from Hacker News

Illinois governor signs law capping insulin costs at $100 per month

by ga-vu on 1/29/20, 2:57 PM with 406 comments

by Someone1234 on 1/29/20, 4:08 PM
I'm really past the whole "pharma need to charge high prices to fund research" line of argument. Aside from being factually untrue (research funding is dwarfed by marketing for example[0]), it is also arguing for a continued unhealthy relationship with pharmaceutical care.
A large amount of research is currently publicly funded. Either via public academic research or directly. When that research bears fruit it is often given away almost at-cost (or below cost when you take into account the larger research landscape) to pharma companies who then privately profit off of it.
Pharma companies are profiting off of your tax dollars and then turning around and profiting off of you too. Sure, the benefit exists, but this whole model is broken as all heck.
We should just scarp for-profit pharma development as an industry, increase public funding of research, and drug production factories should be a modest profit venture (e.g. 20% of the wholesale cost). Looking more like the generics industry today, where they produce, they don't develop.
Why do we need a private business to develop drugs at a 40%-1000%+[1] margin when the taxpayer could do it at nearly 0% margin? We've chosen to make it this way, other countries haven't, and we see plenty of drugs developed via public institutions around the world.
[0] https://www.bbc.com/news/business-28212223
[1] https://economictimes.indiatimes.com/industry/healthcare/bio...
by andrewla on 1/29/20, 4:48 PM
Unfortunately, this does not act as a price control. This just mandates that insurance companies cap the out-of-pocket expense; it does nothing to affect the retail or wholesale price of insulin except insofar as insurance companies can push back on drug manufacturers.
Net effect of this is yet to be seen, since it doesn't go into effect until 2021, but one possibility is that insurance companies will only cover variants of insulin that are cheaper than the allowed maximum, or the value that they calculate allows maximum extraction of value. Or, alternatively, the price of insurance will rise to spread the cost among all covered people.
The fundamental problem is that insulin should be a commodity, but it is not. Baseline human insulin is actually available fairly cheaply; ~$25 for a month's supply. But pharmaceutical companies have developed and sell a variety of faster-acting and longer-release insulin analogs of increasing price; and although many of them have technically fallen out of patent protection, generic makers have been slow on the uptake and manufacturers have done various tricks (relabeling, etc.) to ensure that they can maintain their effective monopoly.
There's something deeper that is wrong here that is preventing the market from working as it should be working; that is, generic makers making fast-acting insulin cheaply and driving the price down to the marginal price of production.
by andrewla on 1/29/20, 4:18 PM
I don't know why new outlets make the actual factual information for these things so difficult to find. Can't they include the bill number or link to the bill itself? The actual bill text is here [1] and the record leading up to its passage is here [2].
[1] http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name...
[2] http://www.ilga.gov/legislation/BillStatus.asp?DocNum=667&GA...
by outlace on 1/29/20, 4:07 PM
Has there ever been a price control experiment that hasn't resulted in even worse problems?
by nybble41 on 1/29/20, 4:53 PM
The media doesn't seem to be reporting the actual name or number of the bill, so I thought I'd save someone else the trouble of hunting down the full text:
SB0667 - Illinois 101st General Assembly
PRICING-PRESCRIPTION INSULIN
http://www.ilga.gov/legislation/billstatus.asp?DocNum=0667&G...
by dopylitty on 1/29/20, 4:12 PM
Ultimately non profits or the government should produce insulin and other medicines to sell at cost. This sort of law will hopefully be a step in that direction.
by vasilipupkin on 1/29/20, 6:09 PM
everyone tearing their hair out over this: the effect of the law is just that insurance overall will be somewhat more expensive in Illinois. There won't be any effect on research or innovation or anything else. Everyone will have to chip in a bit to make sure people with diabetes don't go without insulin. I don't see this is as a big disaster. Illinois has much bigger problems than this.
If people foregoing insulin because of out of pocket cost is a problem in Illinois, fixing it could have positive effects, including positive fiscal effects. So net cost is probably quite small.
