That $56,000 Drug? Blame Medicare
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Even if you zoom in on the few countries most people are talking about when they say "the rest of the world," there's still a tons of issues present, a lot of which are directly a result of the system that they chose to utilize. This is an issue with a lot of nuance and I wish people wouldn't make such reductive statements like this.
I find this argument not only provably less relevant than the poster thinks is is, but also it's not much different from dying as you can't afford to pay even the copay for your cancer treatment. The USA can't even sort out decent healthcare for children, who haven't yet had the opportunity to get a job to pay for their healthcare.
No healthcare system is perfect but that's not a reason to not seek something better, fairer and more efficient.
Sure, the US system isn't perfect by any means, but one reason why it's so expensive is they throw everything plus the kitchen sink at patients. And this is even for Medicaid which covers the poorest Americans.
Having lived in 4 different country with 4 different healthcare systems, if I got diagnosed with a serious cancer you can damn well be sure I'll get treated in the US. I have a friend who got diagnosed with breast cancer who did the same, moved back to the US and with ACA subsidies was getting the latest therapies with a monthly premium of $200. And the drugs she received weren't even paid for in her home country.
I genuienly don't think that's as common as you think it is.
Anecdote time: when my dad was diagnosed with GIST in Poland(you know, not a very wealthy country), his prognosis was about 6-12 months if lucky. But the doctors at the oncology unit knew that the drug Glivec was being approved against GIST but not yet refunded by the Polish healthcare system. They basically applied and got approved to fund his therapy along with 5 other people(GIST was and remains super rare). The national healthcare system paid for his treatment with Glivec for the next 8 years(until he died), despite the huge cost of the medication.
Like, maybe he was lucky. But again, I think you are misrepresenting the system by saying "doctors won't even try". Sure, maybe some won't. Some will. I've heard similar stories from US where doctors won't order certain medically necessary treatment because they know insurers won't pay for it - it doesn't mean anything in isolation.
And that’s what I’ve observed. Yes, in universal systems you’ll get cancer care, but you’ll get the standard of care from 5-10 years ago. All the while cancer can has advanced by leaps and bounds.
The "everything plus the kitchen sink" approach isn't ideal in all scenarios and the US healthcare system has a high level of overtreatment, often with potentially harmful interventions. It also pushes up the cost for everyone.
However there are economic models that provide for a high level of universal healthcare equal to what the US has now and also cost less than the US spends right now. The difference is that is moves from a combination of clear personal cost and obfuscated public costs, to purely public costs and many in the US seem opposed to that relatively minor shift. It also means the politicians are even more responsible for their society's healthcare and I imagine many of them don't want that responsibility.
https://worldpopulationreview.com/country-rankings/cancer-su...
https://ourworldindata.org/grapher/life-expectancy-vs-gdp-pe...
I’m genuinely curious and realize this is one of those topics that is easy to come across as combative, but please know that’s not my intent.
The reason I ask is that I think roughly 40% of healthcare R&D globally is funded by the U.S. For its size, the U.S. scores relatively high on the access and quality dimensions, but as has been discussed is quite bad at cost. I wonder if the US has optimized for quality and access at the expense of cost.
I have also heard from those in the field that the US effectively subsidizes other countries costs through their R&D and price policies. E.g., other countries may have tight drug price controls and the only way pharma is willing to invest in R&D is because they can make up those profits in America.
It really makes me think all this discussion about one country’s healthcare vs another is myopic. Just like many other aspects of economics, healthcare to a certain extent is a global system.
The healthcare industry has a lot of working parts, all of which require scrutiny, even in these mythical places of which you aspire American healthcare to look like. There's genuinely negative outcomes as a result of the policy decisions everywhere, too.
[0] https://www.sfgate.com/opinion/openforum/article/Why-Canadia...
America's healthcare system is terrible, but socializing it like other countries have done isn't going to solve the problem (root causes include a massive shortage of doctors, a norm of bundling insurance with employment, lack of pricing transparency, partially socialized healthcare, as described in the article, and a system in which it costs a billion dollars to get a drug approved).
Even having an insurance can mean that it will take months to see a specialist.
And universal healthcare doesn't have to mean that there shouldn’t be any private health care. The Nordic countries have solved it this way.
Europe hasn't solved healthcare at all, there's plenty of issues ongoing and developing but the average joe need not worry of going broke due to medical bills so he can focus his life on other things.
Problems of national health systems in other countries are not "globally" visible like insane bills for Americans.
Just go and read up how many British people are nagging about NHS. I expect that there is shitload of corruption in health care in other countries as well but I don't read or speak German or French.
