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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

#31

Post by rootusrootus »

mytailorisrich wrote: post #19
save_ferris wrote: post #5

Earlier quoted context omitted.

How will people lose their insulin over this?

If the law simply prevents prices higher than $100 in Illinois then manufacturers and distributors might stop selling in the state or only take orders from the state if they have surplus. Either of which might hit availability in the state, especially if the industry tries to make an example out of this. I guess it also depends on the profit margin at that price and how it compares with the "market price". Edit: Care…

> if the industry tries to make an example out of this

Maybe we would all be better off in the long term if they did. Probably wouldn't work out great for them, however.

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

#32

Post by andrewla »

I don't know why new outlets make the actual factual information for these things so difficult to find. Can't they include the bill number or link to the bill itself? The actual bill text is here [1] and the record leading up to its passage is here [2].

[1] http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name...

[2] http://www.ilga.gov/legislation/BillStatus.asp?DocNum=667&GA...

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

#33

Post by amluto »

ikeboy wrote: post #21
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…

You're looking at the wrong data. You need to look at return on capital. Right now the return on capital in pharma is below the cost of capital and it's trending towards zero. The inevitable result is significantly lower funding for research. https://endpts.com/pharmas-broken-business-model-an-industry...

This suggests that something is very wrong with the market. The costs of development and production (even ignoring failures) are way below revenue, which means that return on capital should be very positive. Somehow most of the money is going into overhead. One might debate whether the overhead constitutes corruption, but it should be able to be reduced.

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

#34

Post by [deleted] »

aplummer wrote: post #30
toomuchtodo wrote: post #22

Earlier quoted context omitted.

Insulin is a generic. No one is required to be compensated. Pharma had their chance to be reasonable. That time has passed. Not to say that we shouldn’t appropriate intellectual property when necessary (eminent domain or not respecting a patent, as has happened in India and Canada), it’s just not necessary in this case. That doesn’t make us Venezuela, that makes us pragmatic.

The inventor gave the patent away for $1 because it would have been unethical to profit from it. That’s still true.

[deleted]

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

#35

Post by JumpCrisscross »

ceejayoz wrote: post #18
jerf wrote: post #14

Earlier quoted context omitted.

If you can only charge $100, but it costs $110, what happens isn't that it gets sold at $100 anyhow. What happens is that it doesn't get sold. Nobody has an obligation to manufacture insulin. I'm not saying the costs are $110. I don't know. I'm just explaining why this can result in lost insulin.

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…

> It doesn't cost anywhere near $100 to produce a month's supply

Is the $100 indexed to inflation?

Separately, this is a supply-side problem. Why can’t I start a business that manufactures insulin while selling it at a reduced—but profitable—margin? Those barriers to entry are a fundamental issue.

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

#36

Post by pjc50 »

slowhand09 wrote: post #13
sorrymate wrote: post #2

Best line in the very short article “Health care is a right for all, not a privilege and that is why I am so proud that we created an insulin price cap that successfully puts patients above profit,” according to Gov. JB Pritzker.

So the next step is to nationalize the facility that manufactures it, the testing of it, the distribution of it. All taxpayers will pay for it. And the ubiquitous govt will have to compensate the drug companies for the taking of their intellectual property. Welcome to Venezuela.

The original development of insulin was nearly 100 years ago, so the patent has expired, and in any case was donated to the public good: https://www.treehugger.com/health/inventors-insulin-sold-the...

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

#37

Post by stochastician »

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…

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? What might be the downsides to the proposed approach ? Do we think this would result in reduced innovation? In fewer potential cures?

[1] https://blogs.sciencemag.org/pipeline/archives/2019/05/28/wh... [2] https://blogs.sciencemag.org/pipeline/archives/2014/11/11/ma...

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

#38

Post by toomuchtodo »

amluto wrote: post #33
ikeboy wrote: post #21

Earlier quoted context omitted.

You're looking at the wrong data. You need to look at return on capital. Right now the return on capital in pharma is below the cost of capital and it's trending towards zero. The inevitable result is significantly lower funding for research. https://endpts.com/pharmas-broken-business-model-an-industry...

This suggests that something is very wrong with the market. The costs of development and production (even ignoring failures) are way below revenue, which means that return on capital should be very positive. Somehow most of the money is going into overhead. One might debate whether the overhead constitutes corruption, but it should be able to be reduced.

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.

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

#39

Post by cjfd »

It may very well be quite true that the price of insulin is too high but price controls really are not that great. If the price now is to high, $100 probably still is too high. Also, in the more general case (not for insulin, obviously) pharma does need to recover its research costs and who is going to say what is a good price and what not. You know, capitalism actually kind of works and price controls just don't.

There actually is a capitalist solution to the problem of high medicine prices. That is for pharma companies to have to post a price of their patents. And when somebody is willing to pay that price they do get the patent for exactly that price. After that you tax the value of the patents at a somewhat high percentage. This way, if the price of the medicine is to high relative to the posted value the state or perhaps the insurance companies could just buy the patent. On the other hand if the price of the patent is too high relative to the price of the medicine there is no real problem. In the case where both are too high but it is not the case that one is higher than the other the state should just funnel the money that comes in through the tax back to whoever needs to buy the medicine at a the high price.

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

#40

Post by tenebrisalietum »

gruez wrote: post #16
outlace wrote: post #7

Has there ever been a price control experiment that hasn't resulted in even worse problems?

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

That's not really a price control, that's buyer control - collective bargaining reduces the number of buyers of X but not the amount of X demanded.
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