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Such friction can reduce the rate at which the equilibrium is reached, but they can't prevent it. And I will note that insurance companies have incentive to ad
by pfdietz 2y ago
Such friction can reduce the rate at which the equilibrium is reached, but they can't prevent it. And I will note that insurance companies have incentive to adjust things to drive patients to use the cheaper options. We see this all the time in prescription plans that motivate use of generic drugs and cheaper pharmacies, and even coerce doctors to use cheaper, older treatments before newer treatments with superior efficacy (this has been happening in oncology, for example.) If they are willing to do that in the brutal competition to cut costs to attract people to their plans, they will certainly be willing to apply the screws to reduce GLP-1 agonist pricing.
- avidiax 2y agoGenerics are not the competition that you think they are. Drug companies have been paying the makers of generic drugs to not bring generics to the market. Insurance companies don't have the incentives that you think they do. If prescription drugs in general become more expensive, they simply raise the price of insurance. And if they are limited to taking X% of the rate as administrative fees, then this means that revenue increases. If the market followed the Chicago model as you think it does, how does the price of insulin increase? Why are drug prices increasing faster than inflation? https://www.ftc.gov/news-events/topics/competition-enforcement/pay-delay https://www.ftc.gov/news-events/topics/competition-enforceme...