In Poland I heard about case of a doctor that died from overwork, she just collapsed because she was working 3 shifts for a month or something. Don't get me started on emergency crews that are treated like dirt and hired on as B2B contractors.
Well I am not going to get a bill that will ruin me financially but I might end up with no professional health care to help me when I am in trouble because they don't get paid enough and are worked to the ground.
Us British people are nagging about the NHS because we've had 10+ years of a wannabe-GOP running it into the ground in order to stealth-privatise it and bung billions into theirs and their corrupt chums' pockets.
We love the NHS. We don't love austerity and corruption.
Private healthcare also suffers from poor governance (it's one of the big factors in why the United States' healthcare system is so expensive) but its effects aren't quite as drastic.
As an aside, the NHS is indeed flirting with instability right now, but that is due to multiple Tory governments arguably putting policies in place to destabilize and privatize the NHS in the long term. It’s as bizarre as Brexit to me that the British voters are going with it. But there it is.
I don't see that argument as refutation of my argument :)
Because party you don't support is running the system does not mean that when party you support it will get better. I don't believe any party has that much influence over what is happening in health care anyway or is able to fix it.
When you have so many facts demonstrating that government-funded medicine works just fine everywhere else, the only hypothetical worth considering is whether it would work here too.
The rest of your point notwithstanding, this is a statement whose explanation could almost be its own converse -- companies can afford to profitably sell a drug for less than $50k elsewhere in the world because they're allowed to milk the USA money cow (i.e., marginal costs are low, fixed costs are high, and there exists a guaranteed market to cover the fixed costs). Without further evidence that the fixed costs could be covered as well it's entirely plausible that the proposed alternative (that the drug company would exist, make the drug, and sell it for a reasonable price worldwide without further subsidies/intervention) would never come to be.
Such evidence probably exists, but an argument whose truth depends wholly on orthogonal statements isn't worth repeating.
Because it seems to me that the price difference is so large, sometimes by a factor of 10 or more, that it doesn’t seem worth it to bother going through the approval process in any other country and yet pharmaceutical companies do so. So the NPV must be positive even when the price is lower.
I also think if there were drugs that only exist because of high US drug prices that we would hear about them. Proponents of the exorbitant prices would be yelling from the rooftops about some specific miracle compound that was only possible to develop because of their tireless work at finding new and exiting ways to price gouge.
Instead all I hear are these hand wavy arguments about research costs and whatnot. Where’s the beef?
The approval process is O(1%) of the total cost of development.
> I also think if there were drugs that only exist because of high US drug prices that we would hear about them
Maybe. I've grown wary of reading too much into the relative popularity of different phrases and arguments; it turns out people are complicated and prone to prioritizing points you might not care about, and even when those arguments are being made they often get lost in the noise of 8B other people.
Humira probably isn't a bad example in any case (though without being inside a company it's hard to know for sure since you don't know if, e.g., they would have prioritized international approvals and sales if the US market couldn't be lucrative). Total international sales only eclipsed total R&D in the last few years, despite the drug having been around for a couple decades. I personally think the current level of price gouging for Humira in the US is excessive, but AbbVie would also have had to take a loss on it for nearly 20yrs without some level of price gouging somewhere.
[1] https://www.biopharmadive.com/news/new-drug-cost-research-de...
I genuinely don't know what people want here - drugs aren't magically summoned into existence for free. If you want new drugs, someone has to cover the cost and the prices that the non-US world pays aren't nearly high enough to do that. You could lower the prices for Americans, but only if you simultaneously increase the prices for everyone else, too.
> Altruistic enough to...
There's no altruism involved. US consumers are willing to pay those prices (inelastic demand), and companies are able to charge them (lack of competition, legal barriers). Predicated on that fact, marginally it's also profitable to manufacture for other countries as well, but if the rest of the world didn't exist you'd still expect to see the current behavior.
The only solution is public healthcare and unfucked voting systems. Say it to yourself until you get it.
Don't get me wrong, markers are good for some things, but healthcare is not among them.
> unfucked voting systems
What system would you propose?
Considering our voting systems have only tended more toward 'fucked' over time, how do you propose we ever get to 'unfucked' voting systems when we are held fast by 'fucked' ones?
