8 ms·

That $56,000 Drug? Blame Medicare

78 points by prostoalex 5y ago

achow 5y ago
https://archive.is/eZYo3 https://archive.is/eZYo3
icehawk 5y ago
> What price might you charge if the major purchaser for your drug has committed to pay whatever “other customers” pay? Biogen, the drug’s manufacturer, came up with a price of $56,000 per year. So then I should be blaming the people setting the high price, as they're choosing to do this.
- hanniabu 5y ago
  Yeah such garbage logic, the company is clearly exploiting here
  - connicpu 5y ago
    Because the rules set forth by the law have created an incentive to set the price that maximizes their profit. They have a customer who has to buy their product no matter what, and as a corporation beholden to shareholders they have a legal duty to maximize returns. I agree that it's a terrible system that incentivizes corporations into exploitative practices, but we can't really do anything about it without changing the rules they have to operate under.
    - kelnos 5y ago
      Just because someone is incentivized to do something, it doesn't mean they're absolved of all responsibility or blame when they do that thing.
      - Gimpei 5y ago
        Of course it doesn't. But a lot of the time, those people will not care whether you blame them or not. They'll just keep doing it. If there's a loophole, some unscrupulous person or company will always exploit it. Go ahead and blame them. When you've gotten that out of your system, change the law.
    - Grimm1 5y ago
      That's a misunderstanding that I see a lot, they do not have a legal duty to maximize returns to shareholders. Not the source I usually use for this but, https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
      - bpodgursky 5y ago
        I mean, you could give lectures and try to convince the CEOs to give up free money, or you could set up a system of rules that actually incentivizes reasonable drug prices. I can tell you which is going to work better.
    - Hokusai 5y ago
      > and as a corporation beholden to shareholders they have a legal duty to maximize returns I never understood this point. If there is a legal requirement to maximize profit, CEOs should be legally required to have low compensations so as to maximize profit. But that is not the case. Why "maximize profit" does not apply to wasteful hyper paid CEOs? Worse even. Most companies reduce profits by moving them to other countries with lower taxes. Would not that be against the law?
    - hellbannedguy 5y ago
      We all, including politicians, threw their hands up when Skirelli got greedy. SEC went after him for show. Not one law was enacted to prevent another greedy entity from doing the same thing. (I don't even blame the guy. Everything he did with that drug was legal. I do blame politicians whom did nothing to stop the greed afterwards. I really think most of these old coots on both sides actually believe totally free market medicine will save them one day from old age.)
    - triceratops 5y ago
      > they have a legal duty to maximize returns They have a fiduciary duty to shareholders. That just means they have to act honestly, fairly, and always in the best interest of the shareholders. That's not at all the same thing as a duty to "maximize returns".
- dcolkitt 5y ago
  Most corporate entities have a fiduciary duty to maximize their shareholders’ returns. If your solution to a problem is “companies just need to stop trying to make money”, then you’re probably going to be disappointed.
  - icehawk 5y ago
    Do they really though? https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to-maximize-profits-939ae50d0572 https://medium.com/bull-market/there-is-no-effective-fiducia...
  - foo_barrio 5y ago
    The board dictates what the company does and share holders can vote the board out if they don't like what they are doing no? Most boards are interested only in money but that reflects the share holders and board more than some sacred pursuit of corps.
    - dcolkitt 5y ago
      Public companies that don’t maximize profits will usually be targeted by activists who will replace the board and management with people who will max profits. Say a company exists that doesn’t aggressively pursue profits. It makes $1/year and is worth $10 per share. If it started maxing profits it could make $2/year and be worth $20/share. An activist can come in and continue to pay well above market price, knowing that once he acquires enough shares, he’ll replace the board and raise the value of the shares. The simple logic is that almost every public company will eventually evolve to maximize profit regardless of what other social mission they advertise. The sole exception is if a founder retains control of a very large proportion of voting stock.
- s1artibartfast 5y ago
  If you don't like a price of the product doesn't work, the best remedy is to not buy it. We need to change policy so Medicare doesn't have to buy it. This would fix the problem many drugs, not one.
Causality1 5y ago
Company hires lobbyists to ensure Medicare isn't allowed to negotiate drug prices, then convinces the public it's Medicare's fault. I can't believe we're still falling for this shit.
- AndrewBissell 5y ago
