[ohazi]

> In the U.S., the same government price of $390 per vial will apply. Because of the way the U.S. system is set up and the discounts that government healthcare programs expect, the price for U.S. private insurance companies, will be $520 per vial.

Sigh

How many years of normalizing and internalizing the utter insanity that is the US medical industrial complex does it take to be able to just say that with a straight face?

[_pmf_]

> How many years of normalizing and internalizing the utter insanity that is the US medical industrial complex does it take to be able to just say that with a straight face?

I hate to tell you, but it's not better in Europe just because the racket is obfuscated by several more layers.

[quietbritishjim]

Please back up such an unlikely sounding claim with several excellent sources.

Here in the UK, there is exactly one layer: the NHS. It negotiates prices directly with drug suppliers, and as the sole buyer (monopsony) is able to get a great deal. It also sets the prices paid by consumers (the prescription price), which is a flat price charged for all drugs (yes really all of them) and is currently £9.15 (about 11 USD) for a prescription (i.e. a full course of multiple tablets of the drug). If you are given drugs in a hospital as part of an inpatient treatment the charge is usually nil.

[arpinum]

Drugs are more streamlined, but most of the NHS looks a lot like the US system. There are 8 major private electronic health systems, and many have not signed interoperability pledges. 145 CCGs. Foundation Trusts, remember just 10 years ago GP Practices would become part. Quasi-private GP Practices. Mergers going on every year (195 CCGs to 145 last year). Funding comes out of a myriad of mystery buckets (winter funding).

[quietbritishjim]

The NHS employs about 1.4 million people (and I don't think that includes GP practices). Of course an organisation that big is going to have quite a bit of structure. I never intended to dispute that.

I was disputing that specifically drug purchasing is a "racket" with "more layers" the US system, which is what the parent comment claimed. None of the organisations or organisational units that you mention have anything to do with drug price negotiation, so I don't see what they have to do with the conversation.

[_pmf_]

The "Kassenärztliche Vereinigung" in Germany is a tremendous lobbying force for doctors, and they are fully driving health policy here. I've yet to see them do anything positive for me as a patient.

Glad to hear things in the UK are so jolly.

[splintercell]

Are these drug companies British?

[hkt]

Some. American drugs companies too, though. They want our bargaining power to be mediated by the coming UKUSA trade agreement so we have to pay through the nose like Americans do. At the moment they either sell to us or lose out on our custom (the NHS is not above refusing to buy a drug on expense grounds). They're trying to make this impossible for us to do by levering political power, because single payer healthcare doesn't permit them to abuse their market power over here.

[votepaunchy]

> They're trying to make this impossible for us to do by levering political power, because single payer healthcare doesn't permit them to abuse their market power over here.

You’re saying that if you joined some sort of union that you could negotiate from a much stronger position, similar to single-payer healthcare?

[splintercell]

Have you ever looked at the amount of money we spend on pharmaceuticals a percent of our total Healthcare spending?

[m12k]

What do you mean? One of the points of government funded health care is that you get rid of several layers of needless indirection and profiteering. You basically vertically integrate a big chunk of the industry and have it work together to minimize overall costs instead of maximize profit of each individual component.

[furyg3]

Not here in NL. My monthly premium for myself and child is around €130 for a premium plan with a €500 yearly deductible, and most normal costs and doctors visits are excluded fro this. I had an injury that required surgery and physical therapy and did not hit this deductible.

Someone I know had cancer which required two years of therapy and also somehow did not hit their yearly deductible. A friend had a burnout and needed therapy over a long period of time, also very little personal costs.

This premium that I pay is more or less matched by my employer, that money goes into a fund to balance out insurers who have more risky demographic coverage. The government does offer subsidies for people who cannot afford the monthly premium, this obviously comes from taxes.

That’s pretty much it for funding the system. Personal premium + employer premium + tax subsidies for the poor. Dutch people complain about costs ‘spiraling out of control’, and it is true that over the years healthcare has gotten more expensive, but these criticisms are laughable when compared to the US.

