Monday, July 08, 2019

Private Drug Market


After Never-Trump Republicans trendily lament exploitation of immigrant children at President Trump's detention centers, contemptuously dismiss GOP opposition to same-sex marriage, and cheer the nation's women's soccer team for winning the World Cup, they still exhibit a conservative blind spot on several enduring, less sexy issues. One of these is health care.

Criticizing Kamala Harris' rhetoric on school busing and elimination of health insurance companies, George Will argues "One cannot unring a bell and Harris cannot erase the fact that she has repeatedly said she wants to take from 217 million Americans -- 80 million more than voted in 2016 -- something most of them like."

This is questionable. A Real Clear Opinion research poll conducted a couple of months ago found that when people were asked about support for health insurance obtained "through the government’s Medicare system," respondents were overwhelmingly in favor. More importantly in light of Will's allegation, they were asked

“Do you support or oppose Medicare for All, which is a system that will eliminate all private health insurance companies, and where all Americans, not just older ones, get health insurance through the government’s Medicare system?” Even with that caveat, 55% were in support, with 34% opposed.

Very likely, Americans suggested opposition to eliminating health insurance companies when the question did not suggest an alternative. If an individual were asked whether she wants those companies to go away, and not given an alternative, she might believe they would be replaced by nothing. Given a person a choice of the current system and the current system with no health insurance, it's likely they'd be far more enthusiastic than Will suggests.

But of course there is an alternative, the benefits of which are highlighted by the pharmaceutical market, and especially in the case of insulin. Natalie Shure writes in The American Prospect

On June 22, 2017, Alec Raeshawn Smith, a recently promoted restaurant manager with Type 1 diabetes, left his local pharmacy empty-handed. He’d gone in to pick up a month’s worth of insulin supplies, which he assumed would set him back around $1000—the amount he and his mother Nicole Smith-Holt had budgeted the month before when he turned 26 and, under Obamacare rules, had to drop off her insurance coverage.

For Alec, that price was already steep: Even with his promotion, he was making $35,000 a year with no benefits. He and Smith-Holt had combed through Minnesota’s Obamacare marketplace for months in search of a decent plan, but the affordable ones all had sky-high deductibles. That meant that he’d be paying full price for his insulin for months before his junk insurance kicked in, on top of hundreds of dollars in monthly premiums—sucking up some 80 percent of his take-home pay once he paid the rent. So he made a rational decision: He’d go uninsured, save the cost of the premium, and just pay for his meds out of pocket, while racking up work experience that could serve as a springboard to a better position with health insurance.

As it turned out, it wouldn’t have made a difference if Alec had been insured or not: The price of his insulin had apparently gone up again to $1300, which was more than he had in his bank account. Perhaps he felt embarrassed, too proud to borrow money so soon after finally moving out of his parents’ place. Perhaps he didn’t want anyone to worry about him, and figured he could keep his blood sugar down until payday.

So he left. He never told his mother and he never told his girlfriend. Five days later, he was dead.

The autopsy later determined the cause of death to be ketoacidosis, a complication of diabetes typically brought about by not taking insulin.

Shure recounts the history of  the "insulin racket" and notes a recent, published study which determined "one in four diabetes patients reports rationing their insulin due to costs." She quotes the lead author, a clinician who has found "that one-in-four number only reflects people who actually used less insulin because of costs, but other people make trade-offs. They may be spending less on food or other necessary items, even on other medications." Shure explains

U.S. drug-pricing negotiations are the responsibility of individual insurance plans, of which there are thousands. Each of them has relatively little leverage against price hikes, which drug manufacturers have every reason to push as high as possible to pay off shareholders, whose investments were predicated on the promise of some of the highest returns in the stock market. If you’re a pharma exec whose goal is to maximize short-term profits, then jacking up prices on a drug like insulin—whose millions of patients are practically captive—is a sensible strategy.

The result has been predictable and

Average deductibles have quadrupled in the past decade, nearly half of all people with employer-based insurance have high-deductible plans, and co-pays have risen or been replaced with coinsurance, a frequently higher percentage of the overall price. Taken altogether, the deterioration of insurance quality and rising list prices mean that individual patients are bearing more and more of the brunt of high drug costs.

Drug prices are too important to be left to the private market.  Shure understands

Removing all financial barriers to insulin to ensure that all patients have an uninterrupted supply of it would require governmental intervention, not just relying on multinational companies to devise better deals. It might even demand making moves that end our reliance on those firms to make the drugs we need most.

Bernie Sanders' Medicare for All proposal, a single payer system more generous than existing Medicare, would guarantee that patients would get the prescription drugs they need. (He also has proposed a measure encouraging development of generic drugs.) However, there is a long way to go to enacting that and some patients, such as the tragic Alec Smith, have a very short time to get there. Meanwhile, the prescription drug problem persists- and you won't be surprised to learn that someone has A Plan For That:

Elizabeth Warren has written legislation providing for the public manufacturing of generic drugs, and explicitly stated in the bill that generic insulin would have to be produced within a year of passage.

George Will may not like it- he definitely does not like it- but two Democratic senators, Warren and Sanders, running for President would like private insurance to vanish. (Depending on the day of the  week, Kamala Harris would agree.) People need access both to the care they require and to preventive care before they fall victim to diabetes or another chronic disease. And if the plan is properly framed, voters would agree.








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