hk2001

I believe the Economist themselves label this as “Classical Liberalism”, given the modern connotations of “liberal” in the US.

Perhaps, but I think it’s often less a matter of being afraid of calling extremists out, and more of what I heard someone once refer to as “sane-washing”. Progressives hear extremist views and say “when they say X, what they really are saying is Y. No one actually wants X”, when in reality that’s exactly what extremists want and it gives them cover to continue to push the Overton window until it’s no longer an extremist view. The above exchange is a perfect example.

Might have something to do with the fact that newborns barely move. Lots of kids will get increasingly chunky right up until the moment they start crawling/walking, when they start slimming down. I can’t imagine there’d be increased energy expenditure when you literally can’t roll yourself over, let alone move across a room.

What actually often happens is that drugs priced at $90 get marked up to $200 with the knowledge that insurers will get a $90 price. The rebate system paradoxically creates an incentive system where it is insurers best interests for list prices to increase dramatically and then receive a discount than for the products to be sold at the discounted price in the first place. It’s a broken system and replacing it should help medicines be priced closer to what real people can pay for.

I’ve posted this in another thread before, on the high costs of insulin, but if you replace ”pharma company” with healthcare provider and “medication” healthcare services, the same will largely hold true:

Insurance companies in the US have enormous leverage over just about every other party involved in healthcare: the patients, the providers, and the pharmaceutical manufacturers. This is even more true for medications like insulin, where there isn’t much difference in efficacy between brands. In a normal market, these companies would try to compete on price. But for insulin, price continues to rise. This is because insurance companies, and their negotiators, Pharmacy Benefit Managers (aka PBMs) have a vested interest in prices rising. PBMs make their money by negotiating prices with pharma companies to secure discounted prices for insurers, and in doing so, create the insurers’ “formularies”, which are basically the list of all the medications an insurer will cover, the prices they will pay, and the conditions that must be met. PBMs get a cut of the discount they negotiate with the pharma company. If drug A has a list price of $200, and they negotiate it down to $150 for their insurance clients, they take home x% of all the savings that are made at $50 a pop.

This creates a perverse incentive however: a PBM stands to make more from a drug that costs $300 and is negotiated down to $150 than a drug that is $200 that is negotiated down to $150, even if everything else is the same. That means you are more likely to get better insurance coverage for your drug by starting high and giving deep discounts. And for drugs like insulin, where similarities between products are so small that the only place you can compete is price, how well you are covered by insurers compared to your competitors will make or break your business.

Insurance companies themselves also love drugs with high costs that are then discounted deeply, because when they charge a patient coinsurance, it’s based on the list price, and not the price the insurer is paying. So even though they’ve negotiated the price of insulin down by over 50% with the pharma company, they are still going to charge you y% based on the full price. So if they continue to get insulin from manufacturers for $Y per unit every year, they continue to charge you 20% of a cost that continues to rise further and further away from $Y, meaning they are actually paying less and less as prices rise. They will claim to be using the reduced costs to lower premiums, but if reduced costs are only the result of increased costs for the sick, then all we’ve done is create an insurance system where the sick are subsidizing the healthy, which is entirely backwards. So now we have a system where manufacturers raise prices year after year, only to also give ever increasing discounts to insurance companies and PBMs, in hopes that it actually increases the number of patients who can afford their products (i.e. those with decent insurance). But those left holding the bag are the individuals without insurance or those with high deductible plans (which are becoming increasingly common).

It’s also important to note exactly how much power these middlemen have. It’s a common narrative that Big Pharma is able to get away with bad practices because of their power. But in reality, only a single pharmaceutical company is in the Fortune 50, and none of the insulin makers are. In contrast, 80% of the PBM market is controlled by 3 companies, 2 of which are Fortune 50, and the third is a subsidiary of United Health, which is an insurer and is also Fortune 50. In fact, 10 of the Fortune 50 companies are middlemen (insurers, PBMs, or drug distributors) in the healthcare industry.

Basically, discounting and rebates have ironically been a big driver behind increasing healthcare costs. They serve primarily to reduce insurers costs but they don’t pass those benefits to consumers, and have actually created a system that rewards high-cost healthcare.

People also tend to greatly underestimate the risk of negative outcomes.

It is something you can sell, and is currently in development by major pharmaceutical companies.

> Because all cultures have sex discrepancies and a tolerance to infanticide so that would be the outcome everywhere on earth ?

Most do. And is abortion infanticide? Because abortion is widely accepted across the first world, and can result in the same thing.

> And how can it be a problem only in poverty ? Doesnt the average American consume like ten fold what the average Indian does ?

Yes, which is the point. Those who say "population control" is the answer are essentially saying "make third world countries with less consumption but higher birthrates change, not first world countries with low birthrates and high consumption". The US actually have stable, ideal birth rate currently. And I doubt even the most delusional population control advocate thinks reducing the US birth rate by 10 fold (from somewhere a little above 2 to .2) is a good idea (though I could be wrong). And many first world countries are even lower to the US, to the point its actually creating major societal problems (like Japan and Sweden). What the above commenter is trying to say is that as poverty levels go down, birth rates drop to replacement level or below.

So essentially to say "population control" is the ideal solution is to say make the areas of the world with high birth rates (largely developing nations, mostly in Africa) stop having children, rather than improving the consumption patterns and efficiency of those of us living in the first world.

Seems problematic to say the least.

Most first world countries don't need nor even want to encourage people to not have kids. In fact, most want the opposite. Countries like Japan and Sweden are actively pursuing measures to encourage people to have more children, because their countries are looking at existential crises as the result of having too few young people, and a population that isn't replenishing itself.

