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> Payers determine if it's worth the money. As I understand, Medicare (Part B) pays "market rate" for this drug and cannot act as an independent payer and nego
by clcaev 5y ago
> Payers determine if it's worth the money.
As I understand, Medicare (Part B) pays "market rate" for this drug and cannot act as an independent payer and negotiate, yet, they seem as the primary market? This market price would be set by the secondary, and much smaller, market of private payers.
- rayiner 5y agoThey aren’t the primary market. Except for drugs used in hospitalizations and certain other settings, Medicare itself doesn’t cover drugs. Drug coverage is under Part D plans offered through private insurers, who do negotiate prices. The goal is to have a many-to-many market. When you have a one buyer to many seller market, you open yourselves up to monopsony, which can drive prices below the efficient level.