Despite widespread availability of generic versions, customers do not often use them. Why?
In some cases, pharmacies are under obligation to not mention cheaper alternatives. Some pharmacists may not be aware of cheaper alternatives because they do not know what a plan covers.
And behind the scenes, there is the complex role of middleman pharmacy-benefit managers (PBMs), who take a cut out of sales and collude with drug makers to keep prices high.
Please consider Behind the Push to Keep Higher-Priced EpiPen in Consumers’ Hands.
Something strange happened when Alice Bers went to the pharmacy earlier this year to fill her son’s EpiPen prescription: The doctor had prescribed the generic, but it would have cost her more out-of-pocket than the branded version.
So the pharmacy asked her son’s doctor for a prescription for the brand-name EpiPen, and her health plan got a bill for $438.53, or $227.52 more than the generic would have cost it. Many EpiPen customers, from a range of different health plans, have wound up getting the more expensive brand.
“I couldn’t believe how crazy our system is that it cost us less to get the brand name, while of course it cost our insurer more,” Ms. Bers said.
One reason, according to multiple people familiar with the drug industry, is that a middleman can profit from the sale of pricier medicines, such as EpiPen.
“The complexity in the system and lack of the right information available to buyers at the right time costs the country billions of dollars, unnecessarily,” said Michael Rea, chief of executive of Rx Savings Solutions, which sells software to help patients and their employers choose the least-expensive medicines.
When Ms. Bers picked up an EpiPen two-pack in March, several companies beyond the drugmaker Mylan were involved in filling the prescription. These middlemen warehoused, shipped and handed over the drug. Overseeing it all was a pharmacy-benefit manager, or PBM.
Each was paid for their involvement. For a typical brand-name drug listing for $300, middlemen generally receive more than $37 in gross profit, according to Adam Fein, president of Pembroke Consulting, which advises drug companies on the drug-distribution chain. A PBM gets the biggest share, $18.
PBMs typically don’t reveal the rebates they negotiate even to their health insurer and employer clients.
Drugmakers and others in the industry also say that PBMs can profit from costlier drugs because that means bigger rebates. “Their incentives align more to a higher gross price and a higher discount than to truly reducing the cost to everyone involved, so there are questions whether they are actually driving lower cost,” said Howard Deutsch, who advises drugmakers on working with companies involved in the drug-supply chain at ZS Associates.
Some PBM contracts prevent pharmacists from telling patients a drug’s true cost or whether an alternative might be cheaper for them, said Kevin Schulman, a Duke University professor of medicine who has written about the intermediaries.
When Erin Morrow, of Franconia, Pa., went to a local CVS pharmacy to pick up a prescription for her young son in April, she said she didn’t know about the Mylan generic and the pharmacist didn’t tell her one was available. Her plan paid $357.04 for the EpiPen Jr. two-pack. Later, a “health advocate” working for her employer told her that she could have gotten the generic, which would have cost her plan $81.54. Ms. Morrow said her health plan began limiting the coverage to Mylan’s generic and a rival product, starting July 1.
Consumers like Ms. Bers, a lawyer from Longmeadow, Mass., say a number of factors in the complicated health-care system seem to push them to the costliest version.
Ms. Bers’s drug plan—administered by the PBM Express Scripts—has no incentive to favor the cheaper generic version of EpiPen over the brand name. Her copay is the same either way—$30.
When she went to the local CVS pharmacy in March to replace a two-pack for her 17-year-old son that had expired, she wanted to use a coupon from Mylan to cover the copay. But the pharmacist said she couldn’t use it for the generic, she says. She says the pharmacy never told her that Mylan also offered copay help for its generic.
Ms. Bers says she learned later, by looking on the websites of Express Scripts and her Blue Cross Blue Shield of Massachusetts health insurer, how much more the brand-name EpiPens cost her health plan.
People familiar with the industry say Express Scripts, the PBM, could have made more from the sale of brand-name EpiPen depending on the amount of the rebate and other concessions it may have won from Mylan, and what it passed along to Ms. Bers’s health insurer.
