FTC Accuses Drug Middlemen of Inflating Insulin Prices

51 pointsposted 10 months ago
by OutOfHere
(nytimes.com)

27 Comments

janalsncm

10 months ago

It’s a bad sign for a market when certain players’ profits are growing unconstrained. It suggests something is very wrong with a market. I believe the government’s role is at a minimum to correct for market failures and inefficiencies.

Intuitively, a healthy market should prevent this kind of price gouging because there’s a strong incentive for new players to undercut incumbents. I can’t charge too much for gas because the station across the street will undercut me. If prices are growing that isn’t necessarily a bad sign. But we have seen several areas, like rent prices, eggs, meat, and oil, where profits grew unconstrained. And that’s a strong indicator that something is wrong.

Lena Khan is very sharp and seems to be cracking down on this kind of thing. I just hope she is able to continue.

JohnMakin

10 months ago

> I believe the government’s role is at a minimum to correct for market failures and inefficiencies.

Much, maybe even half of the country does not believe this though. Until that changes nothing will.

late edit: I personally believe this, but I’ve lost faith in this government’s ability to do this role without extreme corruption, so meh. No idea what to do really.

RedAuburn

10 months ago

the alternative to "the free market" is a planned economy.

maest

10 months ago

This is what's called a "false dichotomy"

OutOfHere

10 months ago

Well, we have neither a free market nor a planned economy. We have a protected industry.

janalsncm

10 months ago

“Free” market is a bad term. The options are regulated and unregulated. If you don’t regulate at all, you get monopolies and your market isn’t any more “free”.

dimal

10 months ago

The medical industry, when presented with a chronic illness, instead of trying to cure it, sees it as a source of recurring revenue. And then that’s not even good enough. The consumers are captive, so they find a way to gouge them.

I wish people would stop calling what we have a healthcare system. We have a medical industry, which seeks to provide a minimum of medical services for maximum profit. The system is working exactly as designed.

theGnuMe

10 months ago

This is patently untrue.

Veserv

9 months ago

The textbook example of course being Sovaldi [1] the cure for Hepatitis C that was invented and then sold for ~84 K$ when introduced which massively undercut the prevailing treatments which cost ~40 K$ per year for a lifetime (40+ years of treatment on average).

Turns out, the shareholders really preferred getting a pile of money over other people who are not themselves getting a even bigger pile of money. Bunch of moneygrubbers ruining a good gig.

[1] https://en.m.wikipedia.org/wiki/Sofosbuvir

keyboardcaper

10 months ago

Explain how we keep treating essential tremor as a disease of the elderly to be managed with CNS depressant drugs, when we have known for decades the disease is entirely caused by a single substance (harmane) which can be mostly avoided by stopping coffee, tobacco and meat consumption?

There are plenty of other examples.

PoignardAzur

10 months ago

> which can be mostly avoided by stopping coffee, tobacco and meat consumption?

Wait, so you're implying the medical industry is responsible for people eating meat and drinking coffee?

keyboardcaper

10 months ago

No, just that they are taking advantage of status quo.

filoleg

10 months ago

I do not buy their take either.

However, a more generous interpretation of their comment would probably sound something more like “some substances/products get banned on the grounds of being detrimental to people’s health, but this isn’t happening to coffee/meat despite their claimed dangers. This must be due to the medical industry lobbying or controlling all world government bodies, so that the industry can extract more revenue from people.”

It is still a conspiracy theory full of holes, but imo that feels more representative of what the grandparent likely meant.

keyboardcaper

10 months ago

It has nothing to do with coffee, tobacco and meat per se and everything to do with how coffee, tobacco and meat is prepared for human consumption. It is the pyrolytic processes which form harmane from amino acids.

OutOfHere

10 months ago

https://archive.is/U8GDM

It has now come to the FTC to protect us because the FDA has been strongly aligned with big money. If Trump comes to power, however, the FTC would be on the chopping block.

htek

10 months ago

Isn't it a moot point anyway? The corrupt SCOTUS tossed out the Chevron doctrine, putting into question the "constitutionality" of administrative enforcement of Executive Branch agency rules and enforcement of federal law.

jachriga

10 months ago

PBMs finally being on the chopping block is 20+ years overdue, and the American public have consistently refused to accept that drug manufacturers aren't solely responsible for high drug prices. Having worked with the JDRF in the past, it's never been a secret that while the list price of insulin has been going up...the net revenue per unit has actually gone down (albeit only slightly). Total profit has been scaling upwards because of a massive push of type 2 patients towards insulin, increasing sales volume.

Knowingly pushing type 2 patients towards insulin when cheaper, better options for them might exist can 100% be blamed on the manufacturers; however, the oft-maligned list price increases have a lot to do with the mostly-secret negotiations between manufacturers, PBMs, and health plans (many of which share ownership with the PBMs). A big effect of those negotiations helps to artificially increase the amount of dollars spent on drugs (on paper) while also artificially decreasing the actual dollars spent, making it easier for health plans to hit the ACA 80/20 rule with elevated premiums.

All of this to say...none of these price negotiations or middlemen entities (I'm counting health plans as middlemen between patients and their drugs...) should be targeted by the FDA, as that's not their responsibility. The FDA should be focused on the clinical side only as much as possible. Much to my chagrin, some amount of credit for PBMs and drug rebates being part of the modern conversation goes to the Trump administration.

howard941

10 months ago

They may be hitting the 80/20 rule W/R/T PPACA premiums but the out of pocket for almost everything not negotiated by the executive branch is out of this world. Common generics have become crazy expensive. Don't even go to the on-patent meds: They're unaffordable for all but large employer plans and the policies covering Federal employees.

jachriga

9 months ago

They only hit the 80/20 because of the account-keeping shenanigans allowed by the PBM/manufacturer/plan negotiations. It would not surprise me if the rebate system were completely done away with and health plans had to spend the real amount compared to what they "spend" now, that premiums would go down and/or coverage would go up. I don't believe for a second that there are any such backroom negotiations involving a mostly-invisible 3rd party (the PBMs) that benefit patients in any way.

user

10 months ago

[deleted]

hirvi74

10 months ago

What does the FTC expect in for-profit healthcare system?

credit_guy

10 months ago

Are you aware that all grocery stores are for-profit? Also all restaurants, all Apple stores, and all Steinway piano stores.

Shawnecy

10 months ago

Are you aware that all of your examples are luxuries that won't end someone's life if they choose not to consume those services/products? If people choose not to take insulin, then their only alternative is death.

janalsncm

9 months ago

Grocery stores are pretty essential, not luxuries.

Suppafly

10 months ago

That's literally what middlemen do, they wouldn't exist if they couldn't extract value from the items they pass along.