It’s possible to fix the US healthcare system. Just pick any other western developed nation at random and do what they do. You’ll be better off.

[hkt]

In the UK we pay a fraction of what companies in the US do. See also, our nightmarish trade negotiations with the US: https://www.theguardian.com/politics/2019/nov/01/nhs-drugs-b...

Not a scholarly article, intentionally. I wanted to give a flavour of the existential (to our health system) nature of the problem of US style drug pricing.

There's also the small matter of pricing varying highly by country. Another more emotive example: https://www.drugwatch.com/featured/us-drug-prices-higher-vs-...

See also: https://www.drugwatch.com/featured/us-drug-prices-higher-vs-...

So actually, it is substantially better in Europe.

[kenhwang]

Europe is one of the primary reasons US drug pricing is so messed up. Many European countries negotiate drug pricing on cost to manufacturer (practically nothing) with a negotiated slim profit margin. Then the drug companies just offload the rest of the R&D cost onto the US consumer. But, almost the entire cost of a drug is in the R&D.

Imagine if the rest of the world only paid for CPUs based on the per unit cost of silicon but none of the fab or engineering cost. So $20 CPUs for the rest of the world and $20k CPUs for the US since the US consumer has to cover the 10s of billions for fab/R&D cost while the rest of the world only pays for the silicon.

That's what happening with drug pricing right now. People _need_ medicine, which is how we got into this mess of drug pricing since it's frowned on to price people out of medicine. But European countries aren't exactly poor struggling post-war economies anymore. They can afford to shoulder more of the R&D cost instead of laughing at the US subsidizing the world.

[flumpcakes]

You're subsidising paying other Americans extremely high salaries. You're also subsidising share holders and C-level people's luxury lifestyle. The same drug wouldn't cost $2b to create in any other country. It's not Europe's fault you treat basic healthcare like any other business to make money from.

[kenhwang]

If that were actually the case, Europe should've had a huge competitive advantage in drug development and priced the majority American drug companies out of business. Isn't anywhere close to happening, is it?

[danaris]

The barrier to entry to the pharmaceutical business is fairly high. Not only is it a pretty heavily regulated field (for damn good reasons), the equipment needed to start a drug company is significant and expensive, and the time between first investment and first payoff can be very long.

[flumpcakes]

Various reasons, including patents. Cost is not a "huge competetive advantage" or literally everything would be produced by other countries with fewer regulations for cheaper. There's plently of protected industries in nearly every country.

[RobertoG]

So, are you saying that the European countries should stop being so selfish and stop negotiating collectively to get better prizes?

Would not be the logic solution that the USA started negotiating as a block too?

[kenhwang]

The US negotiating as a block would be the logical solution. And the US sorta does, between the megasized insurance companies and Medicare, it's not a single block, but it's far from nothing. But the US isn't going to bankrupt a US company over it. So then it becomes a nation-nation negotiation via trade pacts (which are happening, much to Europe's annoyance).

Pharma is just a zero sum game; for the US to win, someone has to lose.

[DanBC]

> Then the drug companies just offload the rest of the R&D cost onto the US consumer. But, almost the entire cost of a drug is in the R&D.

How much do drug companies spend on advertising in EU vs US?

[kenhwang]

Usually the marketing spend ranges from half to double the spend compared to R&D. However, advertising (specifically the direct to consumer variety that's uniquely allowed in the US) only consists of ~10% of the marketing budget. Over half the marketing budget is free samples and a quarter is physician outreach/training, which happens in both the EU and US.

So there's potential for ~3-7% cost improvement if direct-to-consumer advertising is banned in the US.

US pharma R&D intensity averages ~40%, which is more than double of Europe's average intensity.

[candiodari]

Those are the numbers that always make one wonder. If you look at margins of pharma companies, you see the potential for price improvement: from 2% to about 20%.

