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Why drug prices in America are so high (2016)

economist.com

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Re: Why drug prices in America are so high (2016)

#91

Post by calvinbhai »

Drug prices in US go up because of collusion between Insurance Companies and Drug manufacturers.

Would I buy expensive health insurance if drugs cost me $100 a month? Most probably never.

What if the sticker price for my monthly dose of drugs was $10,000 or $50,000? You bet I'd go get an insurance that'd cost $500 a month.

With such sticker shock, manufacturer reaps in profits. Insurance companies get to charge higher premiums.

Solution: Fix IP laws for drugs in US. If the drug costs beyond the 2x or 5X of what it costs in India, or than the average of drug prices in a few countries, then that drug loses all its IP protections in US. Manufacturer is still free to charge zillions for that product, but there'll be no restrictions on copycats or generic versions from outside US taking over the market.

It'll help in keeping a sensible profit margin for manufacturers without ripping off Americans.

Most problems in healthcare costs in US, are due to insurance companies dictating terms.

Re: Why drug prices in America are so high (2016)

#92

Post by andrewla »

> Private insurers do so instead, but the government binds their hands, for example by requiring them to pay for six broad categories of drugs, without exception

I'd like to understand more of this -- it seems like there is hand-tying at multiple levels. In addition to insurance companies, why isn't it possible for pharmacies, for example, to compete on price directly -- CVS, or Walgreens, or potentially even Walmart, seem like they would have sufficient market share to negotiate prices as well.

Re: Why drug prices in America are so high (2016)

#93

Post by hfourm »

harryh wrote: post #65
RcouF1uZ4gsC wrote: post #59

Earlier quoted context omitted.

The US is richer and should be paying more than say Kenya. However, you would be hard-pressed to explain why the US should be paying more than say Denmark or Sweden or Germany?

The US is 8% richer than Denmark, 12% richer than Sweden and 40% richer than Germany on a per capita basis. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... If you had said Luxembourg, Switzerland & Norway I would have agreed with you. That's only about 14 million people though.

He still makes a point if for example country A is 8% poorer yet paying 40% less.

Re: Why drug prices in America are so high (2016)

#94

Post by refurb »

dv_dt wrote: post #76
refurb wrote: post #71

Earlier quoted context omitted.

Any private drug negotiator is going to be in a terrible position because they don't have 100% of the market. That's absolutely not true. Look at the HCV treatments. The average discount for private insurers is 40%+. And that's just one example. They are tons of drug classes that are very heavily discounts to private payers. Members of a health plan can't just move from one plan to another whenever they want. There i…

But when you look at data, this scheme does not result in better drug prices than national negotiation.

Do you have data that shows that? HCV net prices are lower in the US than in the EU.

Re: Why drug prices in America are so high (2016)

#95

Post by harryh »

chimeracoder wrote: post #72
harryh wrote: post #29

Earlier quoted context omitted.

This is a silly hack. The US has plenty of market power to reduce prices for drugs sold in the US. There are reasons to be in favor of wielding that market power and there are reasons to be against it. But there is no rational reason to pretend to not wield it but then re-import a bunch of drugs from Canada. That's just a waste of shipping costs.

> But there is no rational reason to pretend to not wield it but then re-import a bunch of drugs from Canada. Permitting trade across the US-Canadian border provides an equalizing force on the prices across the border, even though no drugs actually need to make the return trip (at equilibrium). In other words, allowing the trade puts an upper bound on the difference between the prices charged in the US and the prices…

OK, that's a pretty good point and you have me thinking about things a lil'.

Re: Why drug prices in America are so high (2016)

#96

Post by ferentchak »

chimeracoder wrote: post #74
ferentchak wrote: post #32

Earlier quoted context omitted.

This. Do we need to subsidize Sweden and Germany? I have wondered for a while why we don't make a law saying the highest price you can sell a drug for in the US is no higher than the lowest negotiated price that drug is sold to in other rich countries. So if Canada negotiates a drug for $10 then that is the highest price you can sell it for here etc. That way they can set the prices however they want but collective b…

> I have wondered for a while why we don't make a law saying the highest price you can sell a drug for in the US is no higher than the lowest negotiated price that drug is sold to in other rich countries. You don't need a rule to enforce that. You just need to allow the US to reimport prescription drugs that were originally exported from the US. It would be far and away the simplest solution and would have the same e…

It's a nit pick but those prices would always be a bit higher after the effort to import them and source them etc. Of course this will never happen. No politician wants to have her name tied to the bill that allowed all those dangerous drugs into the country that killed kids. One mistaken import or a badly made counterfeit being imported would be a media frenzy.

Re: Why drug prices in America are so high (2016)

#97

Post by abfabry »

I work at Blink Health (www.blinkhealth.com) and we're working to solve this problem and offer patients a fair price for their medication, often saving patients up to 90% of list price. We negotiate with pharmacies and pharmaceutical manufacturers to get the lowest rates and improve price transparency in an opaque market. We have a kick-ass engineering team -- if you're interested in these problems and want to help us fix healthcare shoot me an email at alexander [at] blinkhealth [dot] com

Re: Why drug prices in America are so high (2016)

#98

Post by white-flame »

frgtpsswrdlame wrote: post #40
RcouF1uZ4gsC wrote: post #25

This has a very simple fix, and is a fix that would appeal to Donald Trump: Require that pharmaceutical companies do not charge Americans any more for their drugs than what they charge any developed country. This lets other countries do the dirty work of negotiating prices while reaping the benefits for the US. In addition, it goes along with his whole America is getting screwed narrative - ie that other companies ar…

Why would that appeal to Donald Trump? It would hurt the profits of the drug industry in America which will cost jobs, pharma execs will tell him how bad this is for America and how harmful it is to drug R&D, etc etc. Donald Trump may have campaigned as a negotiator for the common man but he identifies with CEOs, anything that hurts them is not something that appeals to him.

I think he means it would appeal to his political narrative of Americans being caught in a bunch of "bad deals" internationally.

Re: Why drug prices in America are so high (2016)

#99

Post by white-flame »

andmarios wrote: post #73
RcouF1uZ4gsC wrote: post #25

This has a very simple fix, and is a fix that would appeal to Donald Trump: Require that pharmaceutical companies do not charge Americans any more for their drugs than what they charge any developed country. This lets other countries do the dirty work of negotiating prices while reaping the benefits for the US. In addition, it goes along with his whole America is getting screwed narrative - ie that other companies ar…

But isn't free market, unregulated prices, etc the mandate of US? I don't judge, just making a remark.

It's not a free market if you're not allowed to import from cheaper suppliers elsewhere, so that's already broken.

Re: Why drug prices in America are so high (2016)

#100

Post by quest88 »

frgtpsswrdlame wrote: post #64
refurb wrote: post #58

Earlier quoted context omitted.

There are a lot of problems with reference pricing. First off, if country A (300M people) references country B (30M people), then the drug company can simply chose not to launch the drug in country B if that reference price is too low. Second, drug companies can modify their launch sequence (this already happens today) so that they launch in the referenced countries after the price is set in the country doing the ref…

What price control method would you advocate for?

Fixing the patent system so generics can come to market faster. I'm not sure how.
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