Pharmaceutical profiteering

Another reason why we spend more on pharmaceuticals than the rest of the world ( " drugs " also means fentanyl and crank so I ' m trying to disambiguate here) is the profit motive. There are perverse incentives built into the system that encourage use of higher priced chemicals when cheaper ones would be as good or better for patients.There are some medications that people can ' t take at home. You have to go to a physician ' s office and have them infused. Medicare pays the physician a percentage of the cost of the drug, which means, obviously, that doctors make more money infusing a $10,000 drug than they would infusing a $100 drug. So guess what happens?Pharmacy benefit managers - companies like Optum and Expresscripts, that act as intermediaries between insurance companies and pharmaceutical manufacturers. In other words your insurance company doesn ' t buy drugs directly, they hire a PBM to do it for them. Well, like the infusing doctors, PBMs get a cut of the price, so they also have an incentive to get people to buy more expensive products. You ' d think the insurance companies would get wise to this and put a stop to it, but they don ' t seem to be that smart.The bottom line in all this is that the profit motive is not aligned with getting a good deal for consumer -- once again because the purported magical functioning of the fictitious Free Market ™ is a fantasy. The governments of other wealthy countries are smart enough to figure that out.
Source: Stayin' Alive - Category: American Health Source Type: blogs