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Illinois governor signs law capping insulin costs at $100 per month

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Re: Illinois governor signs law capping insulin costs at $100 per month

#121

Post by EpicEng »

jerf wrote: post #64
ceejayoz wrote: post #52

Earlier quoted context omitted.

> That's completely unrelated to what I'm explaining. Then this is a https://en.wiktionary.org/wiki/if_my_aunt_had_balls,_she%27d... scenario. If IL were capping below cost, that'd be a problem. They're not, though.

The topic is price fixing; the discussion is about the efficaciousness of price fixing. Why cap when they ought to have the power to look at the root problems? Why fix this one particular thing in a dangerous and probably-ultimately-ineffective way when they ought to be able to address the whole issue of price-gouging medicines more systematically? (Other than the possibility of this being a band-aid while they do th…

>The topic is price fixing; the discussion is about the efficaciousness of price fixing.

No it's not. This is specifically about price fixing as it relates to insulin.

Re: Illinois governor signs law capping insulin costs at $100 per month

#122

Post by craftinator »

throwlaplace wrote: post #88
stochastician wrote: post #37

Earlier quoted context omitted.

Comments like this always make me sad. Not just because I disagree with them (I do!) or that I think they are claiming certainty about facts in dispute (I think they are ! [1, 2] ) but because they make no mention of trade-offs. We can vehemently disagree about these things, get our information from different sources, and advocate for different policies, but hopefully we can all agree that there _would_ be tradeoffs?…

whenever anyone casts doubt on the idea that healthcare (or pharma) could be cheaper (and implicitly that the tradeoffs would be worth it) my simple response is: then please tell me how does every other western nation accomplish it? overall healthcare goals are met and for less money (in aggregate and individually) all around the world. in which way is america exceptional except insofar as exactly that here business…

100% agree. If we didn't have data about any of these other Western country's healthcare systems, then arguments like "maybe that's just how much it costs" or "there are tradeoffs between market driven and government driven" are plausible. However, that is simply not the case. The money goes >somewheresomeone<, and with wealth inequality being quite high in the US, I imagine you can identify where a large amount of that money is going. Extremely rich pharma Bros are a great example of how the market has failed in the pharma industry.

Re: Illinois governor signs law capping insulin costs at $100 per month

#123

Post by EpicEng »

RHSeeger wrote: post #68
ceejayoz wrote: post #18

Earlier quoted context omitted.

It doesn't cost anywhere near $100 to produce a month's supply. https://www.vox.com/2019/4/3/18293950/why-is-insulin-so-expe... > The US is a global outlier on money spent on the drug, representing only 15 percent of the global insulin market and generating almost half of the pharmaceutical industry’s insulin revenue. According to a recent study in JAMA Internal Medicine, in the 1990s Medicaid paid between $2.36 and…

> Why Americans ration a drug discovered in the 1920s. The current top-shelf insulins were not discovered in the 1920s and are considerably better than the ones that were. The older insulins (going back to R, L, N sold in the 80s) are fairly inexpensive; on the order of $25 per bottle (and I believe can be bought over the counter). The newer insulins sell for on the order of $275 per bottle. The numbers I see say it…

Where are you getting those numbers from? Estimates I found place the cost to produce a vial, including the entire supply chain, at $3-$6.

Re: Illinois governor signs law capping insulin costs at $100 per month

#124

Post by mattrp »

snapetom wrote: post #47
gruez wrote: post #16

Earlier quoted context omitted.

Other developed countries have price controls (more specifically, government negotiated prices) and it seems to be working well for them.

> government negotiated prices That's what we don't have in the US. You can certain make the case that we should, but that's a separate argument. Now we have a situation where we have a flat out price control, and it's going to have unintended consequences written all over it. All these arguments for "look at Europe" doesn't fly in health economics. There are not subtle differences in the US legally, infrastructurall…

Along similar lines, I read a study nearly twenty years ago and I wish I could find it for these very recurring government vs market debates. The study evaluated prices between single payer countries and found that it wasn’t the collective bargaining that reduced prices in those countries. They observed that there was no correlation between the size of the single payer and pricing. Rather, it was that the pharma adjusted price to minimize counterfeiting and black markets. In countries where black markets and counterfeiting risks were high, the price was lower. Ironically the decision to lower gave some single payers added incentive to participate in arbitrage. One country would be so low the country itself decided they could arbitrage their Higher priced neighbors by selling off their excess through undisclosed side deals. You see a variant of this example playing out between Canada and US. The article talked about individual black markets and state backed black markets that would emerge as a result of these single payer deals... which were supposed to be confidential but of course the black markets allowed pricing information to leak causing everyone to demand lower prices... everywhere except the US which essentially subsidized all of these below market deals that give the appearance that collective bargaining is superior.

Edit: another thought comes to mind - has anyone compared the size of health insurers in the US and compared their purchasing power to government run single payers? I’d hazard a guess that United Health for example probably dwarfs entire single payers of some governments.