  "Blame Medicare." No, no I don't think I will. Most shameless propaganda headline since "Don't blame Blackrock for the housing crisis, blame your neighbors."
  - Dracophoenix 5y ago
    I don't see how that last statement isn't true. Blackrock isn't putting guns to people's heads nor is it abusing eminent domain to get these houses.
    - AndrewBissell 5y ago
      Yes, let's just pretend that the whole context in which they're operating is entirely dependent of their lobbying efforts, connections to the government and Federal Reserve, etc
      - Dracophoenix 5y ago
        How do those factors affect the seller's due diligence? I'll agree with the potential conflict of interest, but conflict of interest on its own doesn't stop anyone else from buying homes for their own purposes, even those among the highest levels of government. Unless such a sale is accomplished through an abuse of eminent domain or fraudulent representation, any transactions ought to be between buyer, seller, and contractually relevant parties. And as side note, lobbying is not a bad word. Anyone who vouches for, or on behalf of one's interests before government is a lobbyist by definition. That goes for John Q Public as much as it does for Blackrock.
- throw123123123 5y ago
  I truly don't understand this reasoning. If lobbyists buy politicians, the sell out are the politicians, and then healthcare administration must be taken away from government..
observer40 5y ago
Something like a $56,000/per year drug really makes me wonder if the answer "violence is never acceptable" just exists to milk docile people.
thatfrenchguy 5y ago
In other countries, the cost/benefits analysis would be done and you'd just not get the drug until it's cheaper. In the US, healthcare is addicted to new technologies even if they improve outcomes by 0.01% while being 10x more expensive.
- roywiggins 5y ago
  Even if they don't improve outcomes at all. https://www.nytimes.com/2021/07/19/health/alzheimers-drug-aduhelm-fda.html https://www.nytimes.com/2021/07/19/health/alzheimers-drug-ad...
- TheDong 5y ago
  The statistics do not show that we improve outcomes even though we spend more. Almost every metric for the quality of healthcare outcomes in the US is worse than most european countries. For example, if you sort the under 5 mortality rate [0], you'll see that the United States comes in 47th, after Cuba, Russia, Qatar, and basically all of western europe. If you check life expectancy, you'll find similar subpar numbers. Ditto for infant mortality. You can easily argue that life expectancy is partly lifestyle based (the fast food industry killing us rather than healthcare), but for infant mortality and under-5 mortality, those numbers should track quite well with the quality of our medical system I think. And those numbers, well, our medical system is obviously doing quite poorly compared to other countries that spend far less. [0]: https://en.wikipedia.org/wiki/List_of_countries_by_infant_and_under-five_mortality_rates https://en.wikipedia.org/wiki/List_of_countries_by_infant_an...
refurb 5y ago
Umm.. Medicare already announced they are doing a National Coverage Determination (NCD) to determine if they will pay for it and for whom. And yes, Medicare can negotiate drug prices through Part D or take discounts by fiat through Part B.
- pcurve 5y ago
  Are you sure Medicare negotiating drug price through Part D? I know the bill has been out there forever, but it's far from being enacted. https://www.congress.gov/bill/117th-congress/house-bill/3 https://www.congress.gov/bill/117th-congress/house-bill/3
  - refurb 5y ago
    Part D drugs are administered through private insurers and they do negotiate on drug prices, then compete for patients with lower premiums.
newbie789 5y ago
> Medicare bases its payments for physician-administered drugs on their average private market price. Medicare is driving up prices by… paying market rate? This reasoning seems to imply that Medicare somehow has the ability to time travel backwards and influence the choices of drug companies and private insurance to inflate prices which they then agree to pay. It literally implies that Medicare reacting to private market is exactly the same thing as controlling the private market. This strikes me as completely incomprehensible at best and a nakedly bad faith attack on Medicare at worst
- teruakohatu 5y ago
  I am not an American but I think you have it back to front. It seems because they know the biggest customer (medicare) will have to pay what smaller customers pay, they simply charge huge amounts to the smaller customers. From an economics perspective the demand curve is inelastic. Medicare will pay whatever the price is as long as there is one other buyer paying that price.
- asdfaoeu 5y ago
  Of course drug companies consider the buyers of their product when setting prices. I also don't think the article is suggesting abolishing Medicare just changing it's process to buying drugs.
andy_ppp 5y ago
The NHS manages to negotiate some of the best drug prices in the world. I bet drug companies just love the opposite of Medicare and nationalised health. As I understand it other countries have an agency that stops drugs coming into the market if their cost doesn’t justify their improvement in outcomes. America just lets all drugs that are safe come onto the market at any price. https://www.vox.com/platform/amp/science-and-health/2016/11/30/12945756/prescription-drug-prices-explained https://www.vox.com/platform/amp/science-and-health/2016/11/...
