Tonnes and tonnes of example of price gorging just a mouse click away:
This is a beaut; Proof The U.S. Pays More For Top Selling Drugs Than Other Countries Even With Discounts
Why were you so ardently opposed to it for so long, then?
The cite mentions some of the factors.
So yes, we could cut that if we choose. Make clinical trials simpler, de-emphasize chronic disease, and not worry so much about which drugs work better. We might save money. Of course, there would be a downside, but we could do it.
Regards,
Shodan
Statins are a good example. There is very little evidence that they increase life expectancy overall, yet they are extensively used in the US, and they cost more.
But they are also a good example of the problem. We don’t need single payer to address the issue. Insurance companies could simply refuse to cover statins. What do you expect the reaction to be like?
Regards,
Shodan
I assume you mean “if we consider”. Which, I and many others don’t. I just don’t understand why we should be aiming so low.
However, in the rest of the advanced countries, universal care means just that. Everyone gets universal healthcare - not just access to insurance. The latter still leaves you at risk of bankruptcy or death if you choose the wrong insurance.
$2.6 billion isn’t the “cost of manufacture,” it’s the cost of the development of the drug, which is about 98% things other than manufacture.
Once that money’s gone, the drug will be sold above the cost of manufacturing, which is pretty small all things considered.
Anyway, be wary of the numbers. For one thing no one actually agrees on the number.
For another, the deliberate use of the term “New drug” is very deceiving. Most pharma company effort is not in truly new compounds; it’s on variants of existing compounds, which is, as you would expect, WAY cheaper a process, since you’re cheerily skipping over some of the phases. You cannot skip Phase 3, which is usually the most expensive, but it’s still not the full price.
Merck, to us an example, pulls in just over $50 billion a year. They have 13 drugs, according to their website, in Phase 2, which is limited testing for efficacy and safety; since about two thirds of new compounds They presently have 19 products in Phase 3 according to their website, which means the drug is actually out in the field being tested on a great many patients, against either a comparative or a placebo.
(Their website also lists nine products under “Under Review,” which from what I can tell is Phase 4, but at that point you’re getting paid for it - Phase 4 is post-marketing effectiveness and pharmacovigilance - so let’s ignore those.)
If Merck has 32 drugs in Phase 2 and 3, maybe 10 will survive to approval. So, if Tufts is right, Merck will spend $25-30 billion to get those ten drugs to market - I am assuming they’re extrapolating research costs on all efforts to drugs that actually make it, or else their article makes no sense at all - but this is a company that makes fifty billion a year, and that $25-30 billion was spent over many years. Drugs are profitable. It’s why people make them. And I’m assuming they’re all new, but upon a quick look I see at least two that aren’t new drugs, they’re variants on existing ones, so the $25-30 billion figure is way high.
The companies that are actually risky are not the big firms you’ve heard of; Merck, Pfizer, Lilly and the like can all handle failed drugs. They’re financially designed to shrug and move on if a new compound hits a wall. Where the really wild risk and rewards are to be found are in startup pharma companies who are exploring one, two, maybe three compounds. Hit a home run, and the first 50 employees of the company can strike it rich big time. Have it fail a trial and everyone’s out of a job. When you work in this industry it’s kind of a lifestyle choice in terms of choosing an employer - do you want the sure bet or do you want to take a shot at the Maserati?
I think I’ll stick with the advice of the NHS:
The problem with everyone who has a nice USA employer insurance package is of course - why would the employer shell out thousands per employee per year for health care once they could get pretty much the equivalent for free? There’s more bang for the buck putting that to supplements - prescription top-up, pay any co-pays, life insurance, actual cash in employee’s pocket. It’s like offering free taxi rides to someone who takes the subway to work. Very nice, may not get you there faster but there are probably better things to spend money on.
The only reason employers would continue to offer insurance would be because the Medicare option would be crap service.
Why would you want healthcare from an employer, unless you were a 15th century serf servng at the will of the Master?
I have a close family member who moved to the US years ago to take a senior executive-level position, and it should be no surprise that he tells the same story; lots of bitching about his supposedly first-rate insurance compared to what he was used to in Canada, mostly the onerous paperwork, endless arguing with the insurer, and occasional claim denial with complete absence of any coherent logic. In civilized countries the medical experience is purely medical – insurance is this invisible thing in the background that just pays the bills.
That won’t and, in a sense, cannot, since there is no point in paying for something that no one will offer; if Medicare is universally applied insurance companies will stop offering the basic services Medicare provides.
Where the benefits will come in is in the extras, which are pretty significant. Living in Canada, I reply on my employee benefits package to pay for all dentistry, optometry, drugs, and added medical benefits like travel insurance, private hospital rooms, and stuff like that.
I should add that Scott’s experience also includes the same complaint wolfpup mentions; though he has good insurance, it is much more bureaucratically confusing and weird than what he was used to in Canada, without any obvious corresponding benefit.
I was covered for fillings through an employer’s group medical/dental plan through ****** Life. Well, ****** Life covered my filling, but not the glue to attach it to my tooth.
The same plan also covered endodontics. They denied coverage of my root canal done by an endodontist who only charged the regular dentist rate. ****** Life’s claims people were a waste of oxygen. Each time it took my calling one of their lawyers and threatening court to get the cash out of them. My employer dumped ****** Life.
I very much would like to see full medical/dental/drug coverage under the universal health care + single payor umbrella, for I trust insurers as far a I can throw them.
