Comment by freeflight | Hacker News Reader

Comment by freeflight | Hacker News Reader

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If that'd be the case then any country with a single-payer healthcare system would suffer from similarly inflated drug prices as the US, but that's simply not the case [0].

What's stopping US insurers from pressuring drug companies into price agreements? Shouldn't that be also in their best interest, instead of just passing the costs along to the patients? If that's all they are doing, what do you actually need them for?

In Germany, price agreements between drug manufacturers and insurers happen plenty of times, and it usually works out because drug companies take reduced profits over no profits, any time of the day. Patients still have the option to buy the "fancy version", paying out of their own pocket, but the vast majority of patients are completely fine with whatever their insurance covers.

[0] https://www.commonwealthfund.org/publications/issue-briefs/2...

Insurance companies in the US have to pay out a certain percentage of the premiums they take in (80% last I checked) [0]. So they're also incentivized to let prices climb; their 20% for "administration and profit" is inflated when prices are inflated.

[0] https://www.healthcare.gov/health-care-law-protections/rate-...

That makes sense if it’s a monopoly, but presence of many insurance carriers and variety of plans introduces some price checks.

Insurers routinely exclude drugs that they think are overpriced, they also switch to generics the day a drug goes off patent, sometimes forcibly.

> Shouldn't that be also in their best interest, instead of just passing the costs along to the patients?

But aren't those cost actually being passed onto the employer via the employees health care plan?

Here is Australia, where we have universal help care, we have a system call PBS and it's role is to define the drugs that get subsidized under that universal help scheme.

To keep those cost down it tries to pick generic versions of these drugs.

When Australia join a free trade agreement with the USA a side affect of joining that agreement was a weakening of the PBS.

We now have a situation where drug companies are able to manipulate the PBS for their gain, coming at the expense of the tax payer:

https://theconversation.com/the-tricks-companies-use-to-get-...

In the US, three pharmacy benefit managers (PBMs) control >70% of the market. [1] In an oligopoly, higher prices aren't such a bad thing.

[1] https://www.fda.gov/NewsEvents/Speeches/ucm599833.htm

"Capturing the Benefits of Competition for Patients" Speech by Scott Gottlieb, MD Commissioner of Food and Drugs March 7, 2018

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