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Turing CEO Defends $750 Pill in Reddit AMA

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Re: Turing CEO Defends $750 Pill in Reddit AMA

#21
post #12

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it any…

> As much as I hate socialism

I think it's funny that people think insurance isn't a (distorted) form of socialism. It's small-scale socialism - you pay into a pool, and those who need resources get it. If you really hated socialism, you wouldn't have any insurance at all.

Re: Turing CEO Defends $750 Pill in Reddit AMA

#22
post #21
post #12

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it any…

> As much as I hate socialism I think it's funny that people think insurance isn't a (distorted) form of socialism. It's small-scale socialism - you pay into a pool, and those who need resources get it. If you really hated socialism, you wouldn't have any insurance at all.

The only funny thing here is that most people who hate socialism just do so because they don't want to pay taxes.

Re: Turing CEO Defends $750 Pill in Reddit AMA

#23
post #14
post #12

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it any…

What does this have to do with socialism? How does drug companies charging for an arm and a leg or insurance companies paying for it and raising premiums relate to socialism?

Because single-payer systems have enough bargaining power to get much better deals from drug companies both theoretically and empirically. A few years ago when I was taking a health care policy class and actually looking through the stats, drugs cost ~2X in the US vs G20 averages. Not sure what it is now, but I would be very surprised if it had shrunk.

It's one of the reasons for this:

https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...

Others: having one predominant type of insurance nationwide cuts down on administrative costs (figuring out different plans costs consumers and hospitals money, these costs aren't minimized by competition), the cost of 1/sqrt(n) risk, and "bandwagon" risk (if a market plan is particularly advantageous for any given group of people, those people all sign up and "sink the ship," whereas national boundaries largely prevent such movement).

Re: Turing CEO Defends $750 Pill in Reddit AMA

#24
post #12

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it any…

> As much as I hate socialism, the only solution appears to be Single Payer.

The problem is, "How do we establish a market that provides medication to patients who may not be able to afford it while still generating enough profit to allow research and development of new drugs 10 years from now?"

Establishing a monopsony doesn't actually solve this problem. It changes the flow of money slightly[0], but it doesn't actually solve the fundamental problem: in the aggregate, R&D costs more than patients are able to provide.

Since we're talking about a national scale, we can't use the argument that adding external money to the system - taxpayer funds - would solve the problem, because the two sets - "Patients" and "Taxpayers" - are the same[1]. The funds are still coming from patients, whether they come in the form of insurance premiums or tax withholdings[2].

[0] but a lot less than most people think! Health insurance in the US already is much more like a monopsony than most people realize.

[1] Technically not exactly the same, but close enough that, economically, they can be treated as one.

[2] One might argue that taxes can vary with income. Aside from the fact that insurance premiums already can (and do) explicitly vary with income, this actually already is the current state: patients on private insurance (and especially the ones with very expensive, luxury health plans) already subsidize patients on public insurance. Changing the system so that we collect these subsidies through tax funds doesn't change the problem (though ironically, it does increase the risk that those funds will be diverted to other government budgets).

Re: Turing CEO Defends $750 Pill in Reddit AMA

#26
post #12

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it any…

> As much as I hate socialism, the only solution appears to be Single Payer. The problem is, "How do we establish a market that provides medication to patients who may not be able to afford it while still generating enough profit to allow research and development of new drugs 10 years from now?" Establishing a monopsony doesn't actually solve this problem. It changes the flow of money slightly[0], but it doesn't actu…

If the US bargained with drug companies on more even footing with other countries, we might not get stuck footing such a disproportionate fraction of the bill (R&D and otherwise).

> Health insurance in the US already is much more like a monopsony than most people realize.

Dead wrong, Medicare part D is hobbled so that the US is not even close to being a half-monopsony, let alone a full monopsony, in the drug market.

> in the aggregate, R&D costs more than patients are able to provide.

R&D is 10-20% of a typical pharma co's budget. Eroom's law says that in the limit you're correct (until we get over the genetic engineering bump), but there's plenty of room to speculate about constant factors. The pharma business is notoriously infested with rent-seeking shenanigans. See: OP.

Re: Turing CEO Defends $750 Pill in Reddit AMA

#27
post #12

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it any…

> As much as I hate socialism, the only solution appears to be Single Payer. The problem is, "How do we establish a market that provides medication to patients who may not be able to afford it while still generating enough profit to allow research and development of new drugs 10 years from now?" Establishing a monopsony doesn't actually solve this problem. It changes the flow of money slightly[0], but it doesn't actu…

Why do we have to establish a market?

Re: Turing CEO Defends $750 Pill in Reddit AMA

#28
post #17
post #12

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it any…

Drug costs are ~10% of total healthcare costs in the US. Are drug prices a problem? Yes. Are they the main cause of our outrageous healthcare spending? No.

How does that compare to each other little area of spending? If you have 100+ categories of spending to look at, 10% of the market in a single spending area can be some pretty low hanging fruit.

Re: Turing CEO Defends $750 Pill in Reddit AMA

#30
post #12

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it any…

I probably hate Socialism more than you do but I've come to accept that Single Payer is probably the only thing that allows your population to not to succumb to insane debts for just living.

I've also looked at https://en.wikipedia.org/wiki/Healthcare_in_Singapore

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