[mdasen]

Let's say that you write a bill "you can't sell insulin for over $100". If insulin sellers refuse to sell for less than $100, there's no insulin available.

However, the bill might also say that insurance companies must keep the out-of-pocket costs under $100 or that the state will make up any amount over $100.

In reality, it seems unlikely to harm insulin availability since most jurisdictions have cheap insulin and the cost in the US seems to be significantly higher.

Theoretically, price caps can be set low enough that no one will produce and sell an item. If you capped the price of computers at $100, no one would be making and selling computers and you wouldn't be able to find a computer without going to the black market. Countries like Venezuela have tried price caps on goods and what has happened is that those goods can't be found. Retailers won't sell items for less than they can get them from a supplier and suppliers won't sell for that price, possibly due to the cost of inputs, production, shipping, etc.

In this case, there's evidence that prices have been inflated unfairly with insulin and therefore this just hurts suppliers' margin without really changing availability. However, there is the potential that suppliers won't work with the price restriction. Let's say that you're CVS and you're buying an insulin drug from BigPharmCo at $150. Illinois has a new law such that you can't sell insulin for more than $100 so you tell BigPharmCo that you need supplies at $60 so that you can sell it for $100 and pay for stores, employees, etc. BigPharmCo decides that they'd rather not sell it to you at $60 because they'd rather write off Illinois sales all together rather than reduce their price to $60. Illinois is only about 4% of the US population. If you lower your price to $60, you're losing 60% of your revenue. If you write off Illinois, you're only losing 4% of your revenue.

Now, you might argue that they'd only have to give CVS a discount on supplies for Illinois, but that would be hard to enforce. It seems legal to ship medical stuff across states. Would it be legal to prevent someone from entering into interstate commerce they've always been accustomed to? I have no idea. Maybe suppliers would only supply a certain amount they deemed necessary for the Illinois population to CVS at the discounted price. However, then why wouldn't CVS just stop selling in Illinois and sell the discounted insulin for a higher price in other states?

Even if one can prevent cross-state shipment of insulin, suppliers might deem it worth their while to make an example out of Illinois. If they don't make an example out of Illinois, other states will likely follow. They might get some bad press, but at some point the state would need to act to protect the welfare of its people and repeal the restriction.

I'm not saying that any of these things are good or righteous. It's just harder to force people to do what you want than many people think. Given that forms of insulin are generic, maybe the answer is that we need more generic manufacturers to make it competitive.

Again, I don't think shortages are likely to happen. GoodRx shows generic Humalog available for under $70, but many others are much more expensive. I don't know enough about insulin prices to really know what will happen. However, in many instances, price caps haven't been really effective at helping people.

[nybble41]

The actual bill[1] says (more or less) that insurance policies that include prescription drug coverage must cover insulin with a maximum of $100 out-of-pocket expense to the insured for a 30-day supply (page 12 lines 12-18). That $100 limit is indexed to the medical component of the Consumer Price Index (page 13 lines 1-6). It doesn't directly affect the amount suppliers receive, and the state isn't offering to reimburse anyone for the difference. If you don't have insurance which covers prescription drugs then the limit does not apply.

This will most likely lead to higher insurance premiums for policies which cover prescription drugs. Certainly the insurers and suppliers aren't going to be the ones paying for it.

[1] http://www.ilga.gov/legislation/fulltext.asp?SessionId=108&D...

[rjmunro]

Do we have any idea how much higher the premiums are likely to be?

Google says there are 1.5-3 million insulin users in the USA - lets call it 1% of the population. Let's say that their drugs cost $300 / month, but they pay $100. The extra $200 will be shared between 100 people's premiums, so $2 extra per month.

[nybble41]

The media is citing 1.3 million in Illinois alone with diabetes requiring insulin (out of about 12M population; over 10%) and at least some cases where the cost is over $1000 per month. Assuming it averages out to $300 per month as you said, however, that's still $20/mo. extra per person assuming the difference is distributed uniformly across all insured individuals, and that all individuals in the state are insured.

[save_ferris]

> Theoretically, price caps can be set low enough that no one will produce and sell an item.

But studies show that the US currently pays as much as 7x what the UK does for insulin[0]. How can insulin be so cheap in some places but so expensive in others to the point that manufacturers stop making it?

0: https://insulinnation.com/treatment/u-s-pays-much-uk-insulin...

[vasilipupkin]

because UK subsidizes it. But UK residents pay 33% of GDP in taxes vs US pays only 27%, according to this https://www.oecd.org/tax/tax-policy/global-revenue-statistic...

so it comes out of the higher taxes.

[djpowell]

Those prices have nothing to do with subsidies. It is showing that the NHS pays a fraction of the US prices for the same insulins.

Diabetics are exempt from all out-of-pocket prescription charges though, so that part is subsidized.

[AdrianB1]

Then why isn't US buying insulin from UK's suppliers at a fraction of the current price?