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That's your insurance provider that told you no - not "Big Pharma". Which is what TFA points out as well: "The bulk of the rents is captured instead by provid

That's your insurance provider that told you no - not "Big Pharma". Which is what TFA points out as well: "The bulk of the rents is captured instead by providers of health-care services such as hospitals and the system’s true money-makers: insurers, pharmacy-benefit managers and other middlemen taking advantage of its opacity. They have higher costs of capital than drugmakers, but they also clear our 10% hurdle much more comfortably (chart 3)"

tptacek 1y ago
Both are counterparties to negotiations that set price and availability, so it probably doesn't make sense to separate their role.
Analemma_ 1y ago
Everyone is guilty here, because once one sector forms a monopoly, they have monopoly pricing power, and so their counterparty sectors have to form a monopoly as well to keep leverage in negotiations. 50 years ago, there were many more pharma companies, many more insurance companies, and many more hospitals under individual ownership. First the pharma companies consolidated, which give them monopoly pricing power over insurers. So then the insurance companies consolidated to they could negotiate on equal footing, but then they had monopoly pricing power over the hospitals. So then hospitals consolidated so they could negotiate. And now after decades of this, we're right back we're started, except for consumers, who can't consolidate and hence get fucked. The two solutions here are either breaking up all the monopolies at the same time-- pharma, insurance, and hospitals-- so that everyone has market competition again, or letting health care consumers consolidate so they have pricing leverage-- i.e., forming a single-payer health-care system where the government negotiates deals on behalf of a 330+-million payer pool. It does not make sense to either blame or spare one single sector: the pharmas, insurers and hospitals are all guilty, though in a sense all of their hands were forced by their counterparties. It's a coordination problem of exactly the kind government is supposed to solve, hence why government-run health care eventually seems like the only option.
- SJC_Hacker 1y ago
  > So then hospitals consolidated so they could negotiate. And now after decades of this, we're right back we're started, except for consumers, who can't consolidate and hence get fucked. Consumer consolidation is called voting. Its too bad most consumers have voted in politicians who don't represent their best interests
- thmsths 1y ago
  I feel like you explained how we got there and our options to fix it perfectly. As you point out we have monopolies (or close to) at every single step. Whatever bandaid people and politician can come up with will quickly be neutralized by these conglomerates, at this point, any half measure is basically useless or has severe tradeoffs.
  - pixl97 1y ago
    >As you point out we have monopolies (or close to) at every single step. This is happening to a huge number of industries in the US, not just healthcare.
    - jgalt212 1y ago
      Fair enough, but - Healthcare is almost 20% of the economy - Demand for Healthcare is largely inelastic
- potato3732842 1y ago
  17% of the US GDP is healthcare so that's probably about 20% of the country that will scream bloody murder if you try and touch it in any way that makes it cost the other 80% less.
- FireBeyond 1y ago
  You're also neglecting the insurers and PBMs. Health insurers are limited by law as to profit margins. So how to make more money? Raise prices, or signal to providers that you'll pay higher. Because if your incoming premiums have to rise, then that percentage that can be captured as profit rises. But wait... what if you (an insurer) build/buy a middle-man to route prescription money through? That isn't covered by those profit margin constraints. So you can just up the prices of prescriptions and siphon profits that way. Even better, you can do entirely sketchy BS (looking at you, Aetna, but also others): "Sure, you can get your scripts filled at your local pharmacy... but only for <=30 day supplies. We'll reject any script authorization for a supply of 31+ days, like those extremely convenient 90 day refills... unless you use the mail-order pharmacy that is wholly owned by us", thus making people choose between convenience and pricing.
darth_avocado 1y ago
The more the middle men, the more the cost. It’s not rocket science that big pharma aren’t the only reason why the costs are high. Proof: - I can get plenty of drugs cheaper if I don’t use my insurance - I can get hospital services cheaper if I don’t use my insurance. There have been times where my copay after meeting the deductible and the insurance coverage is higher than my entire out of pocket cost if I don’t use my insurance.
blindriver 1y ago
The $1000 price is without insurance so what you're saying doesn't apply.

tptacek 1y ago

Both are counterparties to negotiations that set price and availability, so it probably doesn't make sense to separate their role.

Analemma_ 1y ago

Everyone is guilty here, because once one sector forms a monopoly, they have monopoly pricing power, and so their counterparty sectors have to form a monopoly as well to keep leverage in negotiations. 50 years ago, there were many more pharma companies, many more insurance companies, and many more hospitals under individual ownership. First the pharma companies consolidated, which give them monopoly pricing power over insurers. So then the insurance companies consolidated to they could negotiate on equal footing, but then they had monopoly pricing power over the hospitals. So then hospitals consolidated so they could negotiate. And now after decades of this, we're right back we're started, except for consumers, who can't consolidate and hence get fucked. The two solutions here are either breaking up all the monopolies at the same time-- pharma, insurance, and hospitals-- so that everyone has market competition again, or letting health care consumers consolidate so they have pricing leverage-- i.e., forming a single-payer health-care system where the government negotiates deals on behalf of a 330+-million payer pool. It does not make sense to either blame or spare one single sector: the pharmas, insurers and hospitals are all guilty, though in a sense all of their hands were forced by their counterparties. It's a coordination problem of exactly the kind government is supposed to solve, hence why government-run health care eventually seems like the only option.

SJC_Hacker 1y ago
> So then hospitals consolidated so they could negotiate. And now after decades of this, we're right back we're started, except for consumers, who can't consolidate and hence get fucked. Consumer consolidation is called voting. Its too bad most consumers have voted in politicians who don't represent their best interests
thmsths 1y ago
I feel like you explained how we got there and our options to fix it perfectly. As you point out we have monopolies (or close to) at every single step. Whatever bandaid people and politician can come up with will quickly be neutralized by these conglomerates, at this point, any half measure is basically useless or has severe tradeoffs.
- pixl97 1y ago
  >As you point out we have monopolies (or close to) at every single step. This is happening to a huge number of industries in the US, not just healthcare.
  - jgalt212 1y ago
    Fair enough, but - Healthcare is almost 20% of the economy - Demand for Healthcare is largely inelastic
potato3732842 1y ago
17% of the US GDP is healthcare so that's probably about 20% of the country that will scream bloody murder if you try and touch it in any way that makes it cost the other 80% less.
FireBeyond 1y ago
You're also neglecting the insurers and PBMs. Health insurers are limited by law as to profit margins. So how to make more money? Raise prices, or signal to providers that you'll pay higher. Because if your incoming premiums have to rise, then that percentage that can be captured as profit rises. But wait... what if you (an insurer) build/buy a middle-man to route prescription money through? That isn't covered by those profit margin constraints. So you can just up the prices of prescriptions and siphon profits that way. Even better, you can do entirely sketchy BS (looking at you, Aetna, but also others): "Sure, you can get your scripts filled at your local pharmacy... but only for <=30 day supplies. We'll reject any script authorization for a supply of 31+ days, like those extremely convenient 90 day refills... unless you use the mail-order pharmacy that is wholly owned by us", thus making people choose between convenience and pricing.

darth_avocado 1y ago

The more the middle men, the more the cost. It’s not rocket science that big pharma aren’t the only reason why the costs are high. Proof: - I can get plenty of drugs cheaper if I don’t use my insurance - I can get hospital services cheaper if I don’t use my insurance. There have been times where my copay after meeting the deductible and the insurance coverage is higher than my entire out of pocket cost if I don’t use my insurance.

blindriver 1y ago

The $1000 price is without insurance so what you're saying doesn't apply.