Private enterprise bankrupting America?

[Hawker]

Once a person needs a drug, they need it.  You can't change the demand unless you kill them.  

I guess in this case demand only goes up to a point where a person can afford it, or at a point where they believe their life is worth more that their family's savings.

By the way, since I used to sell insurance and understand that it is VERY much influenced by economies of scale, I'm all for a single, or just few, monopolies owning all medical insurance. The more people in an insurance pool, the cheaper it is per person (may be another reason why it costs less in other government provided healthcare countries) . I'm just not yet convinced as to whether that insurance should be government owned, a government regulated single monopoly (like power companies), or totally free market monopoly.

There is no need for government ownership.  The French system in the Atlantic article is close to 100% private. 

What's needed is the government to backstop price negotiations saying "If you guys can't agree a price, we will step in and impose one." 

[Rassah]

I'm just worried that, in our recently global economy, that may result in the drug company moving most of their business to unregulated locations, and only selling the bare minimum to the newly price-ceiling imposed ones. But, were again back to square one, and this is an opinion on what may happen, not a fact.

[Hawker]

I'm just worried that, in our recently global economy, that may result in the drug company moving most of their business to unregulated locations, and only selling the bare minimum to the newly price-ceiling imposed ones. But, were again back to square one, and this is an opinion on what may happen, not a fact.

You really think they will stop selling to the rest of the world and only sell to the US?  After all these years of the opposite where the US has periodic prices shortages and the rest of the world has steady supply.

Or you think the drug companies will carry on selling to Canada and the like but boycott the USA, the richest market for drugs of all kinds in the world?

Compare those risks with the certainty that under the present system there people suffer needlessly and then get price gouged. 

Anyway, we are as close to agreement as we are likely to get so I'll stop

[FirstAscent]

Humanity, unconstrained and unchecked: http://www.economist.com/node/21549096?fsrc=scn/fb/wl/ar/overtherainbow

[Rassah]

I'm just worried that, in our recently global economy, that may result in the drug company moving most of their business to unregulated locations, and only selling the bare minimum to the newly price-ceiling imposed ones. But, were again back to square one, and this is an opinion on what may happen, not a fact.

You really think they will stop selling to the rest of the world and only sell to the US?  After all these years of the opposite where the US has periodic prices shortages and the rest of the world has steady supply.

Or you think the drug companies will carry on selling to Canada and the like but boycott the USA, the richest market for drugs of all kinds in the world?

Compare those risks with the certainty that under the present system there people suffer needlessly and then get price gouged. 

Anyway, we are as close to agreement as we are likely to get so I'll stop

Agreed 

[bb113]

As you say, the issue is more complicated that drug suppliers.  The US has a work permit system for everything from barbers to real estate agents.  It costs less than 2% to sell a house in the UK and its about 6% in the US because of the work permits needed to be a broker.

Not sure why you are worried about 5% of people getting most of the expenditure.  One would assume that they are dying and most of the health money ever spent on you is normally spent in the last year of your life.

Anyway, my central point remains the same.  People post that the US is on an unsustainable course.  At any point, the US can transform its economy by controlling health costs.  Its not easy as the country seems to be dominated by a rentier class but it can be done. The sad thing is that the arguments against controlling costs are always the "free market will provide all we need" blather.  

So, in the US, each year $1 trillion dollars is spent to extend peoples lives one or two years? Does this occur in other countries? I don't understand why you don't find this interesting.

[Hawker]

As you say, the issue is more complicated that drug suppliers.  The US has a work permit system for everything from barbers to real estate agents.  It costs less than 2% to sell a house in the UK and its about 6% in the US because of the work permits needed to be a broker.

Not sure why you are worried about 5% of people getting most of the expenditure.  One would assume that they are dying and most of the health money ever spent on you is normally spent in the last year of your life.

Anyway, my central point remains the same.  People post that the US is on an unsustainable course.  At any point, the US can transform its economy by controlling health costs.  Its not easy as the country seems to be dominated by a rentier class but it can be done. The sad thing is that the arguments against controlling costs are always the "free market will provide all we need" blather.  