Re: Illinois governor signs law capping insulin costs at $100 per month

#125

Post by dehrmann »

Someone1234 wrote: post #8

I'm really past the whole "pharma need to charge high prices to fund research" line of argument. Aside from being factually untrue (research funding is dwarfed by marketing for example[0]), it is also arguing for a continued unhealthy relationship with pharmaceutical care. A large amount of research is currently publicly funded. Either via public academic research or directly. When that research bears fruit it is oft…

> When [publicly funded] research bears fruit it is often given away almost at-cost

Publicly funded research should be given away, royalty-free, to the public. Universities aren't in the business of...business.

Re: Illinois governor signs law capping insulin costs at $100 per month

#126

Post by zentiggr »

amluto wrote: post #105
Someone1234 wrote: post #8

I'm really past the whole "pharma need to charge high prices to fund research" line of argument. Aside from being factually untrue (research funding is dwarfed by marketing for example[0]), it is also arguing for a continued unhealthy relationship with pharmaceutical care. A large amount of research is currently publicly funded. Either via public academic research or directly. When that research bears fruit it is oft…

This whole cost plus percentage model doesn’t work — it encourages people to drive up costs to increase profit. I see no reason that pharma manufacturing can’t be done just regular contract manufacturing. The Zika vaccine is a prime example. The US developed the ZIPV vaccine at public expense, and then, for some mind boggling reason, they offered an exclusive license to Sanofi. Imagine if Apple outsourced iPhone manu…

> for some mind boggling reason,

What, never seen corruption at work? Somebody at Sanofi, or connected to them, was connected elsewhere, and hey, there's your license :) (No, no cash payment.... but my kid really wanted to get into Harvard, maybe a limited endowment/scholarship? You know somebody, right?)

We humans are predictable.

Re: Illinois governor signs law capping insulin costs at $100 per month

#127

Post by zip1234 »

fjp wrote: post #60
toomuchtodo wrote: post #38

Earlier quoted context omitted.

I don’t demand my roads, libraries, or other public goods turn a profit. I wouldn’t demand the same of public pharma research (NIH, DARPA). Perhaps the market is not designed for this sort of endeavor (drug research). Let government stand in where the market has failed.

"Markets" are poorly designed for health care/research investment in general. Just like roads, education, general science research, etc... It just doesn't play well with being largely run with a profit motive. That's not to say there's on place for the private sector there, but there is massive friction between a profit motive in drug research and you know, building a more healthy society. See the "new Adderalls" lik…

Competition is what drives down costs in a market. If costs are going out of control, perhaps there is something in the current system that is preventing competition? Lack of price transparency?

Re: Illinois governor signs law capping insulin costs at $100 per month

#128

Post by nodesocket »

petschge wrote: post #115
nodesocket wrote: post #84

Earlier quoted context omitted.

My mother has diabetes and pays quite a bit for her insulin in California. I however am not sure government enforced price caps are the way to go. Today, people neglect to factor in the law of unintended consequences, and instead stand on a pedestal of moral superiority argument. What happens if price caps do reduce research. It’s no coincidence that the US has the best pharma companies and develops some of the most…

Ah, yes. The famous American pharma companies Roche, Novartis, Bayer, GlaxoSmithKline and Sanofil come to mind...

Yes... Johnson & Johnson, Pfizer, AbbVie, Bristol-Myers Squibb, Eli Lilly, Biogen, Abbott, the list goes on and on.

Re: Illinois governor signs law capping insulin costs at $100 per month

#129

Post by alexmingoia »

Patents are the problem, not the market. Patents are government protectionism. They are a government imposed monopoly — a government imposed cap on supply.

In a free society and a free market, anyone with the knowledge and means to produce insulins would be free to do that.

The high prices are a direct result of the government preventing competition through patent law. Without patents, the price would tend to fall as companies compete on price, more efficient manufacturing, distribution, etc.

Re: Illinois governor signs law capping insulin costs at $100 per month

#130

Post by snapetom »

Someone1234 wrote: post #8

I'm really past the whole "pharma need to charge high prices to fund research" line of argument. Aside from being factually untrue (research funding is dwarfed by marketing for example[0]), it is also arguing for a continued unhealthy relationship with pharmaceutical care. A large amount of research is currently publicly funded. Either via public academic research or directly. When that research bears fruit it is oft…

Do you have historical data? Because in the BBC article, it mentions patents, and how drug companies have a limited number of time to make up profits. The article states drug companies have 10 years to make it up, but I think that's even shorter in the US. I was taught in my health econ class that it's 5 years in the US simply because of the FDA approval process.

R&D money spent is cyclical, and GlobalData's report may just be a down cycle where pharma is just trying to recoup past R&D costs. There's also a large number of drugs that are not approved from past years. Pharma has to recoup those costs, too.

From purely a health econ standpoint, that recovery window offered by the patent system is the main reason we are where we are today.

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