If you’d like to see what a complete, total and utter mess American health care is consider this concerning new price cuts on insulin from Cigna and Express Scripts. That some certain number of people need insulin to stay alive is clearly true. That some certain further number need it to prevent further complications is also true. Insulin’s also been around for some time, there are certainly versions of it entirely patent free, should be one of those things that the free market unadorned makes cheap as chips. Like, say aspirin and tampons and penicillin and so on. No one at all in the rich world worries about the costs of these things – yea, period poverty when a box of menstrual products costs £1 is a made up scare.
So, insulin should be cheap. It isn’t. That’s not a good thing. That it’s getting cheaper is of course better:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Health insurer Cigna is lowering the out-of-pocket cost of insulin for some of its members with diabetes, launching a new program that caps co-pays at $25 for a 30-day supply of the drug.[/perfectpullquote]
Well, yes, better. But note that’s the co-pay. Not the cost, not at all, that’s just the out of pocket expense to the patient.[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Insulin is a lifesaving product for many individuals living with diabetes — it’s also incredibly expensive. Some patients haven’t been able to afford their prescriptions, or have been forced to riskily ration their supply. A new program from the health company Express Scripts, which is owned by health insurer Cigna, aims to change that by maxing out how much individuals with diabetes pay for a month long supply at just $25. [/perfectpullquote]
But why are people having to pay that much even? The answer being the absolutely terrible structure of the American health care system:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] The new Express Scripts solution itself reveals how labyrinthine and unfair the current system can be. For most employers purchasing health insurance, the change will cost little or nothing, even though it will save some patients large amounts of money. The reason has to do with the increasingly common practice of having a large deductible, or the amount a patient must pay before insurance kicks in, in a health insurance plan. This means that patients must pay a certain percentage of an expensive drug’s cost, so that some patients could have to pay many hundreds of dollars to get insulin in a single month. The issues with such plans were exacerbated, Stettin of Express Scripts said, by two changes introduced as part of the Affordable Care Act. First, it required that pharmaceuticals and other medical expenses be put under one deductible, he says. Then, the law allowed certain drugs to be covered under co-payments – small at-the-time-purchase fees — if they were preventive care. But it didn’t make clear that insulin counts as preventive. [/perfectpullquote] [perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]This came against a backdrop of gamesmanship between pharmaceutical companies that make insulin, such as Eli Lilly, Novo Nordisk, and Sanofi, and PBMs like Express Scripts and its main competitor, CVS. The insulin makers were raising their list prices dramatically. But they were paying that money back to PBMs as rebates. Express Scripts and CVS say they pass these rebates back to health plan sponsors, but they don’t reach individual patients.[/perfectpullquote]
We’re in a world of Milton Friedman’s fourth way of spending money. Other peoples’ on other people. This does not work out well as St Milt pointed out. So, what’s the solution?
No, direct government purchase and distribution isn’t it either:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Dr Andrew Hill, of the University of Liverpool, one of the study’s co-authors, said: “Anyone with type 1 diabetes should be able to buy insulin for under $100 per year, including the long-acting forms. “Insulin is an essential medicine for millions of people with type 1 diabetes, discovered almost 100 years ago. Pharmaceutical companies cannot justify charging governments $532 per person per year in the United Kingdom and $1,251 in the United States, let alone similar amounts in low and middle-income countries.” [/perfectpullquote]
Sure the pharma companies can justify it. The people spending other peoples’ money on other people will cough up for it. Why the Hell Not?
None of us really want an entirely and only free market health care system. We’d not want to have to haggle over which A&E we go to when being scraped up off the road after a car smash. Insurance, yes, but what about those who can’t don’t or won’t buy it? They bleed out? But it is a useful guide to the problems of many to most health care systems that we’d like them to be very much more free market than they are. There isn’t, other than the systems the bureaucracies have built, a reason why insulin shouldn’t be very much cheaper than it is, down toward the we don’t worry about the price level as with aspirin.
The lesson here being that sure, we’d all like to do something about that American health care system. Obamacare, putting even more technocrats in to micromanage, wasn’t it. There’s a lot more room for capitalism and competition red in tooth and claw than we currently allow.