So, in the US, each year $1 trillion dollars is spent to extend peoples lives one or two years? Does this occur in other countries? I don't understand why you don't find this interesting.

There is no correct point at which to give up the fight.  I've an aunt going through it now and she's effectively given up before she even entered hospital.  I saw someone I love die and whenever the morphine was wearing off he would start screaming for someone to save his life.  He would have given everything he had and sold his soul for even a week more of life.  There is no right answer.

Americans pay more because they are charged more for the drugs and the doctor has the option to say "Get your check book."  In the UK its free at the point of delivery so that doesn't happen.  Fix the pricing problem and you fix the end of life costing so much problem.

[Hawker]

http://www.nytimes.com/2012/03/13/business/global/india-overrules-bayer-allowing-generic-drug.html?ref=business

Here is an example of how governments are able to encourage fair pricing in a way that private enterprise cannot.

India’s government on Monday authorized a drug manufacturer to make and sell a generic copy of a patented Bayer cancer drug, saying that Bayer charged a price that was unaffordable to most of the nation.

Of course, as well as the German drug company, one other body sees this as a defeat.

The United States government, through trade pressure and trade agreements, has also tried to limit use of compulsory licensing.

So not content with price gouging the American public, the US intervenes in India to ask that a German company be allowed to price gouge the Indian public. 

[FirstAscent]

http://www.nytimes.com/2012/03/13/business/global/india-overrules-bayer-allowing-generic-drug.html?ref=business

Here is an example of how governments are able to encourage fair pricing in a way that private enterprise cannot.

India’s government on Monday authorized a drug manufacturer to make and sell a generic copy of a patented Bayer cancer drug, saying that Bayer charged a price that was unaffordable to most of the nation.

Of course, as well as the German drug company, one other body sees this as a defeat.

The United States government, through trade pressure and trade agreements, has also tried to limit use of compulsory licensing.

So not content with price gouging the American public, the US intervenes in India to ask that a German company be allowed to price gouge the Indian public.  

It's kind of ironic though. Patents encourage R & D. Would Bayer have invested in the R & D if they knew their patents were going to be ignored? Is the generic company going to pay Bayer royalties? Does the price the generic company is going to sell the product at account for the R & D costs?

Do you want to see well made movies where a great deal of effort goes into making them? Then make sure the producers are compensated for their efforts by not allowing copying.

I'm a little surprised at the irony here from both sides. Rassah wants to ignore movie copyrights, but likely thinks Bayer should charge what they want. Hawker thinks copyrights should be supported, but says screw the patents.

At least I'm consistent. Don't steal and distribute copyrighted material. Give the company that did the R & D their fair share.

[Rassah]

I'm a little surprised at the irony here from both sides. Rassah wants to ignore movie copyrights, but likely thinks Bayer should charge what they want. Hawker thinks copyrights should be supported, but says screw the patents.

At least I'm consistent.

I'm fairly consistent, too. I think Bayer should charge what they want, but also that a generics manufacturer should create whatever they want, and charge whatever they want, too. People who want brand name can pay for Bayer, and people who want generic patent infringing pills can pay for the cheaper ones. Bayer can make back their R&D expenses by focusing more on service, customized drugs, and by providing overall health maintenance (boutique medicine?). Since they will already have the drug manufacturing infrastructure in place, they can really underprice any generics manufacturer, and still keep customers by showing they they are competent, understand their products, and provide a better service. Much like it not really costing anything to set your own broken bone and stitch your own cut, but people still pay people who know what they are doing to take care of that.

[Hawker]

http://www.nytimes.com/2012/03/13/business/global/india-overrules-bayer-allowing-generic-drug.html?ref=business

Here is an example of how governments are able to encourage fair pricing in a way that private enterprise cannot.

India’s government on Monday authorized a drug manufacturer to make and sell a generic copy of a patented Bayer cancer drug, saying that Bayer charged a price that was unaffordable to most of the nation.

Of course, as well as the German drug company, one other body sees this as a defeat.

The United States government, through trade pressure and trade agreements, has also tried to limit use of compulsory licensing.

So not content with price gouging the American public, the US intervenes in India to ask that a German company be allowed to price gouge the Indian public.  

