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I consider the idea of applying discounts for medical products amoral customer hostile actions. Who wins? The people who are granted the knowledge or seek the

I consider the idea of applying discounts for medical products amoral customer hostile actions. Who wins? The people who are granted the knowledge or seek the knowledge themselves. The sellers of these medical products too because they get to advertise the coupon applied price of their product and... Who loses? The people who are not granted the knowledge or don't seek out the knowledge. Perhaps they don't know the system is a game and there ways of circumventing prices. Perhaps they're desperate for the life giving medication. Overall USA's medical industry is very opaque and anti-competitive in general. It really really sucks. I'd love it if we rearranged the system such that capitalistic market forces could do its work, such as letting consumers price shop. Its very frustrating.

elzbardico 3y ago
The problem is that discounts are just a somewhat benign face of a system that is a mess because you have lots of incentives in the wrong place. Basically discounted medicines are medicines being sold at the market price insurance companies pay in practice. But there’s an incentive for insurance companies for list prices for medicines to be sky high, and given the market power of insurers as buyers, those incentives extend to manufacturers. Then you have an ideological and advertising machine that convinces patients that things are the way they are because America is the best possible world, and everything in America is necessarily better/more advanced/higher quality then in any other place. I’ve seen people who really believe that American insulin is absurdly more expensive than in the rest of the world because it is of higher quality. But mind you, even in Western Europe, that arguably has even more stringent standards for a lot of things than the USA, insulin is absurdly less expensive than in America. Do people really believe that people in Switzerland and Norway are getting inferior insulin compared to the “exceptional” American insulin?
- delfinom 3y ago
  >Basically discounted medicines are medicines being sold at the market price insurance companies pay in practice. But there’s an incentive for insurance companies for list prices for medicines to be sky high, and given the market power of insurers as buyers, those incentives extend to manufacturers. This goes way beyond insurance companies. There's an entire class of middlemen known as PBMs (Pharmacy Benefit Managers). They are probably the largest contributor to medication pricing being a complete scam and disaster in the US. Of course the scam is so profitable that CVS now owns both an insurer (Aetna) and a PBM (Caremark). PBMs are so bad, that in some circumstances, pharmacies can owe the PBM money after dispensing a drug.
  - twoodfin 3y ago
    PBMs are so bad, that in some circumstances, pharmacies can owe the PBM money after dispensing a drug. Is the theory that PBM’s are foolishly generous and incur undue costs for their clients the insurance companies? Or that they’re foolishly stingy, and force pharmacies to offer unsustainably low prices?
    - sct202 3y ago
      The PBMs are who contracts with pharmacies over which insurance plans will be accepted. Basically pharmacies have to take the contracts as a whole and do the math over if they'll win or lose across the whole contract. Really only a few companies have the ability and leverage to negotiate somewhat fairly with the PBMs. On top of this, the major PBMs are now all owned by insurance companies so the difference between the PBM and insurance companies are kind of nebulous, and with this consolidation pushes the power more to the insurance company.
      - twoodfin 3y ago
        Under this logic how are PBM’s driving costs up? Seems like they’re there to reach the scale necessary to maximize downward pressure on costs.
      - lotsofpulp 3y ago
        >The PBMs are who contracts with pharmacies over which insurance plans will be accepted. When the PBM is owned by the insurer in the first place, it is a moot point. The 5 biggest health insurers all have their own PBM.
- twoodfin 3y ago
  The US insulin market is a regulatory and legislative failure. If you’re a biotech investor with a few billion dollars to burn, sure, a high-margin, high-volume biologic looks like an appealing bet. But then you look at what’s involved in the FDA approval process even after Congress added carveouts for bio-similar generics. And at the end of that billion dollar gauntlet, there’s Congress insisting that, damn-the-market and our own regulatory hurdles, insulin is so important it must be sold at a modest fraction over cost of production. This is a life saving substance, to which many who can certainly afford to pay would ascribe considerable value (this is the “demand” in supply & demand). The result of these price controls will inevitably be shortages, which will be blamed on the same greedy capitalists who are being blamed for the state of a market ultimately structured by this same Congress.
  - elzbardico 3y ago
    The fact is that in a sizable portion of the world (and I am not talking about Cuba, China or some leftist south american government, I am talking about western europe, and western european countries with a higher GDP per capita and higher HDI than the US, like Switzerland, Sweden and Norway) a) Insulin is cheaper, a fucking lot cheaper b) Its prices (along with a lot of other drugs) are regulated. I haven't yet heard from my friends in Switzerland, Norway or Belgium any sad story about people rationing their insulin supplies because it is mind bogling expensive, and shortages are also unheard of. Insulin is basically a solved problem. I don't care about an hypothetical techbro sad story of how he won't invest his billions to disrupt the insulin market because bad government doesn't allow it to sell untested products.
- lotsofpulp 3y ago
  >But there’s an incentive for insurance companies for list prices for medicines to be sky high, and given the market power of insurers as buyers, those incentives extend to manufacturers. This does not make any sense to me. If the price for a medicine decreases, then the insurance company's costs decrease. Why would a higher "list" price benefit insurers? Obviously, manufacturers would like prices for medicine to increase, as that would cause their revenue to increase. But that has nothing to do with insurance companies.
  - elzbardico 3y ago
    Because the price for the insurance company is already heavily discounted. Keeping the prices high for out-of-insurance customer ensures that you're doubly penalized for not having insurance.