And this is not what anyone of the people complaining are looking for. That would make somewhat optimistically make Remdesivir $350 per vial, and that pricing would cause ... exactly the same outrage.

The actual issue is "too many" medicines. More and more effective and specialized medicine. But, of course, that you can just sidestep as an individual (you'll have to have your doctor on board, but that may be doable). It boils down to the same thing: if you're willing to forego the most expensive treatments and best possible outcomes you can avoid a lot of the financial problem. There's just zero willingness to do that.

Best possible treatments, no matter the human effort required to do that, at zero cost to anyone (not carried by the actual patients, not collectively carried by insurance, not carried by government, not by church, institutions or charitable giving). And we're not willing to give anywhere (for instance, cheaper drug trials, something the government could simply decide to provide at frankly minimal costs). This is not happening.

There just doesn't seem to be any solution here that I can see.

[nix23]

Not sure why they down-vote you, you didn't said anything about 'free' healthcare, and you are absolute right, the 'customer' does not see much of those layers, but ask any Healthcare-worker that has to work with insurance...they can tell you story's!

[flumpcakes]

Very few people have private health care in Europe, at least in the UK - they are either comparatively very rich or have a job that provides it (again, very rare and probably a job that pays very well to begin with).

You will see a lot of buying power from free health care providers as they represent tens-hundreds of millions of people - they will most likely pass on a price gouging drug in favour for others. They won't pay market rate, whatever the drug manufacturers say.

[mathieuh]

The most relevant industry to this board (IT) usually provide private healthcare though. I’ve had BUPA from work since I graduated. Granted this is across only two jobs but when I’ve been applying for jobs in the past private health has always been one of the perks

Maybe it’s different in the start up world but larger companies all seem to offer private health insurance.

[hkt]

My experience in IT in the UK is:

VC backed companies will sell you private health insurance as a perk. It is rarely useful. I suspect it is a way of funnelling money at low rates of tax to the VC's other holdings in at least one case, but have no proof. It certainly funds the privatisation agenda at low cost to the investor, though.

Seniority is signified through leadership or contracting. The latter you can get private insurance as a perk through your own company, but again, it is useless.

Most permanent non-lead roles I've had that have been more conventional haven't had it, though.

[RobertoG]

When comparing healthcare costs between USA and Europe, everybody speak about the public systems vs. USA, but I would like to see the cost per person of the private plans in Europe against the cost per person in the USA.

For what I read about USA, in HN and in other places, I suspect Americans would be surprised too. Those private plans have a very hard competitor in the public system, so, somehow, at least in my area, they manage to be pretty affordable.

[pintxo]

in Germany, private plans are often 1/2 of the public plan. But only at young age, prices will go up with age and switching back in the public system is legally blocked (for most cases).

Also private plans are mostly only available above a certain income level. So the demographics are skewed towards better educated, richer and thereby healthier people in the privat plans.

[flumpcakes]

The only place I've ever had private healthcare in the UK was from an American company (BlackRock).

[nix23]

>Very few people have private health care in Europe, at least in the UK

In Europe at least in Switzerland quite many have private health care (the price difference is quite small because the obligatory insurance is tremendously high already), and if you think 'we' are rich..you are wrong.

[flumpcakes]

> and if you think 'we' are rich..you are wrong.

Switzerland is one of the richest countries in Europe - it's GDP/capita is the 9th highest in the world.

This place (news.ycom) really has a skewed sense of reality. "Oh, you only got $100k offer straight out of University? That's a low number."

99% of the world lives far below anything you consider average.

For a website full of smart people, you all have trouble recognising your own extreme privledge.

[polotics]

Switzerland is a complete outlier in this respect, Zürich is much closer to Boston than to Paris.

[nix23]

No not really...that comparison is completely wrong.

[kgwgk]

The obligatory insurance is also private.

[nix23]

From private company yes, but with private we mean the 'luxury' addon...the obligatory is regulated by the state, but administered by private company's.