[benmaraschino]

Exhibit A: Vimovo. One pill, consisting of two drugs that have been around for decades, and are available over the counter at any pharmacy. If bought separately, a month’s supply of these drugs would run you maybe $40, at most.

Vimovo, on the other hand, is routinely charged to insurers by pharmacies at prices ranging to over $3,000 for a month’s supply. And somehow insurers are willing to pay for it, to the tune of nearly $500 million a year. More details here from ProPublica: https://www.propublica.org/article/horizon-pharma-vimovo-com...

[zaroth]

I suspect that something very fishy is going on between when the money is “paid” by the insurance company to the money that actually makes it to the pharmaceutical company. I suspect most of this money gets rebated back to the insurer in some form or another.

Reading your link it’s actually an interesting story of an absolute fraud designed to thread a perfect path through all the existing regulations and checks & balances.

[refurb]

There have been a lot of fishy dealings with the drugs that came from Valeant.

They would charge outrageous prices for drugs that were just a combination of generics.

They funneled the scripts to a pharmacy they partnered with. Most insurers would not cover the drug, but the pharmacy knew all the tricks. 80% of claims might get rejected, but they made a ton of money off the 20%.

[refurb]

That’s a great example of how stupid insurers are. That drug have had zero sales, but they sneaked in the back when no one was looking.

[coryrc]

Wrong; insurers' profit is limited to a percentage of expenditure in the ACA. Increasing expenditure is the only way to increase profit.

[bduerst]

Which is why ACA also instituted marketplaces and insurance standards, so that competition across substitute services keeps premiums competitive.

E.g. Anthem is more than free to double the premium on their bronze plan to increase net profits, but then customers are free to swap in bronze plans from Cigna, Kaiser, or any number of competitors that didn't.

[ddingus]

Not really. Networks complicate all of that severely.

This massive price escalation was called out as a definite outcome by progressives seeking a public option at the time.

The percent cap was touted as the fix.

Insurers bought facilities and raising dollar amounts kept revenue near expectations.

[bduerst]

How exactly does networks complicate that?

Insurers had to scale (i.e. increase costs) after ACA was implemented because number of uninsured Americans went from 18 to 11%.

[hakfoo]

Networks complicate things by reducing demand elasticity.

For example, look at Maricopa County, Arizona. It's like 100km across and includes both a major capital city (Phoenix) and several suburbs with 6-figure populations (Mesa, Chandler, Glendale).

Many of the marketplace health plans* would have networks which focused around central Phoenix. If you wanted to see an in-network doctor or urgent care and lived at the fringes of the county, it was a 30-minute drive or more.

This meant people in the fringes had to pick the few plans that covered nearby facilities, even if there was a significant price difference.

* This was during the first few years of the marketplace. By 2017 or so they were basically down to a single insurer, so even that degree of consumer leverage was gone.

[ddingus]

Have you ever tried a policy change?

[refurb]

It’s not that simple.

Insurers compete on the employer market for premiums. If you keep jacking up your premiums, you may find an employer dumps you.

And the pool of money is finite. Getting a better deal on a drug means you have more money to spend on other care that might get you more members.

That said, I agree the 80/20 ACA law is a stupid way to try and control costs.

[PopeDotNinja]

Insurers just pass the costs through to consumers. Health insurance premiums have been going up a stupid amount, too.

[bduerst]

Which is why legislation like the affordable care act that limits premiums helps keep stupid behavior from insurance companies in check.

[PopeDotNinja]

Regarding the ACA, as I understand it, there's the 80/20 rule that states insurers must spend 80% of what they make from premiums on providing & improving healthcare. [1]

The problem with that is there's no cap on what premiums should be. So if you charge 10K in premiums, and keep 2K, there's nothing in the ACA that is preventing you from raising your rates to 15K to keep 3K.

Please correct me if I misunderstand how this works.

[1] https://www.healthcare.gov/health-care-law-protections/rate-...

[bduerst]

Except that the ACA also instututes marketplaces and enforces insurance standards, so that consumers can shop and switch between substitute services if one insurer tries to hike premiums.

[tracker1]

Except they're ALL hiking premiums... What it comes down to is adding fiduciary responsibility to act on behalf of their clients' interest in negotiating rates, which they don't do and stopped doing.

[toast0]

Where I am, the 2019 marketplace has two providers, but one of them has a very limited network, so I can't do anything in network without driving at least 30 minutes. So, that's really just one provider and I get to pick which metal I like. What I really wanted to know, but couldn't tell is if I hit the out of pocket max, is there any difference in what's covered by plan.

It may be a better marketplace than before, but it's still a pretty shitty marketplace.

[PopeDotNinja]

A few months ago, when I looked at buying private health insurance via the exchange in California, I had never heard of any of the insurance companies & none of them would let me see my own doctor. I was not impressed.

[ddingus]

Exactly right. And if you happen to have some preexisting condition, and who doesn't, individual policy prices are insane.

[zaroth]

Actually the insurers wisened up and largely stopped approving claims for this one.

[ChrisLomont]

Doesn't the same argument apply to the elements making any drug? Carbon, oxygen, etc.. are all pretty cheap. But there is significant value in mixing things properly and getting that mixture tested and through the FDA.

If it's trivial to take these cheap drugs and mix them, then why don't people simply do that?

[sooheon]

Check out the propublica piece. Their analogy is more akin to putting pb&j in one jar. As to why it happens? People are likely to do what their doctors say and what their insurance will cover. Pharma has ways to influence both.

[pxeboot]

Because people just accept what is prescribed, and neither the customer or doctor is aware of the actual cost?