- rswail 5y ago
  Australia allows drugs on the market if they pass the TGA (our FDA) approval process. Our PBS, the Pharmaceutical Benefits Scheme, which subsidizes drugs, is similar to the UK's NICE, which evaluates drugs to compare their price to the effectiveness in terms of QALY (Quality Adjusted Life Years) and other metrics. The PBS then negotiates with the drug manufacturer, who either meet the government's price, or don't. If they don't, then the drug is not subsidized. So it's in the manufacturer's interest to get a large purchaser to buy the drug.
throwawaysea 5y ago
> the exorbitant cost of drugs that need to be administered by physicians Can someone with more familiarity explain why some drugs need to be “administered by physicians”? Why can’t patients self administer or why can’t a less expensive job role be imagined for a simple 5 minute visit for drugs administered in an outpatient setting? Also, for regular drugs and prescriptions, why are doctors involved at all and why does the FDA regulate access to them, creating time and cost barriers? I feel like much of the time, my physician or a physician’s assistant aren’t providing any useful diagnosis or guidance toward a prescription that I couldn’t have figured out myself. The gatekeeping almost always is frustrating because I get no value out of them. I’m especially annoyed since some of the drugs I’ve been prescribed aren’t even controlled in the EU but are in the US.
- pigeonhole123 5y ago
  How can doctors in the US afford helicopters and yachts?
  - liketochill 5y ago
    How can data scientists and devops engineers afford real estate in California and early retirement?
- 1123581321 5y ago
  Theoretically requiring a physician acts as a check against misuse of the medicine or allows for more control over reactions to the medication. There are drugs that would likely not be approved without some restriction on administration.
- least 5y ago
  > Can someone with more familiarity explain why some drugs need to be “administered by physicians”? There is no need, this is purely regulatory capture at work. > Why can’t patients self administer Probably because it's expensive to make and the potential for abuse is very high. > why can’t a less expensive job role be imagined for a simple 5 minute visit for drugs administered in an outpatient setting? We do have a "less expensive" job role. There are nurse practitioners who could be doing the vast majority of work that we have doctors doing right now with significantly less training with basically no downsides other than to doctors, whose value would plummet. Granted, doctors in the United States are probably way overcompensated as a result of the regulations in place. In Great Britain, being a physician isn't nearly as lucrative (though it's also less time consuming/expensive to become one). > Also, for regular drugs and prescriptions, why are doctors involved at all and why does the FDA regulate access to them, creating time and cost barriers? Probably to prevent public health crises like the opium epidemic, though, you'll notice, this happened despite the best efforts of the government to prevent it. Gating access to drugs is largely to prevent abuse, though maybe there should be reform with regards to how we control access to these. Should I need to go to a doctor or could I just get a recommendation from a Pharmacist? Maybe we could designate a class of drugs acceptable for Nurse practitioners to prescribe. Maybe most drugs should just be available over the counter? The way we categorize drugs is probably too restrictive, though it isn't the primary reason drug prices are driven up. > I feel like much of the time, my physician or a physician’s assistant aren’t providing any useful diagnosis or guidance toward a prescription that I couldn’t have figured out myself. The gatekeeping almost always is frustrating because I get no value out of them. Any time a doctor comes to a different conclusion from me, despite me knowing my own body better than she does and doing plenty of my own research, obviously I'm going to be frustrated. I might even be right. But that doesn't mean that I'm generally going to be right more often than they are. I think you're probably overestimating your own abilities while discrediting the capabilities of your doctors here because doctors don't always do what you want.
michaelgrafl 5y ago
Can someone explain to me why I should care about drug prices when they're covered by medicare (as a private person and an American, which I am not, thus asking). As an Austrian I don't know what my meds cost. I pay a flat fee of 6 Euros per package at the drugstore if I have a prescription. And I can't get my main ones without one.
- ffjfjfjf788aa 5y ago
  Because you pay one way or another, via taxes in Austria, or via insurance deductions in other countries, or sometimes a combination of both. With the tax route their is also austerity, we won't buy that park for children cos paying for a single customer of biogen for twelve months has removed that opportunity (these decisions are obviously at aggregate scale). Tldr you pay way more than six euros unless it's just a nonpatent generic antibiotic or fever medicine