Rotten to the Core
What applies to EpiPen applies across the board. Collusion, nondisclosure agreements, and government laws that do not allow cheap drug imports all act to keep prices higher in the US than anywhere else in the world.
Mish Health Care Proposals
Published fees: Fees for routine services, medicine, and operations need to be published, not set by government mandate. Whether or not someone is insured, the fees should be the same.
Shopping Around: People should be encouraged to shop around for the lowest-cost provider of drugs and services.
Under this mechanism, insurance providers and hospitals can allow specified amounts for specified services. Other than emergencies, the insured can then shop around for the best provider of that procedure. Why should the medical insurance company care where the service is performed other than weeding out or disallowing unreputable places? Auto insurance companies typically don’t.
As for drugs, consumers should be able to get them from any reputable provider, even overseas. US prices will quickly fall to global prices under this provision.
Foreign Services: Plans should be allowed to offer foreign operations for non-emergency operations, for those able to travel.
Savings are immense. For example, a Bloomberg report shows that a Heart Surgery in India for $1,583 Costs $106,385 in U.S.
Demand treatment in the US? Fine. You should have to pay for it with a higher insurance bill. Obviously, this provision does not apply to emergency services like an accident or a heart attack.
Drug Pricing: There should be a price schedule for drugs. Pharmaceutical companies should not be allowed to charge less to overseas buyers than US buyers. There can be volume discounts but they have to be across the board.
Medicare/Medicaid: M/M should mandate generics where available.
M/M should buy supplies from the lowest-cost reputable provider, including importers.
Right now, those over 65 simply do not care much what things cost. Incentives are necessary to make sure they do. This includes forced overseas treatment for those able to travel.
Right to Die: No one should be kept alive if they want to die. Nor should someone be artificially kept alive if they do not have insurance, or their spouse or designated appointee wants to pull the plug on someone’s behalf.
Right to Refuse Service: If someone is not insured, hospitals should have the right to refuse service.
If people know they will be turned away, they will get insurance or take the consequences.
Patent Restrictions: Patent laws need to be revised to prohibit making minor changes and renewing patents for extended periods again and again.
Eliminate State Restrictions: Allow any insurance company in any state sell insurance in whatever states they want.
Age-Based Insurance
It is logical to expect medical insurance to cost more the older you get, just as with term life insurance.
The one-price-fits-all model of Obamacare introduced massive distortions causing the young and healthy to drop out.
Pre-Existing Conditions
One reader previously proposed a waiting period of 3 years for those who attempt to game the system by opting out of insurance then suddenly wanting it. An alternative is to simply allow the insurer charge much higher rates. Either way, the free market will work if competition is guaranteed and services can be denied. No government rules are necessary, other than allowing the practice.
This would easily work going forward. There is still a debate about those with pre-existing conditions now, under Obamacare rules. What may be best from a free market aspect may not be socially allowable.
What may be best from a free market aspect may not be socially allowable.
Abortions, Birth-Control Pills, Etc.
The government has every reason to stay out of it. If insurance plans want to provide those services they will, if not they won’t.
Synopsis
My plan is fair. Rather than forcing everyone to buy insurance, it provides strong, free-market incentives for everyone to do so.
Customers will have a huge incentive to shop around. In turn, this ensures competition at every point in the system!
My proposals provide significant cost savings opportunities forced on drug providers, allowed by hospitals, allowed by insurers, and encouraged by insureds.
Mike “Mish” Shedlock
why isn’t there an on-line “AMZN” backed up by Google search with Facebook pages for dispensaries hooked up to all doctors for all drugs?
in any other industry, this would be prosecuted for racketeering.
A canada based AMZN!
Australian relatives couldn’t get common antibiotic skin cream without expensive and inconvenient prescription rigamarole. I ordered thru amzn and it was delivered downunder within 10 days to cairns, at the end of the food chain, for about $5 delivery.
There are coops here in the US that have a dispensing pharmacy as part of their fee. They have wholesale contracts with the drug companies and they offer cost +10% in most cases for the drugs. They usually don’t take insurance but you can usually get seen the same day. There is nothing wrong with that if people go into it knowing ahead of time.
