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Comment by _v7gu | Hacker News Reader

This situation has nothing to do with "free markets". The problem is the horribly high price of entry enabling the incumbents to have monopoly power over the market. Giving the control of the prices to the government does nothing to solve the problem, it only adds a level of indirection. Pharma companies are still going to rally for the price increases and the prices will continue going up as much as the politicians can get away with it.

The real solution is lowering the barriers of entry, or at least allowing people to import drugs from a select number of countries. Then the markups will start tumbling down to reasonable levels.

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The root cause is that developing new drugs is horribly expensive. And we can't really make it cheaper without compromising ethics and safety. And it is always getting worse since every new drug has to be better than everything that came out before it, and provably so.

The early days of modern scientific medicine when we found miracle drug after miracle drug are gone. The low hanging fruits have been picked, what remains now is hard word.

So every solution that just involve paying less is not a good solution. Labs need the money. The real solution? Sorry, I don't have it. If it was so easy that a random guy like me could find it, it wouldn't be a problem.

There are certainly inefficiencies. Maybe something can be done to limit the tendency of the pharmaceutical industry to focus on producing marginally better drugs for the sole purpose of renewing patents. With well thought out reforms, we can make things better, but just like with the drugs themselves, it is hard work.

I’m pretty sure a lot of the “hard work” is figuring out how to pay the ever inflating golden parachutes for the executives. Pharmaceuticals are churning out bigger and bigger profits.

A lot of our health problems are solvable. We just don’t want to because there’s more money to be made when people’s lives are on the line.

When you are poor and have trouble paying for the ever increasing whatever, it is easy to point out the lavish lifestyle of top executives. But while it's true that you are paying for the CEO's yacht, it represents only a small part of the bill. For the most parts, you are paying for the wages of people just like you. Top executives pay is in the millions, but the company revenue is in the billions.

Even though I don't share this point of view, I understand that the idea of making the CEO miserable can be compelling. However, it wont affect the bill that much.

Generally, limiting the abuse by top management has to be part of the plan, but it can't be the whole plan. It is not even a good starting point.

The real solution is a single major social healthcare program, throughout all the states paid for by federal taxes.

A single major provider of healthcare will have better negotiating powers than the multitude of hospitals and insurance programs as is at the moment.

Of course, with it being federally funded, the health system will be wanting to keep costs down. Congress can help this by forcing bad actors to behave ethically by removing their licenses to operate, and stripping them of their patents. Something other governments have done in the past.

However, in the US, you have a president that sides against the people, and for big pharma. https://www.bbc.co.uk/news/business-44087735

Two things:

1) The largest private insurers in the US cover more people than many single payer countries, like Canada for example. They don’t get better prices.

2) As someone who works in the drug industry, Trump is actually the first President in recent history that is freaking out the pharma companies. His “international price referencing” proposal is being taken very seriously as it would have very negative consequences.

They don't get better prices because they are operating in a system where access to key drugs is a key differentiator. Penny pinching on access drugs (as does NICE in the UK on behalf of the NHS) wouldn't be a good look for an insurance company as they pitch for your business. The only way negotiations with Pharma companies will work is is you actually refuse to pay over-inflated prices, again as-does NICE. And the only way this can be justified is to have a centrally mandated $ per unit 'utility' (aka QALY) beyond which you won't pay.

Private insurers aren't motivated to do any of this because high drug prices don't hurt their bottom line.

I agree with your first point. Having talked to a number of pharmacy directors at private insurers, there is a huge amount of pressure to cover all drugs, regardless of the price.

Insurers who say “no” (Aetna) is a good example, quickly lose customers to insurers who say “yes”.

He’ll, even Medicaid and Medicare at home flack for not having a drug on their formulary.

Very unlike other countries.

”The largest private insurers in the US cover more people than many single payer countries, like Canada for example. They don’t get better prices.”

I don’t think they really care about prices as long as they can pass them on through higher premiums.

Just to add to the other comments to your reply.

Dealing with a nation's major provider is very different to insurance companies. As I said, if you try to price gouge then they governing body will take what they need as a matter of national security/public health safety.

Then the drug companies pony up to the politicians who allow for the huge ever increasing expenditures and because nobody really sees the bills, nobody really cares and the tax rates and national debt only climb higher.

Incumbents have a monopoly because of safety regulatory controls inherent to the market, not "indirection".

Companies that have the capital to invest into 15 years of clinical trials are going to dominate the market.

Rather the lowering safety regulations for pharmaceuticals, a better solution would be to offer funding, grants, loans or to use capital redistribution mechanisms for helping new market entrants in drug research. This lowers the monopolistic barrier to entry while still retaining the necessary level of quality.

You can recognize that at some point safety regulations would cause more harm in their implementation than they would be in their intended effect, right? If so, who is to say that is not already currently the case?

See https://www.forbes.com/sites/timworstall/2017/06/04/milton-f... and the video in it. It lays out how "single payer care" is only a natural conclusion if you start with a hugely distorted market.

My point is not that safety needs to be increased to the maximum. It's assumed the current level of safety takes into consideration existing market signals and the economic trade-off of diminishing returns.

My point is that trading safety simply to solve the barrier to entry problem has a dangerous cost/benefit trade-off, especially when it is not the only way to solve the problem.

>It's assumed the current level of safety takes into consideration existing market signals and the economic trade-off of diminishing returns.

Considering the current pharma market and everyone's assumption it's distorted I think this needs a pretty airtight defense. Everyone is aware of the tradeoff, but countries like India, where drugs are easier to bring to market and more drugs are available OTC, has great healthcare outcomes for its poorest citizens.

Market availability isn't the same as OTC distribution though.

The expensive clinical regulations that creates barriers to entry for the market and leads to monopolistic incumbents is not the same to being able to buy the good with or without an prescription.

The latter is tied more to remuneration from insurance companies - i.e. private insurance companies that are incentivized to not pay for prescriptions are more willing to only pay when care providers specifically order it.

Yes, yes, I know. But so many drugs requiring a prescription in the US is a market distortion similar to the high cost of bringing drugs to market. It reduces the availability of life saving medicines to people while attempting to minimize other dangers that are likely overstated. Frankly it seems like something doctors lobbied for to ensure a steady stream of office visits.

Doubtful. Doctors are incentivized to not have to write prescriptions, because it legally shifts the liability (and malpractice claims) to them.

Whether they prescribe it or not is irrelevant, you still need to pay to ask them. Doctors are risk averse for that reason, among others, and most people I know loathe going to them because they never actually try to treat the problem.

> India has great healthcare outcomes for its poorest citizens.

Does it? Why does the life expectancy at birth (68-69) trail the US (76-81) by so much then? That's an average across the country; presumably the poor in India have even lower than that average.

The country is massive and much of it is in poverty, this is looking at improvements relative to other similarly disadvantaged areas.

At no point would all additional safety regulations, on the margin, uniformly make things worse. So I don't think the binary question of whether this "is not already current the case" makes sense.

Seems like a solution to me.

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