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> The other two thirds come from drug price overruns (US drug buyers pay twice as much as single-payer countries which have much more size = bargaining power)

> The other two thirds come from drug price overruns (US drug buyers pay twice as much as single-payer countries which have much more size = bargaining power) As an infuriating elaboration on your point, the United States has a huge single payer in Medicare that is by law prevented from effectively negotiating drug price.

jjoonathan 13y ago
Yes! It's insanity! Well, I wish it was insanity. It's actually cold and calculated exploitation. This is why we need campaign finance reform. Under the current system, politicians don't have the freedom to reject bribe money even if they want to. What a mess.
refurb 13y ago
Medicare isn't allowed to negotiate, but it automatically gets the average selling price, inclusive of all discounts. Disproportionate share hospitals get 23.1% discount. It's not like the US gov't isn't extracting it's share. Medicaid IS allow to negotiate and has federally mandated discounts. Medicaid covers more people in the US than ANY of the Canadian provinces who do negotiate. What does that tell you?
- jjoonathan 13y ago
  Methodology is important. See here: http://www.law.cornell.edu/uscode/text/42/1395w-3a http://www.law.cornell.edu/uscode/text/42/1395w-3a > the manufacturer’s “average sales price” means ... sales to all purchasers ... in the United States ... divided by the total number of such units So it looks like the ASP is fixed to the shit price that results from fragmented bargaining by US companies. A 23% discount on a 100% markup = drug companies laughing all the way to the bank. As for Medicaid, I'm not familiar enough to answer. Do they get decent prices or is there similar corruption at play?
  - msellout 13y ago
    Medicaid does get decent prices, but providers may refuse to accept Medicaid. So some people have no access to affordable care, despite having Medicaid, because none of the providers within a reasonable distance accept Medicaid.
  - refurb 13y ago
    Corruption? Calm down. The top 3 insurers (who negotiate these prices) in the US cover nearly 100 M people. Medicare gets those discounts included as well. As for Medicaid, it often pays the lowest price of all purchasers in the US. For many doctors, Medicaid reimburses them so little, they lose money on drugs. That's why many doctors don't want to take Medicaid patients.
- makomk 13y ago
  Last I heard, the pharmaceutical companies had come up with various ways of artificially manipulating the price they officially sold drugs for in order to take advantage of this, such as making direct offsetting payments to hospitals rather than discounting the prices.
  - refurb 13y ago
    Providing rebates after purchase is pretty common in the pharmaceutical industry and yes, they are included in ASP. There was some manipulation of the ASP back in the early 2000's, but those companies were charged under the False Claims Act and paid a pretty significant penalty. I don't think there is widespread manipulation at this point.

jjoonathan 13y ago

Yes! It's insanity! Well, I wish it was insanity. It's actually cold and calculated exploitation. This is why we need campaign finance reform. Under the current system, politicians don't have the freedom to reject bribe money even if they want to. What a mess.

refurb 13y ago

Medicare isn't allowed to negotiate, but it automatically gets the average selling price, inclusive of all discounts. Disproportionate share hospitals get 23.1% discount. It's not like the US gov't isn't extracting it's share. Medicaid IS allow to negotiate and has federally mandated discounts. Medicaid covers more people in the US than ANY of the Canadian provinces who do negotiate. What does that tell you?

jjoonathan 13y ago
Methodology is important. See here: http://www.law.cornell.edu/uscode/text/42/1395w-3a http://www.law.cornell.edu/uscode/text/42/1395w-3a > the manufacturer’s “average sales price” means ... sales to all purchasers ... in the United States ... divided by the total number of such units So it looks like the ASP is fixed to the shit price that results from fragmented bargaining by US companies. A 23% discount on a 100% markup = drug companies laughing all the way to the bank. As for Medicaid, I'm not familiar enough to answer. Do they get decent prices or is there similar corruption at play?
- msellout 13y ago
  Medicaid does get decent prices, but providers may refuse to accept Medicaid. So some people have no access to affordable care, despite having Medicaid, because none of the providers within a reasonable distance accept Medicaid.
- refurb 13y ago
  Corruption? Calm down. The top 3 insurers (who negotiate these prices) in the US cover nearly 100 M people. Medicare gets those discounts included as well. As for Medicaid, it often pays the lowest price of all purchasers in the US. For many doctors, Medicaid reimburses them so little, they lose money on drugs. That's why many doctors don't want to take Medicaid patients.
makomk 13y ago
Last I heard, the pharmaceutical companies had come up with various ways of artificially manipulating the price they officially sold drugs for in order to take advantage of this, such as making direct offsetting payments to hospitals rather than discounting the prices.
- refurb 13y ago
  Providing rebates after purchase is pretty common in the pharmaceutical industry and yes, they are included in ASP. There was some manipulation of the ASP back in the early 2000's, but those companies were charged under the False Claims Act and paid a pretty significant penalty. I don't think there is widespread manipulation at this point.