Representative ( or mixed representative with preferential, where you vote for a party list and for a person specifically who gets ahead) is much better, and would certainly alleviate many of the US political system's issues ( like the immediate politicisation of every issue among party lines)
Even the most unscrupulous of politicians should recognize that a few thousand dollars in campaign contributions and front row tickets to a college football game isn't a fair trade for handing pharmaceutical companies a blank check from an account with effectively infinite money. What happens is that the lobbyist butters the politician up and sounds smart, so the politician just listens to whatever the lobbyist is saying.
the vibrancy of the health care in the United States is not the issue. by all economic measures, the health care market is incredibly vibrant and profitable. there are numerous companies that exist in each state, and dozens of options to choose from nationally. the problem is that there is a market for medical supplies which the government does not strictly limit and control, and multiple perverse profit layers which should not exist. your health care provider is not incentivized to help you, only exploit as much cash out of healthy people as possible while ensuring their "losses" (paying for those who are ill) are minimized. under a free market health care system where the goal is profit, this will always be the case
There are websites that lay it all out, but not many people bother to do our homework, including myself.
I have heard the insurance industry lobbiests, and not just medical insurance, pretty much control my state (California).
There was an interesting article on HN yesterday about the failure of nation building in Afganistan https://news.ycombinator.com/item?id=28271799
Of those only a democratic government at least has the theory of responding to those governed. Either forms tend to be a hierarchical application of power with few checks.
No, no I don't think I will.
Most shameless propaganda headline since "Don't blame Blackrock for the housing crisis, blame your neighbors."
And as side note, lobbying is not a bad word. Anyone who vouches for, or on behalf of one's interests before government is a lobbyist by definition. That goes for John Q Public as much as it does for Blackrock.
Only people who you could blame are lawmakers. They are the people with real power and your interest representatives.
Our PBS, the Pharmaceutical Benefits Scheme, which subsidizes drugs, is similar to the UK's NICE, which evaluates drugs to compare their price to the effectiveness in terms of QALY (Quality Adjusted Life Years) and other metrics.
The PBS then negotiates with the drug manufacturer, who either meet the government's price, or don't. If they don't, then the drug is not subsidized. So it's in the manufacturer's interest to get a large purchaser to buy the drug.
So then I should be blaming the people setting the high price, as they're choosing to do this.
Not the source I usually use for this but,
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
I never understood this point. If there is a legal requirement to maximize profit, CEOs should be legally required to have low compensations so as to maximize profit. But that is not the case. Why "maximize profit" does not apply to wasteful hyper paid CEOs?
Worse even. Most companies reduce profits by moving them to other countries with lower taxes. Would not that be against the law?
They have a fiduciary duty to shareholders. That just means they have to act honestly, fairly, and always in the best interest of the shareholders. That's not at all the same thing as a duty to "maximize returns".
SEC went after him for show.
Not one law was enacted to prevent another greedy entity from doing the same thing.
(I don't even blame the guy. Everything he did with that drug was legal. I do blame politicians whom did nothing to stop the greed afterwards. I really think most of these old coots on both sides actually believe totally free market medicine will save them one day from old age.)
https://medium.com/bull-market/there-is-no-effective-fiducia...
Say a company exists that doesn’t aggressively pursue profits. It makes $1/year and is worth $10 per share. If it started maxing profits it could make $2/year and be worth $20/share. An activist can come in and continue to pay well above market price, knowing that once he acquires enough shares, he’ll replace the board and raise the value of the shares.
The simple logic is that almost every public company will eventually evolve to maximize profit regardless of what other social mission they advertise. The sole exception is if a founder retains control of a very large proportion of voting stock.
Medicare is driving up prices by… paying market rate?
This reasoning seems to imply that Medicare somehow has the ability to time travel backwards and influence the choices of drug companies and private insurance to inflate prices which they then agree to pay. It literally implies that Medicare reacting to private market is exactly the same thing as controlling the private market. This strikes me as completely incomprehensible at best and a nakedly bad faith attack on Medicare at worst
From an economics perspective the demand curve is inelastic. Medicare will pay whatever the price is as long as there is one other buyer paying that price.
In the US, healthcare is addicted to new technologies even if they improve outcomes by 0.01% while being 10x more expensive.
Almost every metric for the quality of healthcare outcomes in the US is worse than most european countries. For example, if you sort the under 5 mortality rate [0], you'll see that the United States comes in 47th, after Cuba, Russia, Qatar, and basically all of western europe.
If you check life expectancy, you'll find similar subpar numbers. Ditto for infant mortality.
You can easily argue that life expectancy is partly lifestyle based (the fast food industry killing us rather than healthcare), but for infant mortality and under-5 mortality, those numbers should track quite well with the quality of our medical system I think. And those numbers, well, our medical system is obviously doing quite poorly compared to other countries that spend far less.
[0]: https://en.wikipedia.org/wiki/List_of_countries_by_infant_an...
https://www.nytimes.com/2021/07/19/health/alzheimers-drug-ad...
1 Personal opinion: This may be a recurring pattern we can see in other industries, too. Look for a situation where the customer cannot afford the product so the seller relies on the government, i.e., the taxpayer, to help the customer pay. One recent example is the steady rise in university tuition, student lending and now the student debt crisis.