by jessaustin on 1/29/20, 5:49 PM
Wow, Pritzker is on a roll. Legalizing pot, reviving horse racing, now defending diabetics. Why can't my state have a good governor? Do we need to send a bunch of former governors to prison first? I'm willing to do that! Heck, I think most people would be fine with Greitens in prison...
by Zenst on 1/29/20, 7:59 PM
Even at that level, it's a markup that even Apple has never come close too. Yes, this is a start, but it is the back of the field and has a long way to go. Sadly it won't be until 2030 when that happens, which AFAIK is when patents expire.
https://www.businessinsider.com/insulin-prices-could-be-much...
by pjc50 on 1/29/20, 4:10 PM
How likely is this to survive legal challenge?
by sorrymate on 1/29/20, 4:03 PM
Best line in the very short article “Health care is a right for all, not a privilege and that is why I am so proud that we created an insulin price cap that successfully puts patients above profit,” according to Gov. JB Pritzker.
by csense on 1/29/20, 10:16 PM
Is it possible that drug companies will all decide to stop selling insulin in Illinois as a result of this, forcing every diabetic to travel to another state every time they need an insulin refill?
by justinzollars on 1/29/20, 6:30 PM
I think this is a naive approach. We could price cap anything. Homes in San Francisco for example. The result will be rationing and shortages. It won't solve the fundamental problem. They key to bringing prices down is to remove barriers of entry. We need to flood the market with more insulin, or with my SF housing example flood the market with many more houses.
by defertoreptar on 1/29/20, 5:19 PM
Shouldn't this figure be tied to the CPI?
by egdod on 1/29/20, 7:53 PM
> “Health care is a right for all, not a privilege“
In that case, charging people even $100 a month is unconscionable. It needs to be free, just like food, housing, entertainment, and all the other inalienable rights.
by williamDafoe on 1/29/20, 5:12 PM
Just like the neighborhood drug pusher, big pharma companies give away free samples. Turns out that in the case of opiates, your neighborhood drug dealer and big pharma coincide.
by sammycdubs on 1/29/20, 4:16 PM
Ok, now do all other generics that are cheap to manufacture.
by alexmingoia on 1/29/20, 5:02 PM
Patents are the problem, not the market. Patents are government protectionism. They are a government imposed monopoly — a government imposed cap on supply.
In a free society and a free market, anyone with the knowledge and means to produce insulins would be free to do that.
The high prices are a direct result of the government preventing competition through patent law. Without patents, the price would tend to fall as companies compete on price, more efficient manufacturing, distribution, etc.
by honksillet on 1/29/20, 7:00 PM
Coming soon to Illinois, insulin shortages.
by aaomidi on 1/29/20, 4:55 PM
This sounds great but I would've liked to see them:
- Protect people without insurance. Usually they're the most vulnerable.
- Don't just force someone to pay for the Insulin. These companies making them don't need to become richer. Take it from them forcefully.
by pcvarmint on 1/29/20, 9:34 PM
Expect shortages to occur during periods of high demand.
by jobseeker990 on 1/29/20, 7:32 PM
why isn't there a generic for insulin?
by cartercole on 1/29/20, 5:37 PM
screams in libertarian
by cjfd on 1/29/20, 4:20 PM
It may very well be quite true that the price of insulin is too high but price controls really are not that great. If the price now is to high, $100 probably still is too high. Also, in the more general case (not for insulin, obviously) pharma does need to recover its research costs and who is going to say what is a good price and what not. You know, capitalism actually kind of works and price controls just don't.
There actually is a capitalist solution to the problem of high medicine prices. That is for pharma companies to have to post a price of their patents. And when somebody is willing to pay that price they do get the patent for exactly that price. After that you tax the value of the patents at a somewhat high percentage. This way, if the price of the medicine is to high relative to the posted value the state or perhaps the insurance companies could just buy the patent. On the other hand if the price of the patent is too high relative to the price of the medicine there is no real problem. In the case where both are too high but it is not the case that one is higher than the other the state should just funnel the money that comes in through the tax back to whoever needs to buy the medicine at a the high price.