Prescription Meds Cost

[PhilipDT]

In theory I think the system we have here in Argentina is the best way to manage healthcare.

The state provides a public health care system that covers everyone's medical needs.

If people want more than what the public system provides then they can buy private medical insurance which gives them more convenience and benefits. They get the service the want while also removing the cost of their care from the public system.

The execution here has some serious flaws on the other hand. Namely, since the government dictates what benefits the private plans have to provide and how much they can charge the benefits of private sector administration are about what they are for having private commuter train operators.

 

[Montauk_Project]

Drug companies in Argentina make 1000% profit (one thousand percent) on many medicines. God knows how much they make in the US! And then they want to raise prices. Some things are not mere consumer goods, and health is one of them.

 

[thorsten]

Drug companies in Argentina make 1000% profit (one thousand percent) on many medicines. God knows how much they make in the US! And then they want to raise prices. Some things are not mere consumer goods, and health is one of them.

I think one has to differentiate between 2 aspects:
1. High prices due to patents: in case you invent a new drug and put a patent on it, you have a timed monopoly and can charge higher prices. While one obviously wants to get the same product cheaper (e.g. through generics), a mechanism is needed to enable pharma companies to cover their cost for the R&D of the medicine, otherwise you would not have any more new meds...
2. High prices due to distortion of the market: this is in all cases a bad thing, as it only profits a small group of pharma companies while the whole population suffers under higher health cost and/or worse care.

As far as I understand, the US has a weird system where the base price is incredibly high, while insurance companies get huge discounts. In general, structural problems like that should be always removed: even if the actual price (after the discount) would be comparable to a market price, it leads to disadvantages to those without insurance (basically they cannot afford even simple treatment) and favors a small number of huge companies (as you get bigger discounts the more you order) instead of fostering a strong competition in the market.
As a side note, I have the impression that the supermarket chains here have a bit similar pricing model: the base prices are higher compared to many other companies, while you have basically every day a discount depending on which credit card you are using. And similarly, it puts people without the right credit card in a negative position (as the pay the higher price) and overall leads to inefficiencies.

 

[PhilipDT]

Drug companies in Argentina make 1000% profit (one thousand percent) on many medicines. God knows how much they make in the US! And then they want to raise prices. Some things are not mere consumer goods, and health is one of them.

Drug companies in Argentina make a lot because they're just producers and their labor costs a very low. They don't develop drugs, they either produce new drugs under license or generics that are already in the public domain. This is all supervised by pharmacologists or biomedical engineers who make a fraction of what their US or european counterparts do.

There are no pills made of solid gold, the margins almost always massive. The real cost is in coming up with the drug. That's why new meds are so expensive.

It's easy to say health is not a mere consumer good. Just like you could say that education is not a mere consumer good. Even so everyone needs to get paid. The teachers, principals, and the janitors too. The people who make the white board and the desks have to make a profit. The guy who designed the network. The author who wrote the text book, the publisher who printed it, etc.

 

[PhilipDT]

As far as I understand, the US has a weird system where the base price is incredibly high, while insurance companies get huge discounts. In general, structural problems like that should be always removed: even if the actual price (after the discount) would be comparable to a market price, it leads to disadvantages to those without insurance (basically they cannot afford even simple treatment) and favors a small number of huge companies (as you get bigger discounts the more you order) instead of fostering a strong competition in the market.

To add another level of distortion on top of that, if you're poor and have no insurance, almost all of the producers of the really expensive drugs that treat chronic conditions provide access to them at steep discounts or free (sometimes in conjunction with a charity) directly to the consumer.