Maybe drugs are expensive because of insurance, medicare and medicaid. Also the social engineering that anything other than drugs and surgery is snake-oil and will not be covered by insurance (like supplements, ayurveda, homeopathy and chinese medicine.
It’s worse than that. The Diapram (sp?) thing is a prime example.
It used to be generic, and could be had for around $15
Then a wall street investment company bought the patent, made a minuscule change, and re-patented it, and bumped the price to $750
That guy’s name was Shrekli.
The Epi-pen thing was similar. The manuafacturer made a slight change to the forumulation and re-patented it.
Then a senator on an education committee that had an indirect financial interest in the investment firm mandated that all schools had to buy a supply, and they had expiration dates.
Then the price quadrupled.
Why does this happen? Why are American’s paying so much? It’s called “Government-sponsored Monopolies”.
Overseas drug prices are regulated by Drug Boards in each country. They artificially hold prices down. The US does not have one, so Americans pay an inflated price.
Allowing drug importation will likely not work, as then I’d say supplies and manufacturing will be reduced to meet only the local country’s needs to avoid reducing prices in the US.
It’s an example of Mish’s laws of doing something and nothing.
In Poland you just go to a pharmacy and with prescription for X and you ask for cheapest generic alternative. By law pharmaicists must give you cheapest one alternative. It’s always also common that pharmacists suggest you cheaper alternative.
It looks like heroin from Afghanistan is the perfect solution to the health care system. It keeps the serfs pain free until they die. Free market rules the natural monopoly of health care. The system is working perfectly.
Heroin from Afghanistan has a problem associated with it – Anthrax. Over 110 people died from tainted heroin in Scotland alone earlier this decade with a smattering in the rest of a Europe. Mexico’s heroin doesn’t have that problem as of this writing. Our people have been taking it and are currently dying in droves… please google heroin epidemic especially in Ohio.
Mish,
Appreciate your thoughts, analysis and shining a light into a dark corner. Beware of just looking at price. India has such a high antibiotic resistant because the physicians also sell the drugs to the patients. This drug resistance has fostered very real superbugs that are resistant to everything we currently have. Please google ndm1. These bugs have just reached our country. I’m not sure if they have come via medical tourism but its a very real possibility.
Keep up the good work.
Dave
US healthcare is right out of wizard of OZ, inscrutable mumbo-jumbo coming from behind the curtain.
too many powerful interests making the system more complicated and profitable for non-productive middlemen.
There is zero wrong with the Federal government running healthcare since it is a public universal good to have. Making it a for profit service is a gross distortion of public service. Profit is the No1 reason healthcare in the USA is double the cost of everywhere else. All the above negotiations go on behind the scenes in the other nations. So that is fine.
Just have a single payer. As I have said before the Fed can buy the debts and allow the public to keep more of their salaries to spend and grow the economy. The profits don’t grow the economy so well because big firms don’t much spend their profits into the daily economy. That trickle down idea is bull and they know it. It is appalling that such a wealthy country can have medical bankruptcies.
The healthcare system in the US is double the cost because our government protects the players from competition. It is no a universal public good or any other Socialist mumbo jumbo. It is a product to be purchased just like food, shelter and fidget spinners.
Neither Obama Care not the crap the Republicans are cooking up does anything to break the cartel. It is too lucrative and the campaign contributions are too large. Single payer won’t fix that either.
+1000
Its a mystery how anyone can look at the US Post office and Amtrak and billion dollar military planes — and then advocate putting the US government in control of health spending.
The free sh!t army never bothers to think anything through. Deport them all (along with freeloading Bernie Sanders) to Venezuela and let them enjoy the socialist utopia they want to force on everyone else.
The government has every reason to provide birth control as there is an obvious social and economic benefit to preventing unwanted pregnancies. Why pander to the Jesus people?
The same applies to the health care industry. They have every reason to provide birth control pills rather than abortions.
Government has more reason to be against birth control and abortions, as it means a smaller pool of eventual taxpayers and soldiers. Government would be better “adopting” the unwanted kids, even if meant making them slaves of sorts or raising them as soldiers.