- pcurve 5y ago
  Because someone still has to pay for the drugs through tax and/or subsidized through paycheck (if you have private insurance). You might pay 6 euros per package, but that could be a 50 euro drug. The 44 euro difference is being made up through your nationalized healthcare. If by and large, most of the drugs are reasonably priced, then a flat fee structure of 6 euros is possible, because it's small enough sum that it could easily be paid by other people who is paying into the pool, but not using the healthcare service. In fact, up until 15-20 years ago, it was common for American health plans to have flat fee of $5-$10 for most drugs. That went straight out the window with emergence of more expensive medications that costs tens of thousands of dollars per patient per year, which completely skewed the average price of medications, and flat fee of $5-10 became unsustainable. Nowadays, $25-30 is the norm depending on your plan, and if your plan covers it. $50-100 is common if you insist on taking medications for which there are cheaper alternatives.
1vuio0pswjnm7 5y ago
Within biopharma, certain therapeutics have no hope of being sufficiently successful without Medicare. (The American taxpayer subsidises sales to support the massive expected profits.1) It is part of the marketing strategy, and thus the drug delivery strategy, that these drugs be eligible for Medicare. For example, let's say the drug is to be administered by the patient at home, unlike the drug in the article. The drug delivery strategy would be a system that qualifies for coverage under Part B. Medicare coverage is essential. 1 Personal opinion: This may be a recurring pattern we can see in other industries, too. Look for a situation where the customer cannot afford the product so the seller relies on the government, i.e., the taxpayer, to help the customer pay. One recent example is the steady rise in university tuition, student lending and now the student debt crisis.
lsiq 5y ago
This headline is exhibit A of how the NYT is our Pravda, the propaganda arm for the .0001%.
- diamond559 5y ago
  This is an opinion piece, not the views of the editors. They also have many opinions pieces in favor of universal healthcare and other ways to lower drug prices besides abolishing Medicare if you do some googling.
  - Bilal_io 5y ago
    I am reading the article using the NYT android app, and "opinion" is not mentioned anywhere, I copied the url and checked it on a browser, there is no opinion tag, and the url had no /opinion/ segment. So, I don't think this one is an opinion piece.
    - diamond559 5y ago
      It's some column they're calling "Economic Views" with the description saying it's "A column that explores life through an economic lens with leading economists and writers." They probably should put that it's an opinion on the top of the article just to be clear upfront.
nsonha 5y ago
I'm actually not as mad about them blaming medicare, as much as I'am mad about them blaming something that isn't the cause of the problem (UK, Canada, Australia, hello?) this is to distract people from the real cause (deregulation), so that the problem stays.
pcurve 5y ago
Click-bait headline. It doesn't say Medicare has decided to cover it yet, it's under review. And only some privately administered Medicare plans have decided to cover it. Some hospital systems are doubting the efficacy and refuse to administer it. No doubt, it's a huge market. But the fact that it's a monthly infusion makes it a tough proposition. Sovaldi was a miracle drug, priced like a Bentley. This drug is no miracle drug, but they priced it like one.
popileviz 5y ago
You have to be extra gullible to fall for this
vmception 5y ago
Genuine question: if drug pricing was altered resulting in much lower prices, would the same research and development still occur? Would people be willing to pool capital to pursue FDA approval? Would other countries still get low prices? This isn't an argument for anything so I don't need rhetorical unrelated comparisons, I’m wondering if this has been evaluated and studied, or maybe if there were case studies from prior time periods or other countries
m0zg 5y ago
Blame the complete and total lack of any competition as well. To this day hospitals often outright refuse to quote the pricing of treatments and drugs, drugs can't be re-imported from cheaper locales (such as India or even Canada), and if one happens to be uninsured, hospital prices are truly eye watering even though you're paying cash, and hospital would not get anywhere near as much if you went through insurance. One would hope the _realistic_ solutions to all of this are blindingly obvious, and yet... Big Pharma is so deeply entrenched that Trump couldn't even make any headway with "favored nations" domestic pricing that he proposed. It makes sense: I, a freelancer, for instance, can't charge my larger clients more because of such a clause. And whatever drugs he did make cheaper (insulin, epi pens), Biden restored the pricing on almost immediately after taking office. Read the fact checks, they bury this particular lede really, really well, so you'll have to read very carefully, much like I used to read Pravda when I was a kid in the USSR.

