Drug companies are using price discrimination to maximize their profits. Charge a lot to the insurance companies but less to others with no or poor insurance. If a drug only costs $10 to make, they can mark it up to $100 for the insured people. Then insurance charges a $20 copay. The drug company now gives a $20 copay assistance card to make it "free". The net profit is $100-20-10=$70.

This is why California recently made is illegal to provide copay assistance to drugs where generics are available. I have a drug which cost $800/month to the insurance. My copay was $80/month. The manufacturer was so helpful to give me a $75/month copay card to cover this. Around some point the patent expired but the manufacturer continued to give that card out. Eventually the drug became generic and my pharmacy offered the generic version at $10/month. So my copay is higher but insurance cost is much lower. In fact the original manufacturer bugged me to petition the state legislature to change back that law.

It also can go the other way. I was once quoted two prices for a CT scan because they weren't sure if my insurance would cover it. If it did, they'd bill one amount to the insurance company. If they didn't cover it, I would be billed directly for an amount that was somewhere around double what the insurance would have been billed.

I got the CT scan somewhere else.

Insurance companies negotiate down prices so the hospitals jack up the sticker prices to give room for negotiation. I've read that hospitals typically get 20-30% of what they bill.

I'm sure I'm not 100% accurate on the numbers here because I don't feel like finding the receipts, but close enough. Here's another anecdote from the US.

My dog has a pulmonary condition that requires him to take Sildenafil daily (yes, generic Viagra). We got the prescription filled at a local pharmacy for a 90 count, they charged us something around $280 for. We were not expecting that high of a prescription, for a dog, for a generic medicine. Of course, since this is for a dog, we can't get our human health insurance rate for it, but the pharmacy is operating primarily for humans rather than animals. The person at the counter said that if we look at coupon sites like GoodRx, we might be able to save some money.

A coupon we pulled up on our phone while standing there brought the price down to something below $30 for the same 90 day supply. Roughly 1/10 of the price.

Clearly, the pharmacy must still be making some money even at $30. In what universe is it acceptable to charge a 900% markup above profitability on medicine? Yes, some people use this drug "recreationally", but it's also a lifesaving medicine for other humans and animals. I can't imagine what people must go through that need more expensive medicines for themselves or their families without insurance. And even with insurance, it's not much better.

And that's just one of many anecdotes. I have others, like a relative being charged hundreds of dollars per Tylenol they received while in the hospital, only for insurance to "adjust" that down to something more "reasonable" like a couple of dollars per pill.

This system is broken and needs monumental, uncomfortable, complete and total rebuilding, not repair.

Yes, IIRC there was a thread talking about this GoodRX thing. When I was uninsured, it brought the price for a month's supply of generic Singulair from ~$60 to ~$9. Very convenient for me, but where does that money come from? Does GoodRX get paid for that data, that I'm a 30-yo man in x-state who needs x-medicine? Very sketchy.

The money comes from the money that would normally be kicked back to the pharmacy benefit manager[0] as a “rebate” from the pharmaceutical company. The retail prices are jacked up—at least in part—for the benefit of PBMs to extract money from the system[1]. My understanding is that GoodRX gets the negotiated “discount” price from a PBM like every other insurer and then makes a profit from the kickback.

[0] https://en.wikipedia.org/wiki/Pharmacy_benefit_management

[1] https://armandalegshow.com/episode/why-are-drug-prices-so-ra...

The price, at least in the US is as much as they could ask for. If they could get from you $1,000,000 on aspirin they would, trust me. It's called free market. They say that the market will fix any problem. But in reality it's not really free market.

The manufacture price is insignificant but the bulk of the price is pinned on other things like R&D and other costs the pharmaceuticals claim. There are costs but there's also a huuuuuuuge profit to be made.