“What may be best from a free market aspect may not be socially allowable.” Mish, I love ya, but you write at time as if you forget that all economy is “political economy.” Economics (including free market theories) do not — cannot – exist outside society and politics: the polis. Free market theory is not a law like gravity or magnetism; it doesn’t operate independently of human societies. It may represent what you (and others) believe to be the “best of all possible” systems of economics, but if it fails to acknowledge what’s “socially allowable,” it will soon founder, as it usually does, when taken to extremes. The same is true for distributive socialistic systems, which are equally, if not more Panglossian. Economics as a discipline seems prone to this sort of “scientism.” As long as politics — power relations — remains ascendant (and it will), political economy will be far too messy for pat theories, left or right. In the end, economists tend to cherry pick aspects of political economy where their preferred theories operate well and ignore aspects where they fall apart.
.
There are millions of arguments and rationalizations for using a gun to force someone to do something you want them to do.
And all of them are wrong.
you should be able to stay with no health insurance if you want it imho.of course,in that case,you ll have to pay for your healthcare or get no care. a man imho may live without healthcare til his 50ies,every day after that is a gift.50 years is old enough to have children and raise them to adulthood. if health insurance is too expensive because of greedy company,you should be allowed not to buy their goods .
Mish, I disagree with your prescriptions. What you are describing perfectly fits the definition of racketeering. Number one on the agenda should be criminal prosecution under federal racketeering charges.
I didn’t see tort reform. Did I miss it ?
It’s a moot point. When your open heart surgery gets botched in India, you won’t have any legal recourse. Ha!
More likely to be botched in the US for numerous reasons
Here is a key one: In India you are likely to have a full-time nurse attendant, not a nurse taking care of 10 people
I missed it too. Tort reform is vital to reduce malpractice insurance costs, which are astronomical and figure into health care inflation. Silence on the subject is deafening. So-called defensive medicine to protect against lawsuits and medical malpractice insurance are major reasons USA health care is high-priced. Trial lawyers are one of the biggest campaign donors, particularly to Democrats. Out of self-interest, Democrats need to delay anti-Obamacare legislation until milking every last possible 2018 election donation.
Good points.
On pre-existing conditions, there are two types. One develops with no insurance coverage. Under the second, a condition develops while covered.
The fix for the first is to make sure everyone is covered by some sort of plan from birth. Eventually this type will disappear.
Under the second, insurance companies want to get rid of their obligations, by significantly increasing rates to the individual, or dropping coverage when jobs change.
Regardless of how and when coverage is first established, coverage must follow the individual, unless voluntarily terminated. This will make for a far more fluid workforce. Once covered, insurance rates should rise with age group, recognizing that part of the aging process will be an accumulation of individuals with “pre-existing conditions” in the pool.
The whole medical industry is a massively overpriced racket and price fixing cartel. Your plan is great, Mish, but doesn’t even go far enough…There should be one price for every service, drug, etc, and it should be posted. Pharmacies should be required to disclose cheaper alternatives. Competition should be mandated. But won’t happen, and the continual price increases, and the increase in covered populations on Medicaid and Medicare, will bring down every government in the US.
Mish, the answer to your question about why a plan would only cover the generic is right there in the excerpt of the article. Branded costs the plan $357; generic costs the plan $81. Not sure what the mystery is there – the plan wants to save $276.
My example was the plan would NOT cover the cheaper generic
I think this is confusing because Mylan apparently manufactures the branded EpiPen and its own generic, and there are also other generics on the market. The way I read the quote, the plan’s action makes sense for the reason you stated: to reduce costs because the insured must get the generic, either Mylan’s or someone else’s. The quote from the article indicates the plan will only cover the cheaper generic as of July 1.
Hospitals should not be able to turn people away. BUT. The caveat there is that hospitals now are running as for profit entities, even those who are supposedly non profit. Administration and salaries are the largest part of the bloat.
Churches and other charities used to care for those who didn’t have insurance and couldn’t afford the fees. They were not cesspools of hellish bad care, for the most part. I was born in one, and I was admitted into one when I was a year old because of seizures. I still remember the nuns.
If churches and other charitable organizations brought back their mission of caring for the poor and actually used their money toward those things I wouldn’t have a problem with most hospitals turning away those without insurance.