78 points by prostoalex 5y ago

https://archive.is/eZYo3 https://archive.is/eZYo3

> What price might you charge if the major purchaser for your drug has committed to pay whatever “other customers” pay? Biogen, the drug’s manufacturer, came up with a price of $56,000 per year. So then I should be blaming the people setting the high price, as they're choosing to do this.

hanniabu 5y ago
Yeah such garbage logic, the company is clearly exploiting here
- connicpu 5y ago
  Because the rules set forth by the law have created an incentive to set the price that maximizes their profit. They have a customer who has to buy their product no matter what, and as a corporation beholden to shareholders they have a legal duty to maximize returns. I agree that it's a terrible system that incentivizes corporations into exploitative practices, but we can't really do anything about it without changing the rules they have to operate under.
  - kelnos 5y ago
    Just because someone is incentivized to do something, it doesn't mean they're absolved of all responsibility or blame when they do that thing.
    - Gimpei 5y ago
      Of course it doesn't. But a lot of the time, those people will not care whether you blame them or not. They'll just keep doing it. If there's a loophole, some unscrupulous person or company will always exploit it. Go ahead and blame them. When you've gotten that out of your system, change the law.
  - Grimm1 5y ago
    That's a misunderstanding that I see a lot, they do not have a legal duty to maximize returns to shareholders. Not the source I usually use for this but, https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
    - bpodgursky 5y ago
      I mean, you could give lectures and try to convince the CEOs to give up free money, or you could set up a system of rules that actually incentivizes reasonable drug prices. I can tell you which is going to work better.
  - Hokusai 5y ago
    > and as a corporation beholden to shareholders they have a legal duty to maximize returns I never understood this point. If there is a legal requirement to maximize profit, CEOs should be legally required to have low compensations so as to maximize profit. But that is not the case. Why "maximize profit" does not apply to wasteful hyper paid CEOs? Worse even. Most companies reduce profits by moving them to other countries with lower taxes. Would not that be against the law?
  - hellbannedguy 5y ago
    We all, including politicians, threw their hands up when Skirelli got greedy. SEC went after him for show. Not one law was enacted to prevent another greedy entity from doing the same thing. (I don't even blame the guy. Everything he did with that drug was legal. I do blame politicians whom did nothing to stop the greed afterwards. I really think most of these old coots on both sides actually believe totally free market medicine will save them one day from old age.)
  - triceratops 5y ago
    > they have a legal duty to maximize returns They have a fiduciary duty to shareholders. That just means they have to act honestly, fairly, and always in the best interest of the shareholders. That's not at all the same thing as a duty to "maximize returns".
dcolkitt 5y ago
Most corporate entities have a fiduciary duty to maximize their shareholders’ returns. If your solution to a problem is “companies just need to stop trying to make money”, then you’re probably going to be disappointed.
- icehawk 5y ago
  Do they really though? https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to-maximize-profits-939ae50d0572 https://medium.com/bull-market/there-is-no-effective-fiducia...
- foo_barrio 5y ago
  The board dictates what the company does and share holders can vote the board out if they don't like what they are doing no? Most boards are interested only in money but that reflects the share holders and board more than some sacred pursuit of corps.
  - dcolkitt 5y ago
    Public companies that don’t maximize profits will usually be targeted by activists who will replace the board and management with people who will max profits. Say a company exists that doesn’t aggressively pursue profits. It makes $1/year and is worth $10 per share. If it started maxing profits it could make $2/year and be worth $20/share. An activist can come in and continue to pay well above market price, knowing that once he acquires enough shares, he’ll replace the board and raise the value of the shares. The simple logic is that almost every public company will eventually evolve to maximize profit regardless of what other social mission they advertise. The sole exception is if a founder retains control of a very large proportion of voting stock.
s1artibartfast 5y ago
If you don't like a price of the product doesn't work, the best remedy is to not buy it. We need to change policy so Medicare doesn't have to buy it. This would fix the problem many drugs, not one.

Causality1 5y ago

Company hires lobbyists to ensure Medicare isn't allowed to negotiate drug prices, then convinces the public it's Medicare's fault. I can't believe we're still falling for this shit.

