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>Who profits most from America’s baffling health-care system? >Hint: it isn’t big pharma When the Economist - the neoliberal paper of record writes an article
by pydry 3y ago
>Who profits most from America’s baffling health-care system?
>Hint: it isn’t big pharma
When the Economist - the neoliberal paper of record writes an article downplaying the profitability of a particular industry I have to say I get a little suspicious.
And I discovered that the Journal of American Medical Association apparently doesn't agree that Pharma makes mediocre profits:
https://www.biospace.com/article/how-profitable-is-the-pharma-industry-a-new-report-shows-the-industry-is-more-profitable-than-most-other-large-companies/ https://www.biospace.com/article/how-profitable-is-the-pharm...
- anovikov 3y agoYeah i'm on Wegovy and the price in EU is less than 1/3 the American price. Same company sells it. They just figured that people in the U.S. are used to pay way more. It has nothing to do with insurance inflating price - it's not covered by insurance for almost anyone in either place. Seriously what's wrong with the U.S. Here in Europe, heating bills can bankrupt people and they have to overpay for rent because gas is so expensive they can't rent further from their jobs - their commute radius is frequently limited with gas costs that are insane - resulting in needlessly dense cities. A separate house is a thing for upper class. All of it sucks, but... no one gets bankrupted by healthcare costs here. This is simply unheard of. And health insurance costs an invisibly small amount. I guess it removes a great deal of worry for health-concerned people.
- codeTired 3y agoI’m actually exploring legality of shipping meds from EU to us directly to patients. There is a compounded med that isn’t covered by insurance and I wonder if I could find a pharmacy in my homeland(Poland) to compound and ship it directly to patients. I have found some places that apparently do it but the sites are bad and don’t seem legit.
- anovikov 3y agoWhy not just fly there and bring in luggage? I fly for my each 3-months pack to Copenhagen, it's also a nice place to hang out.
- codeTired 3y agoBecause many people in US forums cannot get the medication due to cost. This would benefit everyone.
- aj7 3y agoTo save $100 every three months?
- NotSuspicious 3y agoDo you still need a prescription to get it in Copenhagen?
- anovikov 3y agoYes, but i live in EU and any prescription issued in EU is valid throughout it, even if the particular drug is not marketed in a country where issued (a doctor always has a right to issue a prescription, because drug approvals are always EU-wide).
- s1artibartfast 3y agoThis is generally illegal, but my understanding is that it is still done.
- natebc 3y agoI think it's called drug trafficking? I'm no lawyer though.
- aj7 3y agoRead my reply.
- aj7 3y agoIt’s illegal, just like the states that first legalized marijuana were. The federal government lays off, seizing a random few shipments. When your drug is on patent, it’s the way to go. Companies like Allergan set up identical process factories in Europe. They purposely don’t fill in the last set of paperwork that would legalize the factory output for export into the U.S. That’s the flimsy mechanism that lets Customs do some window-dressing regulation. Had a problem once, during the Trump Admin. Customs seized a box. I got a nasty, semi-form letter from them. My prescription was replaced at no cost by my mail order provider. They said, “It’s random. Don’t worry about it.” Cost of doing business.
- aj7 3y agoBeen doing it for a decade. It’s a huge business. Had one shipment seized by Customs. It was promptly replaced, at no cost to me, by the UK source.
- dukeyukey 3y agoWhere in Europe are you? Even with our screwy property market, in the UK detached houses are hardly for the upper class only. Maybe in London, or somewhere like Cambridge.
- CorrectHorseBat 3y ago>Europe >needlessly dense cities Guess you've never been in Asia? European cities are far from too dense.
- katbyte 3y ago> their commute radius is frequently limited with gas costs that are insane where in the eu are you talking about? every time i visit/talk to friends there it seems to be the opposite because public transit is ubiquitous and you can get a train out to all sorts of small towns and villages.
- supertrope 3y agoWhile the pharmaceutical industry is grotesque in charging the captive audience of sick people as much as possible, it is a fact that drugs are not the majority of healthcare spending. On the normative question of blaming groups, it’s like that imposter Spider-Man meme of each person pointing at the other. Hospitals charge 10x the actual market price and health insurance boasts on your explanation of benefits that they got you a 90% discount. Americans demand cutting edge maximum intervention perfectly safe treatment with no formal government rationing, or HMO rationing. Health care is a for profit sector. Fees are paid by third parties (so patients are not directly exposed to routine costs). There is heavy quality regulation. Providers are incentivized to treat more through fee for service so the sicker you get and the more procedures they perform the more revenue they earn (perverse incentive). There is no counterweight to negotiate prices down. The end result is 7% medical inflation per year.