In fact, the US, which offers tax breaks for families with more children, is right around what is considered the ideal birth rate as it currently stands. Projections for increased global population are being driven almost entirely by developing nations, most of which are in Africa. And most of the reasons for the high birth rates are entwined in a very complex web of factors, including poverty, education, and general health outcomes, none of which can be solved by waving a magic wand. The good news is that these countries are projected to level out their population growth as they do develop. The reality is that it will take time.

But this means that anyone who seriously considers "population control" as the means to dealing with climate change, world hunger, etc. completely misunderstand the realities surrounding both the growth of the global population and our ability to influence it. And that is without even considering the history of what "population control" has often meant, and the fact that it is a slippery slope that has been used to justify war, eugenics (if not in name then in function), and genocide, to say nothing of a whole host of societal issues like sexism.

Population control is not "the solution". "The solution" will require finding ways to make our societies sustainable at the increased population levels.

You were accusing them of being both. Now who is being insincere?

> their need to signal the world how special they are and how important their interests are

Honestly, the compulsion to accuse others of narcissism for something as harmless as putting stickers on their personal property screams "LOOK AT ME, I'M SPECIAL" much more.

They are disease ridden and a health hazard.

Tokyo is hyperdense despite its massive size. I think the point is less "what percentage of the city can I reach easily on a bike" and more "how many places of interest can I reach easily on a bike". In metropolises in Europe or Japan, 5km contains a lot. In the lower density, sprawling cities of North America, there isn't nearly as much utility to the places you can travel to within 5km.

I work for one of the companies mentioned in the article.

I too am troubled by the increasing burden on those unable to pay for their insurance, and feel that something must change, and quickly.

However, I’m shocked when I read articles like this one that manage to miss the crux of the issue so badly (though, to be fair to the author, most articles on the subject make the same mistakes). Perhaps it’s because I work in the industry and have more insight that I take for granted, or perhaps I’m simply blinded by personal biases and I’m the one off base, but the issue driving insulin price increases seems to be obvious: to he insurance system in the US is irredeemably broken. A few facts, considered together, support this:

1. The number of diabetics in the US has skyrocketed in the preceding decades.

2. The list price for insulin has also skyrocketed in the last 20 years

3. The amount of money the main insulin makers are paid per insulin fill is actually down during this time

So you have an increasing demand for a product, combined with an increased price, but less money per unit being made by the parties allegedly jacking up the price for profit. So where is the excess money going? Middlemen.

Insurance companies in the US have enormous leverage over just about every other party involved in healthcare: the patients, the providers, and the pharmaceutical manufacturers. This is even more true for medications like insulin, where there isn’t much difference in efficacy between brands. In a normal market, these companies would try to compete on price. But for insulin, price continues to rise. This is because insurance companies, and their negotiators, Pharmacy Benefit Managers (aka PBMs) have a vested interest in prices rising.

PBMs make their money by negotiating prices with pharma companies to secure discounted prices for insurers, and in doing so, create the insurers’ “formularies”, which are basically the list of all the medications an insurer will cover, the prices they will pay, and the conditions that must be met. PBMs get a cut of the discount they negotiate with the pharma company. If drug A has a list price of $200, and they negotiate it down to $150 for their insurance clients, they take home x% of all the savings that are made at $50 a pop.

This creates a perverse incentive however: a PBM stands to make more from a drug that costs $300 and is negotiated down to $150 than a drug that is $200 that is negotiated down to $150, even if everything else is the same. That means you are more likely to get better insurance coverage for your drug by starting high and giving deep discounts. And for drugs like insulin, where similarities between products are so small that the only place you can compete is price, how well you are covered by insurers compared to your competitors will make or break your business.

Insurance companies themselves also love drugs with high costs that are then discounted deeply, because when they charge a patient coinsurance, it’s based on the list price, and not the price the insurer is paying. So even though they’ve negotiated the price of insulin down by over 50% with the pharma company, they are still going to charge you y% based on the full price. So if they continue to get insulin from manufacturers for $Y per unit every year, they continue to charge you 20% of a cost that continues to rise further and further away from $Y, meaning they are actually paying less and less as prices rise. They will claim to be using the reduced costs to lower premiums, but if reduced costs are only the result of increased costs for the sick, then all we’ve done is create an insurance system where the sick are subsidizing the healthy, which is entirely backwards.

So now we have a system where manufacturers raise prices year after year, only to also give ever increasing discounts to insurance companies and PBMs, in hopes that it actually increases the number of patients who can afford their products (i.e. those with decent insurance). But those left holding the bag are the individuals without insurance or those with high deductible plans (which are becoming increasingly common).

It’s also important to note exactly how much power these middlemen have. It’s a common narrative that Big Pharma is able to get away with bad practices because of their power. But in reality, only a single pharmaceutical company is in the Fortune 50, and none of the insulin makers are. In contrast, 80% of the PBM market is controlled by 3 companies, 2 of which are Fortune 50, and the third is a subsidiary of United Health, which is an insurer and is also Fortune 50. In fact, 10 of the Fortune 50 companies are middlemen (insurers, PBMs, or drug distributors) in the healthcare industry.

Again, maybe my view of the issue has been entirely skewed by my personal biases. Also note that this isn’t necessarily the cause of all price gouging in the pharma industry. There are certainly bad actors that are jacking up prices simply because they can. But it seems to me like the true issue at the heart of the insulin pricing problem (the insurance system in the US) is being skipped over to focus on the symptom because the idea of rich pharma companies reaping in profits from price gouging because it is a simpler narrative.