AndrewBissell 5y ago
"Blame Medicare." No, no I don't think I will. Most shameless propaganda headline since "Don't blame Blackrock for the housing crisis, blame your neighbors."
- Dracophoenix 5y ago
  I don't see how that last statement isn't true. Blackrock isn't putting guns to people's heads nor is it abusing eminent domain to get these houses.
  - AndrewBissell 5y ago
    Yes, let's just pretend that the whole context in which they're operating is entirely dependent of their lobbying efforts, connections to the government and Federal Reserve, etc
    - Dracophoenix 5y ago
      How do those factors affect the seller's due diligence? I'll agree with the potential conflict of interest, but conflict of interest on its own doesn't stop anyone else from buying homes for their own purposes, even those among the highest levels of government. Unless such a sale is accomplished through an abuse of eminent domain or fraudulent representation, any transactions ought to be between buyer, seller, and contractually relevant parties. And as side note, lobbying is not a bad word. Anyone who vouches for, or on behalf of one's interests before government is a lobbyist by definition. That goes for John Q Public as much as it does for Blackrock.
throw123123123 5y ago
I truly don't understand this reasoning. If lobbyists buy politicians, the sell out are the politicians, and then healthcare administration must be taken away from government..

observer40 5y ago

Something like a $56,000/per year drug really makes me wonder if the answer "violence is never acceptable" just exists to milk docile people.

thatfrenchguy 5y ago

In other countries, the cost/benefits analysis would be done and you'd just not get the drug until it's cheaper. In the US, healthcare is addicted to new technologies even if they improve outcomes by 0.01% while being 10x more expensive.

roywiggins 5y ago
Even if they don't improve outcomes at all. https://www.nytimes.com/2021/07/19/health/alzheimers-drug-aduhelm-fda.html https://www.nytimes.com/2021/07/19/health/alzheimers-drug-ad...
TheDong 5y ago
The statistics do not show that we improve outcomes even though we spend more. Almost every metric for the quality of healthcare outcomes in the US is worse than most european countries. For example, if you sort the under 5 mortality rate [0], you'll see that the United States comes in 47th, after Cuba, Russia, Qatar, and basically all of western europe. If you check life expectancy, you'll find similar subpar numbers. Ditto for infant mortality. You can easily argue that life expectancy is partly lifestyle based (the fast food industry killing us rather than healthcare), but for infant mortality and under-5 mortality, those numbers should track quite well with the quality of our medical system I think. And those numbers, well, our medical system is obviously doing quite poorly compared to other countries that spend far less. [0]: https://en.wikipedia.org/wiki/List_of_countries_by_infant_and_under-five_mortality_rates https://en.wikipedia.org/wiki/List_of_countries_by_infant_an...

refurb 5y ago

Umm.. Medicare already announced they are doing a National Coverage Determination (NCD) to determine if they will pay for it and for whom. And yes, Medicare can negotiate drug prices through Part D or take discounts by fiat through Part B.

pcurve 5y ago
Are you sure Medicare negotiating drug price through Part D? I know the bill has been out there forever, but it's far from being enacted. https://www.congress.gov/bill/117th-congress/house-bill/3 https://www.congress.gov/bill/117th-congress/house-bill/3
- refurb 5y ago
  Part D drugs are administered through private insurers and they do negotiate on drug prices, then compete for patients with lower premiums.

newbie789 5y ago

> Medicare bases its payments for physician-administered drugs on their average private market price. Medicare is driving up prices by… paying market rate? This reasoning seems to imply that Medicare somehow has the ability to time travel backwards and influence the choices of drug companies and private insurance to inflate prices which they then agree to pay. It literally implies that Medicare reacting to private market is exactly the same thing as controlling the private market. This strikes me as completely incomprehensible at best and a nakedly bad faith attack on Medicare at worst

teruakohatu 5y ago
I am not an American but I think you have it back to front. It seems because they know the biggest customer (medicare) will have to pay what smaller customers pay, they simply charge huge amounts to the smaller customers. From an economics perspective the demand curve is inelastic. Medicare will pay whatever the price is as long as there is one other buyer paying that price.
asdfaoeu 5y ago
Of course drug companies consider the buyers of their product when setting prices. I also don't think the article is suggesting abolishing Medicare just changing it's process to buying drugs.

andy_ppp 5y ago

The NHS manages to negotiate some of the best drug prices in the world. I bet drug companies just love the opposite of Medicare and nationalised health. As I understand it other countries have an agency that stops drugs coming into the market if their cost doesn’t justify their improvement in outcomes. America just lets all drugs that are safe come onto the market at any price. https://www.vox.com/platform/amp/science-and-health/2016/11/30/12945756/prescription-drug-prices-explained https://www.vox.com/platform/amp/science-and-health/2016/11/...