- killjoywashere 3y agoHospitals make the lions share of the profits. Non-corporate hospital owners are famously poor managers and tend to spend the money not wisely until they go bankrupt, then a corporate system buys the hospital, restructures, and takes all the profit. See HCA, Tenet, Partners, Mayo, Stanford, Anthem, etc. Fun fact, HCA was cofounded by Bill Frist's father. Bill Frist became a cardiac surgeon, then a US senator for Tennessee. At one point he built another healtchare system and sold it to Anthem. You'd think the medical schools might remain independent under their universities, but that often turns out to not be the case as well. Turns out asking for handouts from the endowment looks a lot like bankruptcy, and the rest of the university takes a dim view of it, especially considering how home addresses of their physician colleagues (hint: very large houses in the best neighborhoods). See Tulane, Georgetown, etc. The state school systems, like the UCs, tend to do better, or are at least shielded by the state budget. If you point to Mayo, Stanford, and Partners as exceptions, I'd say they're the exceptions that prove the rule. Mayo has always been a self-sustaining business. Stanford and Partners have ready consultation with the strongest business schools in the US, if not the world, and the endowments to match.
- lolinder 3y agoI can't read the article because of the paywall, but the headline and subtitle that you quote don't attempt to quantify Big Pharma's profits, much less call them mediocre, they're very specifically asking "who profits most?" There can be (and most likely are) dozens of players who all profit enormously from our ridiculous system, but there can only be one who profits most.
- simonw 3y agoYeah, the key point the article is making is this: > Over the past decade these firms have quietly increased their presence in America’s vast health-care industry (see chart ). They do not make drugs and have not, until recently, treated patients. They are the intermediaries—insurers, chemists, drug distributors and pharmacy-benefit managers (PBMs)—sitting between patients and their treatments. In 2022 the combined revenue of the nine biggest middlemen—call them big health—equated to nearly 45% of America’s health-care bill, up from 25% in 2013. Their answer to the question "who profits most?" is this category of company. That's still compatible with the fact that the manufacturers of the pharmaceuticals have extremely high profit margins.
- aj7 3y agoRegister. The Economist’s paywall is generous w free articles.
- kdmccormick 3y agohttps://archive.ph/Typim https://archive.ph/Typim The article says Big Health, which is defines as the middle-men between providers and consumers (such as perscription benefit management system), takes the biggest slice of the cake.
- xyzelement 3y agoI don’t know why you were downvoted, this seems like an obvious connection to call out. A bit related but separate, one of the most compelling arguments that anti-vax has is that vax mandates translate to a built in mandatory market for manufacturers. You don’t have to agree with these but it’s an obvious factor in a follow the money type of way
- supertrope 3y agoJust like how mandatory sewers helps big pipe, plumbers, the utility company, and harms septic tank makers. Compulsory schooling puts scribes out of work!
- xyzelement 3y agoMy post did not ascribe a value judgement to the side, merely surfaced a factor. Do you think financial incentives don’t matter? Do you go through your entire life that way or is this the only topic where financial incentives don’t matter?
- supertrope 3y agoI am playing devil’s advocate. Incentives definitely matter. I am tired of anti-vaccine scams being peddled. A few years ago I noticed a sign of regulatory capture in Scott Gottlieb, Pfizer board member, who went to the media often about the Covid vaccine. He was previously FDA commissioner. I once read of a school board member who held Pfizer shares and recused themselves from a vote on whether to nor to require it to attend class.
- lolinder 3y agoThey were downvoted because they're addressing what they imagine the article was about, not its actual contents. The article barely mentions Big Pharma except in this blurb at the top. It's not an attempt to downplay Pharma profits, it's an attempt to draw attention to lesser-known players with even larger profits.
- 3y ago
- refurb 3y agoThat analysis is horrible. Like failing statistics 101 horrible. It completely ignores survivorship bias. You can't just look at the profit margin of the biggest public companies. You're basically just selecting for the winners. And the entire business model of biotech is 90% are losers and of the 10% that win, they win big to make up for all the losers. You'd need to do an analysis that looks at profitability of the entire industry. Look at all the VC backed biotechs that get $500M in funding then go belly up. Look up the multiple acquisitions in the past decade that were just written off.