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Comment by sneak | Hacker News Reader

They were only price gouging before because of other bad laws that prevented others from producing it and selling it at lower prices.

The state created their monopoly.

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"it's not our fault, we had to price gouge"

Yeah no. There is no benign justification for the three main insulin manufacturers raising prices in lockstep like the cartel they are.

Which specific laws are you referring to? Older formulations of insulin have been out of patent for many years, so in principle any company can produce generics for sale at lower prices. It can be expensive for generics manufacturers to get through the FDA certification process.

> any company can produce generics for sale at lower prices

Which maybe explains precisely why we don’t see it happen: race to the bottom on pricing means reduced profitability. Why would you sign up your company to make less money?

There are a lot of companies producing generic drugs. Teva alone sold $9B worth in 2021.

https://www.fiercepharma.com/pharma/top-10-generic-drugmaker...

> There are a lot of companies producing generic drugs. Teva alone sold $9B worth in 2021.

Yes! Note though that I'm not claiming a company cannot make money from producing generics.

But the question remains: why isn't some generic drug company then producing and making a killing (because they could underprice) in the insulin market? I think my original argument is the most likely reason, but I'm open to a stronger argument.

Eli Lilly and Novo Nordisk are now producing generic insulins.

https://www.goodrx.com/healthcare-access/research/how-much-d...

Obviously: the ones that require expensive certifications to make and sell drugs, the reason that there are only a few brands’ products for sale.

There are lots of people who would happily produce insulin and undercut the existing prices, but the pharmaceutical industry pays a lot of money to keep the barriers to entry in place.

Actually, the price of insulin has be going down over time, not up for insured patients.

But due to the bizarre regulatory system around healthcare in the US, manufacturers were incentivized to increase the list price (public price) all the while dropping the net price (confidential negotiated price with insurers).

This graph halfway down this page sums it up nicely: https://www.drugchannels.net/2020/08/five-top-drugmakers-rev...

Seems like lot in USA healthcare could be solved if it was mandated that everyone must get the lowest net price, plus at most some unreasonable margin like 100%.

Interestingly the government tried something similar - out of all the negotiated prices for private insurance, the government has to get the best one.

Good idea right?

Well it ended up raising prices. Because companies were happy to tell a small insurer with a good price "too bad" so they didn't have to take a massive hit on their government account.

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