It's kind of ironic though. Patents encourage R & D. Would Bayer have invested in the R & D if they knew their patents were going to be ignored? Is the generic company going to pay Bayer royalties? Does the price the generic company is going to sell the product at account for the R & D costs?

Do you want to see well made movies where a great deal of effort goes into making them? Then make sure the producers are compensated for their efforts by not allowing copying.

I'm a little surprised at the irony here from both sides. Rassah wants to ignore movie copyrights, but likely thinks Bayer should charge what they want. Hawker thinks copyrights should be supported, but says screw the patents.

At least I'm consistent. Don't steal and distribute copyrighted material. Give the company that did the R & D their fair share.

Please read the article.  Of course Bayer gets royalties - the Indian government isn't stealing their IP.  Its merely enforcing the terms of the patent monopoly. 

[FirstAscent]

Of course Bayer gets royalties - the Indian government isn't stealing their IP. 

I'm totally Ok with that.

[bb113]

http://www.nytimes.com/2012/03/13/business/global/india-overrules-bayer-allowing-generic-drug.html?ref=business

Here is an example of how governments are able to encourage fair pricing in a way that private enterprise cannot.

India’s government on Monday authorized a drug manufacturer to make and sell a generic copy of a patented Bayer cancer drug, saying that Bayer charged a price that was unaffordable to most of the nation.

Of course, as well as the German drug company, one other body sees this as a defeat.

The United States government, through trade pressure and trade agreements, has also tried to limit use of compulsory licensing.

So not content with price gouging the American public, the US intervenes in India to ask that a German company be allowed to price gouge the Indian public.  

Interesting, lets take Sorafenib as an example. I know nothing about it besides reading the wikipedia page. From that I have found it non-specifically inhibits multiple tyrosine kinases (tyrosin kinases mostly play important roles in pro-growth and pro-replication signalling cascades). I can tell you straight away that it is not specific enough, it will lead to messed up skin, mucus membranes, immune system, and blood vessels. All of this will impede living a fulfilling life, very similar to old school chemo. For most patients, it will not be effective in the long run (the dose needs to stay low to limit side effects). The low dose will give cancer cells opportunity to mutate to metabolize the drug or become "immune" to it. Yea sure, if dosed just right it might work (cure cancer) for any individual patient, but it is a long shot. This is what current biomed science is capable of producing right now. We need more data about each patient (ie the specific mutations present in each tumor), better ways of getting this data, and to streamline the drug development process so that we can design personalized drugs.

What you get with this strategy is people kept alive slightly longer (perhaps longer than they should be, but who am I to say) so the doctors can try something else. This is not necessarily good, and definitely very expensive. On the other hand, this practice is generating interesting data that may lead to a breakthrough.

Is this occurring more often in the US than in other countries? Is that what accounts for half of healthcare expenses going towards 5% of the population?

[Hawker]

...snip...

What you get with this strategy is people kept alive slightly longer (perhaps longer than they should be, but who am I to say) so the doctors can try something else. This is not necessarily good, and definitely very expensive. On the other hand, this practice is generating interesting data that may lead to a breakthrough.

Is this occurring more often in the US than in other countries? Is that what accounts for half of healthcare expenses going towards 5% of the population?

Lets assume you only get healthcare when you need it.

There are some born with disabilities and they probably consume more healthcare than anyone else.

Then there is the rest of us.  We consume some care immediately after birth, we get some immunisation and most people have at least one accident/minor illness that requires hospital treatment.  Then we get seriously sick, need a lot of care and we die.

Isn't it obvious that the bulk of the medical expenses will be spent in that final short period?  That's when you need it and if you are not ready to die, that's when you will throw money at the doctors to save yourself.  As the old saying goes "You can't take it with you."

[Rassah]

Perhaps I've been watching TV too much (Royal Pains), but could part of the reason that 5% spends so much be because 5% is very very wealthy, and spends WAY more than average to get the best care they can? (Even if it's possibly a huge waste of money)

[bb113]

...snip...