It doesn't say Medicare has decided to cover it yet, it's under review.
And only some privately administered Medicare plans have decided to cover it.
Some hospital systems are doubting the efficacy and refuse to administer it.
No doubt, it's a huge market. But the fact that it's a monthly infusion makes it a tough proposition.
Sovaldi was a miracle drug, priced like a Bentley. This drug is no miracle drug, but they priced it like one.
Can someone with more familiarity explain why some drugs need to be “administered by physicians”? Why can’t patients self administer or why can’t a less expensive job role be imagined for a simple 5 minute visit for drugs administered in an outpatient setting?
Also, for regular drugs and prescriptions, why are doctors involved at all and why does the FDA regulate access to them, creating time and cost barriers? I feel like much of the time, my physician or a physician’s assistant aren’t providing any useful diagnosis or guidance toward a prescription that I couldn’t have figured out myself. The gatekeeping almost always is frustrating because I get no value out of them. I’m especially annoyed since some of the drugs I’ve been prescribed aren’t even controlled in the EU but are in the US.
There is no need, this is purely regulatory capture at work.
> Why can’t patients self administer
Probably because it's expensive to make and the potential for abuse is very high.
> why can’t a less expensive job role be imagined for a simple 5 minute visit for drugs administered in an outpatient setting?
We do have a "less expensive" job role. There are nurse practitioners who could be doing the vast majority of work that we have doctors doing right now with significantly less training with basically no downsides other than to doctors, whose value would plummet. Granted, doctors in the United States are probably way overcompensated as a result of the regulations in place. In Great Britain, being a physician isn't nearly as lucrative (though it's also less time consuming/expensive to become one).
> Also, for regular drugs and prescriptions, why are doctors involved at all and why does the FDA regulate access to them, creating time and cost barriers?
Probably to prevent public health crises like the opium epidemic, though, you'll notice, this happened despite the best efforts of the government to prevent it. Gating access to drugs is largely to prevent abuse, though maybe there should be reform with regards to how we control access to these. Should I need to go to a doctor or could I just get a recommendation from a Pharmacist? Maybe we could designate a class of drugs acceptable for Nurse practitioners to prescribe. Maybe most drugs should just be available over the counter? The way we categorize drugs is probably too restrictive, though it isn't the primary reason drug prices are driven up.
> I feel like much of the time, my physician or a physician’s assistant aren’t providing any useful diagnosis or guidance toward a prescription that I couldn’t have figured out myself. The gatekeeping almost always is frustrating because I get no value out of them.
Any time a doctor comes to a different conclusion from me, despite me knowing my own body better than she does and doing plenty of my own research, obviously I'm going to be frustrated. I might even be right. But that doesn't mean that I'm generally going to be right more often than they are. I think you're probably overestimating your own abilities while discrediting the capabilities of your doctors here because doctors don't always do what you want.
Would people be willing to pool capital to pursue FDA approval?
Would other countries still get low prices?
This isn't an argument for anything so I don't need rhetorical unrelated comparisons, I’m wondering if this has been evaluated and studied, or maybe if there were case studies from prior time periods or other countries
As an Austrian I don't know what my meds cost. I pay a flat fee of 6 Euros per package at the drugstore if I have a prescription. And I can't get my main ones without one.
You might pay 6 euros per package, but that could be a 50 euro drug. The 44 euro difference is being made up through your nationalized healthcare.
If by and large, most of the drugs are reasonably priced, then a flat fee structure of 6 euros is possible, because it's small enough sum that it could easily be paid by other people who is paying into the pool, but not using the healthcare service.
In fact, up until 15-20 years ago, it was common for American health plans to have flat fee of $5-$10 for most drugs.
That went straight out the window with emergence of more expensive medications that costs tens of thousands of dollars per patient per year, which completely skewed the average price of medications, and flat fee of $5-10 became unsustainable.
Nowadays, $25-30 is the norm depending on your plan, and if your plan covers it. $50-100 is common if you insist on taking medications for which there are cheaper alternatives.
And yes, Medicare can negotiate drug prices through Part D or take discounts by fiat through Part B.
I know the bill has been out there forever, but it's far from being enacted.
Big Pharma is so deeply entrenched that Trump couldn't even make any headway with "favored nations" domestic pricing that he proposed. It makes sense: I, a freelancer, for instance, can't charge my larger clients more because of such a clause.
And whatever drugs he did make cheaper (insulin, epi pens), Biden restored the pricing on almost immediately after taking office. Read the fact checks, they bury this particular lede really, really well, so you'll have to read very carefully, much like I used to read Pravda when I was a kid in the USSR.