Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

nbc15.com

Post reply on HN
Print view View original

41–50 of 422 posts

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

#41

Post by ceejayoz »

JumpCrisscross wrote: post #35
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…

> 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.

"Is the $100 indexed to inflation?"

> In 2009, the list price for a 10-milliliter vial of Humalog, a fast-acting insulin made by Eli Lilly, was about $93. Today it costs closer to $275. Similarly, Novo Nordisk's fast-acting insulin Novolog cost almost $93 for a 10-milliliter vial in 2009. Today, it costs about $290. - https://www.businessinsider.com/insulin-price-increased-last...

If you've got any evidence that the inflation rate between 2009 and 2019 was 300%, I'd love to see it.

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

#42

Post by ptah »

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…

> research funding is dwarfed by marketing for example

i really believe pharma advertising should be banned

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

#43

Post by ikeboy »

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.

When it costs billions to develop a new drug due to onerous testing regulations, that's what happens.

Ultimately returns in every industry tend towards zero. If we made it cheaper to develop new drugs it would extend the lifespan of the industry somewhat but not indefinitely. At some point diminishing returns take over and investment must go down.

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

#44

Post by jerf »

theandrewbailey wrote: post #26
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.

Manufacturers that can't (or won't) sell a month's worth of insulin for $100 will be replaced by those who can.

You misunderstand. I'm not saying "If the manufacturers decide it costs $110". I mean, if it costs $110. You can't force someone to create things at $110 and sell them at $100... or at least, you can't for very long.

Others are observing that the current prices are not currently anywhere near $100. That's completely unrelated to what I'm explaining.

I'd also point out that is a temporary fact, not a permanent fact. If, let's say, in two months the Coronavirus has mutated into a mark 2.0 and is sweeping through Illinois [1], getting insulin may become much more expensive due to all the measures needed to prevent spread of infection. If it becomes more than $100 worth of expensive, it's going to be difficult to distribute. There can be supply disruptions due to source contamination, whoknows what else. Even if today this seems like a generous cap, an inflexible cap can still be a problem tomorrow.

Of course, the last few years being what they are in online discourse, a large number of you will be inclined to read this as a defense of high prices, rather than what it actually is, which is an observation that price fixing has certain effects and that we don't know the future very reliably. Screwing around with insulin prices just because you can is evil and should be the grounds of a presumptive collusion, oligarchy, or monopoly investigation. But that doesn't mean that fixing the price is a good idea, or going to fix it. Personally I'd suggest getting a few state attorney's together and digging into why the price is so high, with an eye towards criminal charges or anti-trust action, would be much more effective. You might even find that "feels better" than mere price caps. Remove the incentives for people thinking they can get away with this sort of thing scott-free, rather than trying to treat the symptoms far down the pipeline from the root cause.

(Downvoters are invited to consider my replacement suggestion of criminal charges or significant antitrust action before deciding that I'm "defending" anything. This is a silly papering over of the problems by people who ought to have the power to do a lot more.)

[1]: A totally absurd, impossible scenario, of course. https://chicago.cbslocal.com/2020/01/24/first-case-of-corona...

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

#45

Post by RVuRnvbM2e »

outlace wrote: post #7

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

You can read about the results of Australia's 70+ year experiment here: https://www.abc.net.au/news/health/2019-11-25/medicine-costs...

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

#46

Post by nappy-doo »

cjfd wrote: post #39

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. Th…

except it doesn't in this case. Manufacturers keep the price artificially high by continually patenting more and more esoteric parts of the manufacturing of this drug. They then cross license the patents to each other, preventing any third party from joining the marketplace.

Insulin is NOT rocket science, and it's necessary for some people to live. It's almost as simple to make as beer. It is unreasonable that people don't have access to such a simple life saving drug.

Fuck the pharma companies. Fuck the patent system for keeping it this way. Congratulate the legislature who is tackling this problem.

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

#47

Post by snapetom »

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.

> 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, infrastructurally, and culturally.

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

#48

Post by ptah »

jerf wrote: post #14
save_ferris wrote: post #5

Earlier quoted context omitted.

How will people lose their insulin over this?

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.

at $100 a month they would still be making 10x markup

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

#50

Post by toomuchtodo »

ikeboy wrote: post #43
amluto wrote: post #33

Earlier quoted context omitted.

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.

When it costs billions to develop a new drug due to onerous testing regulations, that's what happens. Ultimately returns in every industry tend towards zero. If we made it cheaper to develop new drugs it would extend the lifespan of the industry somewhat but not indefinitely. At some point diminishing returns take over and investment must go down.

How much is spent on marketing in comparison? Only in the US and New Zealand can you market drugs directly to the public. I sense an opportunity to destroy an unnecessary cost.
Post reply on HN