Anything routine is so expensive in the US because regulation's gone completely out the window.
An area I'm familiar with for example: in Canada (where I am now) Salbutamol inhalers cost about $20-25. In California I was lucky to find it less than $100. And this is for a well-known decades old generic.
See also: insulin. It's making headlines[1] that companies are finally dropping prices down to roughly in line with the rest of the world (starting in 2026). And this is after other measures have already been taken -- it used to be much worse.[2]
Worth repeating: this price gouging is for generic and old medication.
[1] https://www.msn.com/en-us/money/companies/novo-nordisk-to-cu...
AFAIK, SG&A is the number that groups criticizing pharmaceutical companies look at, even though it includes a lot of money spent on things like paying lawyers, which any pharmaceutical company that actually wants to make back the billions spent on developing drugs will have to do.
[1] https://www.statista.com/statistics/269499/merck-and-co-sgan...
[2] https://www.statista.com/statistics/282738/expenditure-on-re...
[3] https://www.macrotrends.net/stocks/charts/ABBV/abbvie/sellin...
[4] https://www.statista.com/statistics/417068/r-and-d-expenditu...
The fix here would be to remove the middlemen (insurance companies) and pay hospitals what Medicare/Medicaid pay them, which is typically a much lower negotiated amount.
My mother underwent chemotherapy for her cancer.
According to the statements from her insurance company, each round of chemotherapy cost as much as a new luxury car before hospital vs. insurance negotiations. Yeah.
The value of health insurance isn't just the offloading of expenses, it's also their power to tell hospitals to get fucking bent with ludicrous bills.
It's a lot like "Black Friday" sales where retailers jack up their shelf prices in the preceding days and weeks so they can mark them down and persuade the customers they're getting attractive deals.
Public healthcare, of any sort, should not involve working with third party insurance companies.
In any case, this is also why medical tourism is a thing - you could go get the exact same treatment, to completion, half way around for far less than what you the cost you were quoted for a single round in the US - including housing and other costs.
That leads hospitals to 1000x every treatment price so when insurance companies come to negotiate they can negotiate down to 100x. It causes hospitals to understaff because is cheaper to pay for legal staff to handle malpractice claims than it is to not work your nurses and doctors to death.
It causes drug companies consolidate and then charge through the nose for drugs that cost them pennies to manufacturer (for example, penicillin or insulin) drugs that, everyone should be aware, all of the R&D and FDA approval has been done. The most expensive part of drug development is done.
There are solutions. It's regulations. Hospitals regulated to minimal coverage. Drug/hospitals hit with anti price gouging regulations. Insurance companies hit with coverage regulations.
That's all something doable and probably with enough political will to be done.
An even better idea is simply nationalizing medicine, top to bottom. That's unlikely to happen, but would result in the biggest drop in healthcare costs.
In the immortal words of President Ronald Reagan: "I'm from the government and I'm here to help."
Which is to say, no. Obviously this is a long-brewing problem in need of a solution, but more government is not it.
Every semi functioning healthcare system has more government involvement than what the US does.
Reagan was wrong.
Companies providing medical Care have to spend 80% of their costs on actual medical care, not marketing and executive compensation.
The only way to make the 20% that really matter to the decision makers larger is to make the medical costs larger.
It is one reason people on United healthcare get $100 gift card to see their primary care provider each year.
It's also the reason why there's no real pressure to reduce drug costs.
That requirement was imposed on insurers in response to already-exorbitant medical costs. It does create a perverse incentive, but it cannot be the root cause of the issue.
The exorbitant costs arose with the provision of private medical insurance in the 1940s but only really took off when Medicare and Medicaid came in the 1969s with, essentially, a blank check for cost.
Things weren't improved in the 1980s when emergency rooms were required to provide care regardless on a patient's ability to pay, leading to another perversion that for a significant group of people the only way to get medical care was when it was too late and most expensive.
ACA is just another example of the US government doing stupid.
Note that this changed in 2022 for the most-bought drugs.
https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price...
Too bad the hospitals don’t figure out some way of providing preventive care to the uninsured to reduce these costs.
I firmly believe that was a poison pill put in the ACA intended to drive prices up enough where people got so upset we end up with single payer. The alternative is that the people that penned the ACA have absolutely no understanding of economics, and I’m not sure which is worse.
The sad thing is for medications all it would take would be a simple bill that says that medications in the US will cost the average of Canada, Japan, The UK, and Germany (or whatever).
That percentage will grow for the next few years as boomers migrate to Medicare
Unclear from the article, but it's quite possible that UHC was _forcing_ him to use the more expensive name-brand drugs due to an agreement that they made with their pharmacy benefits manager (PBM). Some name-brand manufacturers will see generics on the horizon and throw in a clause that obliges the PBM to continue exclusively covering the name-brand drug for X amount of time. UHC specifically fucked me over this way by refusing to cover a widely available generic drug, insisting that they'd only pay for the name-brand stuff, but no pharmacy on earth seems to carry the name brand stuff and couldn't even source it to order it, so UHC effectively denied me the drug altogether.
I feel for the guy in the article because the drug that UHC fucked me over about (mesalamine/Lialda) was keeping my Crohn's in check, and after the ensuing flare I had to switch to Remicade, which isn't totally working for me—I'll be switching to something else soon.
Obligatory link about PBMs and how they suck: https://www.thebignewsletter.com/p/inside-the-mafia-of-pharm...
And being on Remicade myself, albeit at a lower dose (and without Entyvio like he's also taking), I was curious enough to check the EOB for how much my current insurance pays for it. I have Anthem BCBS and here's the breakdown of my last infusion. For context, this is a drug where you have to go to an infusion clinic for administration because it's delivered intravenously.
Doctor/facility charges:
$21,420.70
Your discounts: -19,563.26
Due to your doctor/facility (max allowed): $1,857.44
Anthem paid: $1,857.44
Drugs
Provider charges: 21,020.70
Plan discounts: 19,226.20
Anthem paid: 1794,50
Infusion center
Provider charges: 400.00
Plan discounts: 337.06
Anthem paid: 62.94
And for reference, that's name-brand Remicade too, because it's what Anthem's PBM requires. I'm on 7.5mg/kg every 8 weeks, and the highest approved dose is 10mg/kg every 4 weeks. So even if he was on, e.g., 20mg/kg every 4 weeks, that would be maybe $4k worth of drugs once a month, which is $48k a year. Unless Entyvio is way more expensive than I realized, I have no clue how that would add up to a million dollars a year in costs, unless they're sending him to an infusion center that charges crazy high prices (which, if it's part of UHC's Optum network rather than an independent clinic... maybe they do :P)
Big pharma disinformation? Perhaps most new treatment research is government funded (and by governments of other countries).
Clinical trials are incredibly expensive but also comparatively straightforward and require a very different set of facilities and skills from basic research. Pharma mostly could not recruit away the people with these skills from academia- they can’t offer the same freedom and job security, but the academics often found startups they work for on the side and ultimately sell to pharma if it works out. So comparing money spent isn’t the entire picture of relative contribution- as they are each doing parts the other is not equipped for.