“Pharmaceutical companies should not be allowed to charge less to overseas buyers than US buyers.”
This kind of thing is completely unenforceable without a spy apparatus making Stasi seem positively stand offish. The fundamental, underlying problem with “health care”, as well as the rest of our progressive Dystopia, is specifically the nonsense that some “they” “should not be allowed…..” That whole line of delusion, is why we are where we are at: An undifferentiated police state so dysfunctional that whatever craziness the coming Caliph may be up to, is increasingly recognized as a liberation, rather than an invasion.
Instead of “they should not be allowed”, the focus needs to shift to I/We/They/Anyone _should_ be allowed. Anyone allowed to buy anything from anyone a anywhere for any price the two can agree to. And ditto for anyone making anything available to anyone anywhere anytime, for any price. Entirely unimpeded. No laws, no rules, no lawyers, no reporting of sales, no reporting of supposed income, no reporting of who you sold what to for what and what reason. No anything. You simply cannot enforce monopoly pricing in an environment like that.
While the “not be allowed” strategy, is nothing more than an encouragement to ever greater complexity; as every ban on one thing, like the price charged, is worked around by sponsoring “conferences” for doctors and “decision makers” (aka welfare for escort services in conference towns), “scholarships” and “research grants” (for friends and family of the above), political donations blah, blah…… Reducing complexity that has arisen from too many and too invasive laws and regulations, by adding yet more laws and regulations, cannot work. Hence will not work.
Instead, the onus always has to be on allowing anyone who don’t particularly like the current system and their assigned role in it, to simply opt out completely, and join or invent another one. Or none. Routing around whatever he perceives as a failure. Doing exactly whatever the heck he pleases, without anyone else having any business knowing what that may be, much less in any way involving themselves in it. Do that, and people will seek out the cheapest, simplest and best solutions. Hence providing incentives to provide exactly those. Rather than the kind of perverted incentive chains on display in this post.
Preach! Very well said . . . that’s the kind of logic that melts snowflakes, though. Probably should have led with a trigger warning. LOL
I needed a drug for cataract surgery. The prescription was for Prolenza which was not covered by my part D prescription plan. The cost was going to be over $300. I did an online search and found that the manufacturer offered a coupon that cut the cost to about 1/3 the original price I was given by the pharmacy. Pays to do your research especially when the money is coming out of your pocket, but in a way these drugs costs are coming out of everybody’s pockets.
One thing I can’t wrap my head around is why limiting supply is considered a good thing when it comes to health care. There are stories about attempts to close hospitals in small towns because there are “too many” beds. I recently had a conversation with someone about MRI tests. She complained bitterly about the fact that a “group of doctors” opened up a second MRI in a town that already had one that, according to her, wasn’t busy enough to justify having, especially when there were a few in a big city a few miles away. I mentioned that competition should drive the cost down, to which she replied that the doctors were sending their patients to the doctor’s MRI, not the other one or the big city MRIs. I asked then if the patient could pick their MRI or was the doctor only going to allow them to go to the MRI the doctor chose? Was the insurer only going to pay if the patient went to the doctor’s prescribed MRI?
The answer was that the doctor’s staff was ready to deal with all the insurance paperwork if the patent went to the “approved” MRI. One stop shopping. I’ll buy that as an answer. People can’t read bills or can’t wrap their heads around why the bill is so high, so they just go with the simplified billing. Multiple out of pocket and deductibles add up too. Seems to me if the insurance companies made it easier to deal with the billing for going away from the main doctor they might be able to get more choice introduced into the system. I’m sure the AMA would attempt to block any such activity though, because it might take some pricing power away from the doctors.
Kojeg, patients are free to patronize any diagnostic center. Last spring, my doctor sent my MRI instructions to the hospital diagnostics and I was quoted over $4K. I then asked the doctor to send my order to an independent, where it was half the cost and they handled all insurance paperwork. Independents always handle the insurance approvals and paperwork otherwise they couldn’t compete. Of course, the insurer paid the independent much less than the hospital diagnostics department. Big racket.
Good to know. I really haven’t had to deal with the medical/insurance complex beyond the basics.
