reasonable over the many decades since. There are lots of things wrong with Missouri. Our justice system is brutal to poor people and basically corrupt. Still, our cities are quite violent relative to other cities in USA. The "Department of Natural Resources" has rules to protect the environment, but very few of them are ever enforced against those who are willing to ignore them. (The one time I followed this trail all the way down the rabbit hole, the "Chief of Compliance and Enforcement" claimed that the courts always overrule him when he does choose to do his job, so this issue could be related to the first.) Important infrastructure is allowed to deteriorate while vanity projects get top priority. As a state, we'll vote for Trump again later this year, even though it's clear at this point that his previous anti-war rhetoric was nothing but lies. And so on...
- vasilipupkin 7y agoeveryone tearing their hair out over this: the effect of the law is just that insurance overall will be somewhat more expensive in Illinois. There won't be any effect on research or innovation or anything else. Everyone will have to chip in a bit to make sure people with diabetes don't go without insulin. I don't see this is as a big disaster. Illinois has much bigger problems than this. If people foregoing insulin because of out of pocket cost is a problem in Illinois, fixing it could have positive effects, including positive fiscal effects. So net cost is probably quite small.
- vmchale 7y ago> Everyone will have to chip in a bit to make sure people with diabetes don't go without insulin. Would be nice if there were actual price controls at the federal level.
- vasilipupkin 7y agowhy? this is better. Every state can do whatever it wants. What's wrong with that? why have one size fits all solutions?
- marriedWpt 7y agoThis will either increase the price of insurance or cause people to take monthly trips to neighboring states. Price ceilings don't work, I don't quite understand how people are elected when they don't understand high school level government/economics.
- egdod 7y agoThat can’t be right. > “Health care is a right for all, not a privilege“ Insurance has to be free too!
- justinzollars 7y agoI think this is a naive approach. We could price cap anything. Homes in San Francisco for example. The result will be rationing and shortages. It won't solve the fundamental problem. They key to bringing prices down is to remove barriers of entry. We need to flood the market with more insulin, or with my SF housing example flood the market with many more houses.
- rjmunro 7y agoThis isn't that sort of price cap, as far as I can see. It's a law for insurance companies saying that if you want to insure people in this state, you must cover the cost of insulin from your general insurance pool, not from the individuals who need it (except for the first $100 / month).
- vmchale 7y ago> They key to bringing prices down is to remove barriers of entry. [sic] Or just set price controls
- AJ007 7y ago* to bring advertised prices down. Those may be superseded by black market prices or augmented with lines and waiting lists.
- honksillet 7y agoComing soon to Illinois, insulin shortages.
- jobseeker990 7y agowhy isn't there a generic for insulin?
- egdod 7y ago> “Health care is a right for all, not a privilege“ In that case, charging people even $100 a month is unconscionable. It needs to be free, just like food, housing, entertainment, and all the other inalienable rights.
- Zenst 7y agoEven at that level, it's a markup that even Apple has never come close too. Yes, this is a start, but it is the back of the field and has a long way to go. Sadly it won't be until 2030 when that happens, which AFAIK is when patents expire. https://www.businessinsider.com/insulin-prices-could-be-much-lower-and-drug-makers-would-still-make-healthy-profits-2018-9?r=US&IR=T https://www.businessinsider.com/insulin-prices-could-be-much...
- deleted 7y ago[deleted]
- pcvarmint 7y agoExpect shortages to occur during periods of high demand.
- csense 7y agoIs it possible that drug companies will all decide to stop selling insulin in Illinois as a result of this, forcing every diabetic to travel to another state every time they need an insulin refill?