What you get with this strategy is people kept alive slightly longer (perhaps longer than they should be, but who am I to say) so the doctors can try something else. This is not necessarily good, and definitely very expensive. On the other hand, this practice is generating interesting data that may lead to a breakthrough.

Is this occurring more often in the US than in other countries? Is that what accounts for half of healthcare expenses going towards 5% of the population?

Lets assume you only get healthcare when you need it.

There are some born with disabilities and they probably consume more healthcare than anyone else.

Then there is the rest of us.  We consume some care immediately after birth, we get some immunisation and most people have at least one accident/minor illness that requires hospital treatment.  Then we get seriously sick, need a lot of care and we die.

Isn't it obvious that the bulk of the medical expenses will be spent in that final short period? That's when you need it and if you are not ready to die, that's when you will throw money at the doctors to save yourself.  As the old saying goes "You can't take it with you."

No doubt, but is that bulk larger in the US than elsewhere?

15 million people account for $1 trillion in expenses. What percentage of these people are costing over a million dollars per year, 100k per year, etc? How much are people in similar circumstances being charged in other countries? Does the treatment/care differ? What is a reasonable amount for society to spend?

I know its the news, but for a quick estimate:

It's a hefty tab. Cumulatively, charges associated with Northern California million-dollar hospital stays in 2010 came to $5.2 billion. That's 7 percent of all hospital charges from two-tenths of one percent of all hospital patients.

http://www.sacbee.com/2012/03/11/4328036/million-dollar-hospital-bills.html

So as an estimate for the entire US, 7% of $1 trillion comes to 70 billion, while 0.2% of 15 million is 30 thousand people... for an average of $2.3 million per person in this group. That is just hospital bills though. We need to know what is spent on outpatient care, etc.

Edit= Actually we should be accounting for what percentage of the total expenditure goes to "hospital stays", which is 30-40%. This gives us an average of 900k or so for each person in the "million dollar" group. So something is wrong with the stats or estimate.

[FirstAscent]

Then there is the rest of us.  We consume some care immediately after birth, we get some immunisation and most people have at least one accident/minor illness that requires hospital treatment.  Then we get seriously sick, need a lot of care and we die.

Incorrect. It's more like this:

1. Standard medical treatment for minor to moderate things which happen several times such as: sliced finger, concussion, broken arm, skin irritations, etc. Many people do nothing about these because they can't afford them. These things add up.

2. Expensive events which typically happen once or twice or three times in a lifetime and can extend life thirty years or more, such as: appendicitis, breast cancer and mastectomy, triple bypass surgery, skin cancer removal, etc.

3. End of life care. Very expensive.

Now, scenarios 1 and 2 are simply not affordable to a huge portion of the population, often with health insurance, and definitely without health insurance. In such situations, they don't get treatment and die. Those who do get treatment go on live life for twenty, thirty, or even forty or more years.

[Hawker]

...snip...

No doubt, but is that bulk larger in the US than elsewhere?

...snip...

The percentage is much the same everywhere as far as I know.  I don't see how it could be otherwise.  When will you need medicine?  When you are sick.  When will you be sickest? In the period before dying.  So that's when you will have the bulk of your medical costs. 

What's unusual about the US system is that it costs a lot more for the same treatments. 

[bb113]

...snip...

No doubt, but is that bulk larger in the US than elsewhere?

...snip...

The percentage is much the same everywhere as far as I know.  I don't see how it could be otherwise.  When will you need medicine?  When you are sick.  When will you be sickest? In the period before dying.  So that's when you will have the bulk of your medical costs. 

What's unusual about the US system is that it costs a lot more for the same treatments. 

This is what the original Wapo article said.

[Hawker]

...snip...

No doubt, but is that bulk larger in the US than elsewhere?

...snip...

The percentage is much the same everywhere as far as I know.  I don't see how it could be otherwise.  When will you need medicine?  When you are sick.  When will you be sickest? In the period before dying.  So that's when you will have the bulk of your medical costs. 

What's unusual about the US system is that it costs a lot more for the same treatments. 

This is what the original Wapo article said.

Well its what everyone says - its true.  The point of the WaPo article is not that the US pays more but that the reason it pays more is that the US government doesn't set a price cap and allows "the market" to set the price.