I agree with all of the above. Health insurance companies and Medicaid need to have the ability not only charge more for obese people. For a majority of people this is something they can change without medical intervention, just the proper motivation. In our United Socialist States we subsidize the staple grains which help contribute to the obesity crisis and the further subsidize with SNAP. No incentive to eat healthy or work when the government is giving you free high fructose corn syrup!
Yet again more posters commenting that a bigger government roll is the solution and not the problem. Yet again there are more posts that making a profit on providing medical service should be abolished.
The medical system in the US is broken because government regulation and crony capitalism broke it. Why would anyone expect a greater government roll to improve this situation? Remove all profit incentive and there will be horrible supply shortages. It therefore follows that abolishing all profit from the system is a fast track to Hell. It is because a significant portion of the US population follows these ideological beliefs like a religion that we all suffer under the yoke of their ignorance.
I like our Host’s proposals. The two contentious issues of tort reform and policy on those who cannot afford care or who do not behave responsibly with their own health are missing, however.
+100
There is no reason (other than brain washing and indoctrination) why everyone should have to buy insurance. 99% of the time, consumers should pay in cash and get rid of the middle men — all of them.
Until the socialist FDR implemented wage controls during WW2 (and companies went around him by offering employer insurance) doctors made house calls and were paid out of pocket.
Having a 3rd party (aka insurance) cover catastrophic care is one thing, but in 99% of the cases having a middleman only serves to artificially jack up costs.
Lasik surgery is not covered by insurance middlemen — the cost has dropped by more than half in the past decade…. consumers see the cost and negotiate for better prices, and most do so without hiring unfit doctors. Most elective surgery (think ALL cosmetic surgery) has seen price reductions over the past decade. In contrast, health procedures that involve middle men (insurance) have seen costs and prices skyrocket.
Some of my wife’s drugs cost over $2000 for a three-month supply with the new HSA high deductible plan we will be using. She is on 5-7 sustained medications, some very specialized, new and thus very expensive. In desperation I checked out an outfit I saw on a commercial on CNN called Good Shepherd Pharmacy in Memphis. It turns out they are a non-profit pharmacy (Christian-based) that dispenses US sourced, FDA approved drugs for usually $0, all for a $40 a month club fee (a family plan is not much more). I checked out in the local and national press, and everything I found so far seems to be legit. They even train people looking for jobs to be pharmacy techs, even paying for their state licencing exams and fees, to help people out of work, and trying to do other things to help the health care problem. They allege that a big part of the expense of drugs today are the pharmaceutical middle men, as Mish implies, and that they are primarily trying to reach out to the poor and those with few options.
We decided to try it out recently when I found out that 4 of my wife’s expensive drugs can be obtained in 90 day supplies for $0, with another only $11 for three months.
Their website is http://www.goodshephealth.com. If anybody here wants to give them a try as I am just starting, tell them “Mike Bennett” sent you.
Thanks and Good Luck to you Dr. Future
“Some pharmacists may not be aware of cheaper alternatives because they do not know what a plan covers.”
Nonsense. All pharmacy outlets have the drug formularies for all the health plans that the pharmacist can reference.
I didn’t see anything in the article about congress colluding with the pharma companies through the “pay to play” system to write laws that protect the companies from foreign competition. Why do you think it’s unlawful for an American to mail order his drugs from Canada or other foreign nations? I could buy US made drugs in foreign countries for a third of the price that I pay in America.
So let me add another solution:
Allow US citizens to order their drug by mail from licensed pharmacies located in foreign countries.
I would guess that the only thing going on here is that health care plans derisked by purchasing longer term volume contracts with the PBM’s regarding epipens then they got caught out by the rapid return of generic options.
There is no chance that the health care plans are spending more on each transaction. Most likely each additional marginal fill of an EpiPen is currently costing the Health Plans Zero. People love to blame middlemen, but usually the serve some purpose in risk mitigation or access to capital.
Customers could purchase a vial of epinephrine and a handful of syringes for $20. The problem is ignorance of the American population, public schools, and mental degeneration of the population. Other cultures notably Mexico routinely leave a physician’s office with a vial of medical and a handful of syringes to self medicate.
