Thinking Citizen Blog — Price Controls in General May Be a Bad Idea, But What About Insulin? The Exception that Proves the Rule? Or Not?
Thinking Citizen Blog — Thursday is Health, Health Care, and Global Health Policy Day
Today’s Topic: Price Controls in General May Be a Bad Idea, But What About Insulin? The Exception that Proves the Rule? Or Not?
Many who need insulin have to ration their supply because they can’t afford it. “Do I pay the rent? or food for my family? Or do I buy this vial of insulin?” The history of insulin pricing is downright bizarre. “In the 1920s, insulin’s three discoverers sold the patent to the University of Toronto for $1 each, because co-inventor Frederick Banting said insulin “belongs to the world.” But in the last century, the opposite has become true in the U.S., as the price of insulin has risen dramatically.” The just passed Inflation Reduction Act will lower the cost of insulin for those on Medicare, but leaves 21 million people without relief. What should be done? Today, a few excerpts from a few recent articles on the topic as well as a little history. Experts — please chime in. Correct, elaborate, elucidate.
THREE COMPANIES AND THREE PHARMACY BENEFIT MANAGERS CONTROL PRICING
1. “Essentially, there are three companies that produce the majority of the world’s insulin: Eli Lilly, Novo Nordisk, and Sanofi. There are also three major pharmacy benefit managers: CVS Caremark, Express Scripts, and Optum RX, who capture about 80% of the prescription claims market.”
2. “The pharmacy benefit mangers act as middlemen between the pharmaceutical managers and health insurers. They create formularies — or drug lists — for your health insurer and they are supposed to negotiate for the best prices of those drugs. And so, you have this very small group negotiating prices among themselves — it’s not consumers negotiating prices.”
3. The pharmacy benefit managers are paid based on the “rebates” they extract, but the higher the price the drug company charges, the higher their rebate. Hmm. Might there be a conflict of interest here?
MORE THAN 21 MILLION DIABETES SUFFERERS ARE UNDER THE AGE OF 65 AND NOT ELIGIBLE FOR MEDICARE; GLOBAL MARKET COMPARISON; CHARLIE MUNGER’S PERSPECTIVE
1. “Annemarie Gibson’s son Owen was diagnosed with Type 1 diabetes in 2011. Six years later, in 2017, her other son Thomas got the same diagnosis. The San Diego mother, 49, has health insurance. Each month, she says, she pays $400 in premiums for her family. But that doesn’t cover the cost of insulin for her sons, both of which are in their teens. That medication is another $200 out of pocket.”
2. The US price of insulin is four times that in other developed countries.
3. Even a free market champion like Charlie Munger has called the US health care system a “national disgrace” and advocated for a single payer system.
A LITTLE HISTORY — FREDERICK BANTING, CO-WINNER OF THE NOBEL PRIZE IN MEDICINE IN 1923 FOR THE DISCOVERY OF INSULIN REMAINS THE YOUNGEST RECIPIENT EVER OF THE NOBEL PRIZE IN PHYSIOLOGY/MEDICINE EVER — AT AGE 32
1. “When inventor Frederick Banting discovered insulin in 1923, he refused to put his name on patent. He felt it was unethical for a doctor to profit from a discovery that would save lives.”
2. As a teenager, Banting had served as a doctor on the front during the First World War and been wounded at the Battle of Cambrai. He was awarded a medal for heroism because, despite his injuries, he tended other wounded soldiers for sixteen hours before being ordered to stop.
3. Banting was also a very successful amateur painter. In a 2004 Canadian Broadcasting Company poll, he was ranked the fourth greatest Canadian in history — after Tommy Douglas (father of Medicare and premier of Saskatchewan), Terry Fox (athlete, activist, humanitarian), and Pierre Trudeau (15th Prime Minister of Canada). Other polls rank Celine Dion and Wayne Gretsky higher than any of the four.
NB: Banting died in a plane crash in 1941.
QUOTE OF THE MONTH:
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