elzbardico 3y ago

The problem is that discounts are just a somewhat benign face of a system that is a mess because you have lots of incentives in the wrong place. Basically discounted medicines are medicines being sold at the market price insurance companies pay in practice. But there’s an incentive for insurance companies for list prices for medicines to be sky high, and given the market power of insurers as buyers, those incentives extend to manufacturers. Then you have an ideological and advertising machine that convinces patients that things are the way they are because America is the best possible world, and everything in America is necessarily better/more advanced/higher quality then in any other place. I’ve seen people who really believe that American insulin is absurdly more expensive than in the rest of the world because it is of higher quality. But mind you, even in Western Europe, that arguably has even more stringent standards for a lot of things than the USA, insulin is absurdly less expensive than in America. Do people really believe that people in Switzerland and Norway are getting inferior insulin compared to the “exceptional” American insulin?

delfinom 3y ago
>Basically discounted medicines are medicines being sold at the market price insurance companies pay in practice. But there’s an incentive for insurance companies for list prices for medicines to be sky high, and given the market power of insurers as buyers, those incentives extend to manufacturers. This goes way beyond insurance companies. There's an entire class of middlemen known as PBMs (Pharmacy Benefit Managers). They are probably the largest contributor to medication pricing being a complete scam and disaster in the US. Of course the scam is so profitable that CVS now owns both an insurer (Aetna) and a PBM (Caremark). PBMs are so bad, that in some circumstances, pharmacies can owe the PBM money after dispensing a drug.
- twoodfin 3y ago
  PBMs are so bad, that in some circumstances, pharmacies can owe the PBM money after dispensing a drug. Is the theory that PBM’s are foolishly generous and incur undue costs for their clients the insurance companies? Or that they’re foolishly stingy, and force pharmacies to offer unsustainably low prices?
  - sct202 3y ago
    The PBMs are who contracts with pharmacies over which insurance plans will be accepted. Basically pharmacies have to take the contracts as a whole and do the math over if they'll win or lose across the whole contract. Really only a few companies have the ability and leverage to negotiate somewhat fairly with the PBMs. On top of this, the major PBMs are now all owned by insurance companies so the difference between the PBM and insurance companies are kind of nebulous, and with this consolidation pushes the power more to the insurance company.
    - twoodfin 3y ago
      Under this logic how are PBM’s driving costs up? Seems like they’re there to reach the scale necessary to maximize downward pressure on costs.
    - lotsofpulp 3y ago
      >The PBMs are who contracts with pharmacies over which insurance plans will be accepted. When the PBM is owned by the insurer in the first place, it is a moot point. The 5 biggest health insurers all have their own PBM.
twoodfin 3y ago
The US insulin market is a regulatory and legislative failure. If you’re a biotech investor with a few billion dollars to burn, sure, a high-margin, high-volume biologic looks like an appealing bet. But then you look at what’s involved in the FDA approval process even after Congress added carveouts for bio-similar generics. And at the end of that billion dollar gauntlet, there’s Congress insisting that, damn-the-market and our own regulatory hurdles, insulin is so important it must be sold at a modest fraction over cost of production. This is a life saving substance, to which many who can certainly afford to pay would ascribe considerable value (this is the “demand” in supply & demand). The result of these price controls will inevitably be shortages, which will be blamed on the same greedy capitalists who are being blamed for the state of a market ultimately structured by this same Congress.
- elzbardico 3y ago
  The fact is that in a sizable portion of the world (and I am not talking about Cuba, China or some leftist south american government, I am talking about western europe, and western european countries with a higher GDP per capita and higher HDI than the US, like Switzerland, Sweden and Norway) a) Insulin is cheaper, a fucking lot cheaper b) Its prices (along with a lot of other drugs) are regulated. I haven't yet heard from my friends in Switzerland, Norway or Belgium any sad story about people rationing their insulin supplies because it is mind bogling expensive, and shortages are also unheard of. Insulin is basically a solved problem. I don't care about an hypothetical techbro sad story of how he won't invest his billions to disrupt the insulin market because bad government doesn't allow it to sell untested products.
lotsofpulp 3y ago
>But there’s an incentive for insurance companies for list prices for medicines to be sky high, and given the market power of insurers as buyers, those incentives extend to manufacturers. This does not make any sense to me. If the price for a medicine decreases, then the insurance company's costs decrease. Why would a higher "list" price benefit insurers? Obviously, manufacturers would like prices for medicine to increase, as that would cause their revenue to increase. But that has nothing to do with insurance companies.
- elzbardico 3y ago
  Because the price for the insurance company is already heavily discounted. Keeping the prices high for out-of-insurance customer ensures that you're doubly penalized for not having insurance.