For seven years the debate has been yes or no to Obamacare. These proposals could have been legislated and implemented one by one with Obamacare in place during this time. Now when they can put forth their replacement plan all they have is adjustments towards who pays the bloated costs for the existing corrupt system. We really need a second political party as an alternative to the single party system we have today.
After the EPIpen. This is what happened to me and actually almost every one else too. Because our government will pay for this gouging. I take an injectable fondaparinux sodium 2.5/0.5. There are two generics on the market. Mylan and Dr. Reddy. I have medicare and part D coverage. From Jan 2016 to Sept. 2016, the total cost (insurance paid + co-pay) was $200. I paid $35 of that. When there was pushback on the Epipen price increase, Mylan decided to increase the price of other drugs that are more likely to be taken by seniors. This injectable is a blood thinner. A good reason for to target seniors is that the insurance companies have a limit on what they have to pay for part D. After that our government picks up the cost when you enter the catastrophic coverage phase.
At $200 per month, I didn’t even enter the gap. But, starting on Oct. 2016 through Mar. 2017, Mylan and in lock step Dr. Reddy increased the price of the generic. Both increased it about $100 per month. The total cost is now. $860+ and over 400% increase and I pay $348 a 1000% increase of the total cost. This is a duopoly colluding on drug price. This is government allowed gouging.
At $860 per month, I will hit the gap, go through the gap and end the year on catastrophic coverage paid for by our government. That is: it will be paid for by everyone! It will add to our debt.
This is one mechanism that promotes wealth transfer to the upper 10%. A portion of the medicare that comes out of every one’s paycheck is now being siphoned right into Heather Bresch’s pocket.
According to NBC News, Bresch earned $2,453,456 in 2007, the year of the EpiPen acquisition. In 2015, Bresch’s total compensation was $18,931,068..Aug 23, 2016
That is a 671% increase over those years.
I guess she needs to raise generics 450+% to ensure her compensation keeps rising. By picking drugs used more by seniors she can ensure the insurance companies won’t complain because they have a liability cap. And, she knows that Washington is dysfunctional will never agree to outlaw generic drug price setting collusion and gouging.
Medicare D was a trial run to see if the public could be tricked into continuing to pay unfair drug prices. Its implementation without significant protest ushered in the ACA which uses the same technique to hide ripoff medical pricing with insurance premiums. I can see how there are many ways to push the system towards sane pricing but hear nothing but empty slogans, inaction, followed by recesses from those in congress.
I can’t understand now how anyone would consider a current member of congress or senate suitable for future office. I guess I have to wait to next year for any significant thinning of the herd in Washington
Obamacare was written by the drug and insurance companies. They own congress. Not to mention drug reps pimping their costly products to doctors with who knows what incentives. Don’t hold your breath for any significant changes.
Maybe I should see my doctor about getting some new antidepressant pills.
Costco Pharmacy has a sign next to the checkout that they must offer you the cheapest (generic) alternative.. Plus many people probably don’t know this, but you don’t have to be a member of Costco to use their pharmacy. I was just there today. Turned down buying a questionable prescription because my insurance didn’t cover it. It was $1,600. No thanks. My doctor prescribed it in case I needed it. Guess what, I don’t need it!!! My choice.
There is no reason (other than brain washing and indoctrination) why everyone should have to buy insurance. 99% of the time, consumers should pay in cash and get rid of the middle men — all of them.
Until the socialist FDR implemented wage controls during WW2 (and companies went around him by offering employer insurance) doctors made house calls and were paid out of pocket.
Having a 3rd party (aka insurance) cover catastrophic care is one thing, but in 99% of the cases having a middleman only serves to artificially jack up costs.
Lasik surgery is not covered by insurance middlemen — the cost has dropped by more than half in the past decade…. consumers see the cost and negotiate for better prices, and most do so without hiring unfit doctors. Most elective surgery (think ALL cosmetic surgery) has seen price reductions over the past decade. In contrast, health procedures that involve middle men (insurance) have seen costs and prices skyrocket.
