Robin Feldman on Drugs, Money, and Secret Handshakes – EconTalk

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2 pointsp_roz2 comments

This episode discusses the incentive structure of insurance companies, drug companies, and other middlemen driving up the price of drugs.

The patent system with respect to drugs is a mess. The proliferation of secondary patents on established drugs has to be done away with. Drugs are expensive not because they’re any better, but because of monopolies gained through abuse of patents.

The 80/20 rule on insurance company profits also has a perverse effect. The only way for insurance companies to earn bigger profits is by increasing costs. If they try to save money for their customers, they would be forced to earn less.

In my opinion, the system needs less tinkering by government and more control by individuals over their own care.

Excellent episode! It really highlights the nuanced nature of the industry as it stands, with the incentive structure defined by employer-provided health insurance, the patent system, and the "PBM" middlemen.

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