Medicare + Medicaid has been prohibited from assisting negotiation of drug price between pharmacy + drug company for a few decades. That is set to change in the future id my understanding.
I have private health care insurance so my insurance company would try negotiate the price down.
I agree with other commenters saying basically, drug companies all around the world do R&D, are happy to sell drugs at cost in England or Somalia, but will aim to make money in US selling drugs with a healthy profit margin here.
> Medicare + Medicaid has been prohibited from assisting negotiation of drug price between pharmacy + drug company for a few decades. That is set to change in the future id my understanding
> so my insurance company would try negotiate the price down.
Do they have any incentives to do that though? If their profits are fixed at a specific % wouldn’t they be incentivized to spend as much as possible so that they could increase premiums (as long as all other companies play along)?
You’re talking about something theoretical. I’m telling you what actually happens.
Insurance companies lose business when their premiums are unnecessarily high. In the long run, all their prices go up, but those who manage rising costs better (and provide better service and all that other stuff), grow their businesses.
I think you're being theoretical. Insurers can only increase profits by inflating medical costs.
"Insurers are supposed to spend 80% of every dollar on care and only 20% on administrative costs. However, instead of lowering premiums, the insurance companies have been incentivized to increase costs so that they can make more money."
I have private health care insurance so my insurance company would try negotiate the price down.
I agree with other commenters saying basically, drug companies all around the world do R&D, are happy to sell drugs at cost in England or Somalia, but will aim to make money in US selling drugs with a healthy profit margin here.