| > Let's say your drug's price of $1m compares favourably to $100k/year for 40 years to manage the disease. How can a company who might only be covering the employees for 1-3 years be expected to cover that higher cost? Yes, it's essentially a Prisoner's Dilemma. If every insurance company agreed to pay for this drug, the total cost of treatment overall would be lower (and the patients would be healthier and happier). If my company decides to pay it and no other insurance company does, then when the patient leaves our network (in less than 10 years) and joins another insurance network, my company will have paid the cost but can't reap the financial benefits. There's two major differences between this scenario and classic PD, though. First, companies are allowed to communicate. We could conceivably get everybody in a room together and come up with some agreement by which everybody agrees to pay for this drug, even if patients switch insurers. Everybody wins. Patients are healthier, and insurers save money. Second, it's not a one-time decision. An insurer can change their mind from "no" to "yes" at any time. So it's more like "iterated PD", with an indefinite number of rounds. In that game, interestingly, there is no strictly dominant strategy, and altruism tends to do better in practice! So maybe you don't even need an agreement. > To be clear, this is further evidence of how stupid the US model is. In a single payer model this particular concern goes away. How do you figure? The article points out that they also had trouble convincing European governments to pay for it. You can't get Glybera anywhere in Europe or Canada today, either. The US model is arguably a poor one, but this isn't a good example of that, because every other country in the world failed at Glybera, too. |