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Comment by tnorthcutt | Hacker News Reader

This article, and discussion here, seem to both assume people pay the list price. In reality, is that the case very often, especially with this kind of drug?

> Indocin's list price (what uninsured patients would pay) was $198 for 30 suppositories in 2008.

I would not be surprised if they've hiked the list price a ton to game the insurance "what we'll pay" formulas and get more money from insurance companies. As trimbo notes [0], if everyone is paying list price then only 225 people are using this drug consistently. That seems unlikely.

[0]: https://news.ycombinator.com/item?id=28905920

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Another interpretation: the biggest beneficiaries of high list prices are the insurance companies. After all, they don't pay that price, and the higher the non-insured price, the more attractive it is to buy health insurance.

So perhaps the drug companies are just responding to demand from their biggest customers.

Also remember that insurance companies make a profit on margins, so they are directly incentivized to make healthcare transactions larger.

Shouldn't this be illegal / isn't this already illegal?

Two companies reaching an agreement to supply products at reduced price, but not making the terms of that agreement available to a third entity (uninsured customers)?

If you carefully craft all incentives to create the strong impulse in all participants to do things everyone benefits from without actually phoning them up and saying (let's do it this way), it's not illegal. This describes the why for a lot that is wrong with the world.

It's definitely not illegal in general to charge different prices to different customers, or to keep the terms of your business agreements private.

As for "should it be illegal", most people seem to agree the healthcare industry should be regulated more tightly than commerce in general, but there's plenty of debate about exactly how far we should go.

Giving special discounts to preferred customers is a completely normal practice everywhere outside medicine/drugs.

> I would not be surprised if they've hiked the list price a ton to game the insurance

Seems to be standard business. ONE of my prescriptions for rheumatoid arthritis costs roughly $5000/month without insurance. My insurance, plus additional assistance from the drug maker makes the medication "free" for me. It's clearly a giant, legal insurance scam.

It's almost definitely an insurance scalping strategy, and the number of people needing this drug via this delivery route may actually be that small (or close to it). When companies do this, they usually just hand it out to uninsured patients for cheap or free, not out of the goodness of their hearts but because they want to try and reduce bad PR. The whole Martin Shkreli debacle was incredibly similar, and in the same way that people couldn't seem to talk rationally about the real problem there (high pricing encouraging more high pricing just because insurance will pay for it), the average discussion about this case of pharmaceutical scalping will completely miss the point, too.

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