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Comment by refurb | Hacker News Reader

Like most mainstream media reports it misses a lot. I worked in the industry and The NY Times article misses key points.

There is no “price” for a drug, there are several prices - list, net, Medicaid, AMP, ASP.

So yes, while the list price for Gleevec has gone up, the actual price paid is very different.

It’s the same for insulin - the price that manufacturers have received has gone down 41% from 2014-2020, while the list price has gone up 140%.

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh...

If people want to really understand how it all works, I recommend the Drug Channel blog by Adam Fein. He does a great job of digging into details, pulling data and showing what prices are actually doing.

https://www.drugchannels.net/?m=1

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> So yes, while the list price for Gleevec has gone up, the actual price paid is very different.

You say it like it's a good thing. It's part of the problem.

The fact that there is no clear no-nonsense to get a drug at a reasonable price without jumping through a bunch of hoops which aren't even clearly documented is not a good thing.

We are talking of life-saving drugs here, not hacking frequent flier miles or credit card rewards.

There is a good system - that works for insured patients. It’s the uninsured that get hosed

NY Times talks about list prices but that price isn’t even used by insurance companies.

> There is a good system - that works for insured patients

Does it? I've read plenty of horror stories of people getting denied treatment by insurance, or paying tons of money for insurance barely covering anything.

And more broadly, how much money is wasted on multiple layers of beyond useless middlemen? How much money do hospitals spend on admin and billing departments dealing with this bullshit?

Strong "No Way to Prevent This, Says Only Nation Where This Regularly Happens" vibes.

How is it good? How do the insured benefit from the complete lack of price transparency besides having to pay significantly higher premiums than they would otherwise?

Because the insurance company don’t pay list price, they pay the negotiated rate.

The patient doesn’t pay list or net price they pay the co-pay. There doesn’t need to be price transparency. It’s like auto-insurance - do you need to know the negotiated rate for your collision repair?

No, you just pay your deductible and move on.

The list price is irrelevant to the insurer and the patient.

It leads to unnecessary inefficiencies. e.g. different insurance companies might end up paying different prices which affects premiums.

Insurance companies are inherently incentivized to maximize their costs which is one of the (if not the) biggest flaws of the US healthcare system.

Other countries which have entirely privatized systems (even to a larger degree than the US) like the Netherlands solve the by directly regulating prices.

> no clear no-nonsense to get a drug at a reasonable price without jumping through a bunch of hoops

Yes

Is possible

I have a friend who imported the drugs she needed to treat type C hepatitis from India

Proceeded to set up a buyer's club that transformed the lives of dozens of people

What a stupid system, and how the most vulnerable suffer to benefit the most powerful

I had heard that a treatment had been developed that cost ~ $100k.

Looking at the wiki, was it solvadi/sofosbuvir or olysio/simeprevir?

"While access to the newer treatments was expensive, by 2022 prices had dropped dramatically in many countries (primarily low-income and lower-middle-income countries) due to the introduction of generic versions of medicines."

https://en.wikipedia.org/wiki/Hepatitis_C

You've described the problem:

> here is no “price” for a drug

Yes, there is. If we look on their 10-K statements, they will have a fixed cost and a variable cost assigned to each drug. The variable cost will be just the manufacturing, and the fixed will be research and overhead allocated to this drug.

Total cost = fixed + variable. The rest is profit. We can decide what a "reasonable" profit is, and Total Cost + Profit is the notional "price."

That doesn't mean treating them like a state monopoly and the final price is fixed by law, but it does tell us a "price." All those things you mentioned (list, net, Medicaid, AMP, ASP) are kinda irrelevant.

Cost-plus pricing creates all sorts of perverted incentives in and of itself.

And I’m not sure we want to go with “government mandated profit margins”.

Do all drugs have the same margin? Even if the benefit is the same? That creates perverted incentives.

It’s not a simple problem to solve at all.

I don't think you read the whole thing. I specifically said "no cost-plus pricing." It's just a notional price for comparison with the real ones.

Looking at cost and setting a price is cost-plus pricing.

Hello? Do you understand the word "notional"?

I like to say the first dose of a drug costs a billion dollars and all the rest ever after cost a few cents.

So when a diabetic goes to get lifesaving insulin and some mistake happens w insurance they are paying the inflated price. Not rare, since insulin comes in bottles which can and do break.

It sounds like you're saying exactly what TFA says? Bit odd to criticize an NYT article (and without linking) as a comment on an article that does get into these details?

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