rswail 5y ago
Australia allows drugs on the market if they pass the TGA (our FDA) approval process. Our PBS, the Pharmaceutical Benefits Scheme, which subsidizes drugs, is similar to the UK's NICE, which evaluates drugs to compare their price to the effectiveness in terms of QALY (Quality Adjusted Life Years) and other metrics. The PBS then negotiates with the drug manufacturer, who either meet the government's price, or don't. If they don't, then the drug is not subsidized. So it's in the manufacturer's interest to get a large purchaser to buy the drug.

throwawaysea 5y ago

> the exorbitant cost of drugs that need to be administered by physicians Can someone with more familiarity explain why some drugs need to be “administered by physicians”? Why can’t patients self administer or why can’t a less expensive job role be imagined for a simple 5 minute visit for drugs administered in an outpatient setting? Also, for regular drugs and prescriptions, why are doctors involved at all and why does the FDA regulate access to them, creating time and cost barriers? I feel like much of the time, my physician or a physician’s assistant aren’t providing any useful diagnosis or guidance toward a prescription that I couldn’t have figured out myself. The gatekeeping almost always is frustrating because I get no value out of them. I’m especially annoyed since some of the drugs I’ve been prescribed aren’t even controlled in the EU but are in the US.

pigeonhole123 5y ago
How can doctors in the US afford helicopters and yachts?
- liketochill 5y ago
  How can data scientists and devops engineers afford real estate in California and early retirement?
1123581321 5y ago
Theoretically requiring a physician acts as a check against misuse of the medicine or allows for more control over reactions to the medication. There are drugs that would likely not be approved without some restriction on administration.
least 5y ago
> Can someone with more familiarity explain why some drugs need to be “administered by physicians”? There is no need, this is purely regulatory capture at work. > Why can’t patients self administer Probably because it's expensive to make and the potential for abuse is very high. > why can’t a less expensive job role be imagined for a simple 5 minute visit for drugs administered in an outpatient setting? We do have a "less expensive" job role. There are nurse practitioners who could be doing the vast majority of work that we have doctors doing right now with significantly less training with basically no downsides other than to doctors, whose value would plummet. Granted, doctors in the United States are probably way overcompensated as a result of the regulations in place. In Great Britain, being a physician isn't nearly as lucrative (though it's also less time consuming/expensive to become one). > Also, for regular drugs and prescriptions, why are doctors involved at all and why does the FDA regulate access to them, creating time and cost barriers? Probably to prevent public health crises like the opium epidemic, though, you'll notice, this happened despite the best efforts of the government to prevent it. Gating access to drugs is largely to prevent abuse, though maybe there should be reform with regards to how we control access to these. Should I need to go to a doctor or could I just get a recommendation from a Pharmacist? Maybe we could designate a class of drugs acceptable for Nurse practitioners to prescribe. Maybe most drugs should just be available over the counter? The way we categorize drugs is probably too restrictive, though it isn't the primary reason drug prices are driven up. > I feel like much of the time, my physician or a physician’s assistant aren’t providing any useful diagnosis or guidance toward a prescription that I couldn’t have figured out myself. The gatekeeping almost always is frustrating because I get no value out of them. Any time a doctor comes to a different conclusion from me, despite me knowing my own body better than she does and doing plenty of my own research, obviously I'm going to be frustrated. I might even be right. But that doesn't mean that I'm generally going to be right more often than they are. I think you're probably overestimating your own abilities while discrediting the capabilities of your doctors here because doctors don't always do what you want.

michaelgrafl 5y ago

Can someone explain to me why I should care about drug prices when they're covered by medicare (as a private person and an American, which I am not, thus asking). As an Austrian I don't know what my meds cost. I pay a flat fee of 6 Euros per package at the drugstore if I have a prescription. And I can't get my main ones without one.