It could be worse. At least ****** Life tried to be creative in their weaseling. One of my friends in Canada’s Mexico had a job denying medical claims. Not reviewing the claims and deciding whether or not to deny, not coming up with any weaseling to get out of paying: simply denying them without even a cursory review. She quit.
Manu got screwed…
But my father related the same problem in the USA. Blue ***** tried to deny his gallstone operation in the mid-90’s because “gallstones are a pre-existing condition, since they’ve been growing for 20 or more years.” it took a bit of forceful arguing.
But that was the whole plot of “Rainmaker”, IIRC. Deny everything on first application, see who just goes away.
MY friend in Canada had dental implants, and our plan tried to deny them because they were not specifically covered. However, they did cover crowns (80%, IIRC) so after a bit of back-and-forth they had to pay for the crowns, but not the post and operation. (How I expected it to end anyway…)
That’s quite a bizarre statement that seems to reflect unwarranted assumptions and a lack of understanding at several levels of the health care system in Canada.
A phrase that occurs often in discussing this system is “medically necessary procedure”; that such procedures are covered at no cost to the patient is a foundational principle of health care in Canada. Another foundational principle is deference to the medical professional as the determiner of what is medically necessary. This is unlike the private insurance system where meddling in the doctor-patient relationship, refusing to pay for a treatment that the doctor and patient both want, or demanding a cheaper alternative, is absolutely the hallmark of how private insurance works. So to “need something that they don’t cover” is far more likely to happen with the private insurance system as practiced in the US – in fact it’s pretty much endemic to the system, which is why health care costs are the number one cause of personal bankruptcies.
Another big difference in coverage is that private insurance is all about minimizing payouts, so the more expensive the treatment, the more motivated they are to find reasons to deny the claim. Single-payer simply doesn’t operate at that level – it doesn’t make clinical judgments at all. What single-payer tends to not cover are frills and nickel-and-dime items – the big stuff is always covered under the “medically necessary” overarching principle.
And really, this idea that the US abounds in magical medical technology that other advanced countries lack is almost entirely a fabricated fiction. The US is a major center of technical innovation so it may often be the first to introduce new medical technology, but once it’s proven effective and goes mainstream it’s quickly adopted and added to the public insurance fee schedule. There’s a tremendous amount of cross-border technology transfer even beyond that – the cardiac unit at the hospital I was in was participating in a clinical trial being conducted by the US National Institutes of Health. The structure of a country’s health insurance system has nothing to do with any of this. Health insurance companies don’t do medical research – they are essentially useless parasites.
Good thing I didn’t say that $2.6 billion was the cost of manufacture, then.
SamuelA said
He didn’t say how much above manufacturing cost the government should offer, but suppose it’s 10%.
The pharma company wants to bring a new drug to market. The best-case scenario, where the drug actually passes all the trials, is that they will lose, on average, $2.3 billion. SamuelA believes they would have no choice but to go ahead. I think otherwise - they can just say “let’s stick to selling the drugs we already have” or “fuck this, I am going into some business where I can make a living instead”.
Regards,
Shodan
Here’s an example of what I mean : https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/
So right there, if you said “no more marketing. drug marketing is illegal,” you just saved more than half the cost of all drugs. Since no drug company is permitted to market, they can’t get an advantage over their competitors this way (advertising is mostly a zero sum game if you think about it), you could pay half on average for all medications and the pharma companies would have just as much money for R&D and the same 30% profits they enjoy now.
The next thing is that, contrary to whatever you think, pharmaceutical companies can spend their precious R&D money wherever they like. So in practice most of it goes to new boner pills and pointless variants on already profitable drugs, not chronic undertreated disease.*
So right away, if the government funded the research directly - maybe using a kind of prize system to incentivize the actual scientists who do the actual research - you’d save another huge chunk of the cost.
*source : the Billion Dollar Pill.
And yeah, for medical interventions that just don’t even work at all, in principle single payer should be able to just refuse to pay for them. I understand in practice that’s harder to do than it sounds.
You guys might know this but, certainly in the UK, you cannot advertise or promote prescription drugs to the public.
Most doctors aren’t interested in people who promote drugs, they tend to stick with the NICE recommendations.
Canada prohibited advertising drugs for specific treatments to the general public; so you could advertise the drug by name, or you could have an ad that suggested “ask your doctor about a new treatment for ****”.
Which gave us the hilarious series of ads where for example, a guy is smiling and dancing all the way to the office from home, singing “Good, morning, good morning…” ♫ ; followed by the name “Viagra” with no hint what the drug was used for… 
The “downside” would be that drugs would cost no more than they do everyfuckingwhere else.
Now how about all the other cost factors that seem to apply only in the US? Isn’t there really only one?
The other “downside” if we don’t allow the pharmaceutical companies to rake in massive profits and to raise prices as much as they like with little notice, they might not voluntarily spend some of their immense profits (industry wide average profit margin is 30%) on medical research, a small fraction of which might even be beneficial.
Or we could identify the diseases that affect the most people that there are not already effective medicines for, and just fund the research directly without all the middlemen and overhead of profits, administration, and advertising.
You know, like how nuclear power and most military technology and computers and the internet and all that was developed - through mostly government funding.
See, right now, the incentives for pharmaceutical companies are just to sell as many doses as they can of something they think people will buy. That kind of free market pressure works well in other industries - but in pharma, it rewards certain bad behaviors. For example, one easy way to make a lot of money would be to repackage heroin as a pill, gin up some studies saying your new pill isn’t addictive and that chronic pain is undertreated, and then to ship it by the metric ton. aka oxycontin.