“People should be encouraged to shop around for the lowest-cost provider of drugs and services” –Mish
If insurance or government picks up the tab, why would people care what it costs? Shopping for low-cost treatments under the current semi-socialized system is irrational, and a waste of time that can be spent in more pleasurable pursuits. Purposefully choosing the most expensive free treatment likely has a placebo effect, making people feel good about themselves for scoring a big bargain. I hear this all the time. In the real world, people brag about getting the most expensive treatment for free. Then their friends have to outdo them by getting an even more expensive treatment, and making money on it via kickbacks. A corrupt system perhaps, but very rational behaviors.
The Obamacare system is doing exactly what it was designed to do. Namely create a large pool of crony capitalists and entrepreneurs skilled at gaming the system, and whose desire to keep the profitable game going motivates large campaign donations to both major parties. An excellent con job by the Democratic party, worthy of a Golden Ponzi Prize. Protecting health care for the poor, my ass. Takes a piss poor educational system to create a gullible enough public to lap up the mainstream media propaganda and facilitate the scheme. But in terms of international scam, the Congressional Russia War Plan being celebrated with a new round of sanctions is even bolder. There is no end in sight.
If the insurance company pays only a set amount for a procedure, the insured better shop around.
How about giving credits off deductibles if a patient finds a cheaper alternative?
There are lots of things to force competition.
As a practical matter, when you see all the costs billed by surgeons and the massive paperwork involved, it is staggering and requires hiring many people. Administrative overhead likely is a huge percentage of USA medical costs, and one reason the same Indian heart surgeon working in Washington DC can do the same heart operation in his own hospital in India for one-tenth or less of his USA costs. International competition (e.g. medical tourism), just like with manufactured goods with China, has the most potential to drive prices down.
Medical malpractice insurance costs can be nearly $100k for a USA doctor, and without tort reform that cannot change. With all the administrative and lawyer overhead built into the USA system, forced competition would just be marginal reductions from very high levels. My experience was that you have to be outside that whole system as much as possible, eliminate the middle people if you can. But no doubt part of the reason I got such a good deal was that the doctor was getting rich from Medicare and insurance payments, and so could afford to do some surgeries for just his basic fee without passing on the substantial costs normally billed to Medicare and insurance (at least 400% above the doctor fee); being a doctor-owned hospital, that $5k fee was waived.
I think you absolutely nailed it. I paid cash in advance for a surgery, and it was cheaper than either Medicare or an Obamacare insurance policy (figuring premiums and deductibles). Doctor would have billed a lot more money otherwise, even wrote down the itemized numbers for me as we talked. Eye opening, to say the least. Surgeries are like assembly lines, and if an empty space is available the doctor may be willing to fill it at lower cost. Of course, not talking emergency stuff, as if you are comatose or battered in an accident that is a different story. People suffering life or death emergencies should not be turned away for lack of insurance or insolvency, ever. Minor things, okay.
I agree with Mish that we should be able to buy imported medicines. I take a vital medicine for my health that costs 1/10 as much in Canada.
I respectfully disagree with Mish’s prescription for insurance. His plan is to let everyone fend for themselves. What about undocumented immigrants, especially young children? What about the children of irresponsible parents? What about the large and growing “lower class” of folks working low paying jobs and part time jobs. These people are barely getting by. Do we deny them cancer treatment if they can’ afford it?
I don’t know what the right answer is, but I’m pretty sure that Mish’s plan is not it,
I’m an expat in London. My doctor prescribed me a rather esoteric drug priced at £200 per month at the local Boots (i.e. Walgreen, CVS, etc.). I found the exact same drug online at Drugs-Direct for £75 per month. WTF? How can the retail store be £200 but the same thing online is £75? (Drugs Direct is legitimate and my doctor recommends it to his patients)
But wait, there’s more. If I buy a “drug dispensing card” from Drug Direct for £99 (per year) my monthly cost for the drug decreases by £20 per month, an annual savings of £240 versus the £99 cost of the card for a net savings of £141. My insurance company reimburses me for 100% of my drug expenditures. I laid out the facts for the insurer but they told me the drug dispensing card is “not reimbursable”. I explained I will then forego the lower price on the drug and they will spend an additional £141 per year. They said “fine”. You can’t make this sh$t up.