ffjfjfjf788aa 5y ago
Because you pay one way or another, via taxes in Austria, or via insurance deductions in other countries, or sometimes a combination of both. With the tax route their is also austerity, we won't buy that park for children cos paying for a single customer of biogen for twelve months has removed that opportunity (these decisions are obviously at aggregate scale). Tldr you pay way more than six euros unless it's just a nonpatent generic antibiotic or fever medicine
pcurve 5y ago
Because someone still has to pay for the drugs through tax and/or subsidized through paycheck (if you have private insurance). You might pay 6 euros per package, but that could be a 50 euro drug. The 44 euro difference is being made up through your nationalized healthcare. If by and large, most of the drugs are reasonably priced, then a flat fee structure of 6 euros is possible, because it's small enough sum that it could easily be paid by other people who is paying into the pool, but not using the healthcare service. In fact, up until 15-20 years ago, it was common for American health plans to have flat fee of $5-$10 for most drugs. That went straight out the window with emergence of more expensive medications that costs tens of thousands of dollars per patient per year, which completely skewed the average price of medications, and flat fee of $5-10 became unsustainable. Nowadays, $25-30 is the norm depending on your plan, and if your plan covers it. $50-100 is common if you insist on taking medications for which there are cheaper alternatives.

1vuio0pswjnm7 5y ago

Within biopharma, certain therapeutics have no hope of being sufficiently successful without Medicare. (The American taxpayer subsidises sales to support the massive expected profits.1) It is part of the marketing strategy, and thus the drug delivery strategy, that these drugs be eligible for Medicare. For example, let's say the drug is to be administered by the patient at home, unlike the drug in the article. The drug delivery strategy would be a system that qualifies for coverage under Part B. Medicare coverage is essential. 1 Personal opinion: This may be a recurring pattern we can see in other industries, too. Look for a situation where the customer cannot afford the product so the seller relies on the government, i.e., the taxpayer, to help the customer pay. One recent example is the steady rise in university tuition, student lending and now the student debt crisis.

lsiq 5y ago

This headline is exhibit A of how the NYT is our Pravda, the propaganda arm for the .0001%.

diamond559 5y ago
This is an opinion piece, not the views of the editors. They also have many opinions pieces in favor of universal healthcare and other ways to lower drug prices besides abolishing Medicare if you do some googling.
- Bilal_io 5y ago
  I am reading the article using the NYT android app, and "opinion" is not mentioned anywhere, I copied the url and checked it on a browser, there is no opinion tag, and the url had no /opinion/ segment. So, I don't think this one is an opinion piece.
  - diamond559 5y ago
    It's some column they're calling "Economic Views" with the description saying it's "A column that explores life through an economic lens with leading economists and writers." They probably should put that it's an opinion on the top of the article just to be clear upfront.

nsonha 5y ago

I'm actually not as mad about them blaming medicare, as much as I'am mad about them blaming something that isn't the cause of the problem (UK, Canada, Australia, hello?) this is to distract people from the real cause (deregulation), so that the problem stays.

pcurve 5y ago

Click-bait headline. It doesn't say Medicare has decided to cover it yet, it's under review. And only some privately administered Medicare plans have decided to cover it. Some hospital systems are doubting the efficacy and refuse to administer it. No doubt, it's a huge market. But the fact that it's a monthly infusion makes it a tough proposition. Sovaldi was a miracle drug, priced like a Bentley. This drug is no miracle drug, but they priced it like one.

popileviz 5y ago

You have to be extra gullible to fall for this

vmception 5y ago

Genuine question: if drug pricing was altered resulting in much lower prices, would the same research and development still occur? Would people be willing to pool capital to pursue FDA approval? Would other countries still get low prices? This isn't an argument for anything so I don't need rhetorical unrelated comparisons, I’m wondering if this has been evaluated and studied, or maybe if there were case studies from prior time periods or other countries

m0zg 5y ago

Blame the complete and total lack of any competition as well. To this day hospitals often outright refuse to quote the pricing of treatments and drugs, drugs can't be re-imported from cheaper locales (such as India or even Canada), and if one happens to be uninsured, hospital prices are truly eye watering even though you're paying cash, and hospital would not get anywhere near as much if you went through insurance. One would hope the _realistic_ solutions to all of this are blindingly obvious, and yet... Big Pharma is so deeply entrenched that Trump couldn't even make any headway with "favored nations" domestic pricing that he proposed. It makes sense: I, a freelancer, for instance, can't charge my larger clients more because of such a clause. And whatever drugs he did make cheaper (insulin, epi pens), Biden restored the pricing on almost immediately after taking office. Read the fact checks, they bury this particular lede really, really well, so you'll have to read very carefully, much like I used to read Pravda when I was a kid in the USSR.