Medicare should spend 1% of its budget each year to buy pharma stocks. Slowly it will become neutral to drug prices since what it pays for expensive drugs will be returned in the stock value.
This is actively improving health outcomes for millions of people so of course insurance won't cover it and it is being taken away from consumers. If the shortage is over, why does it cost $1k or even $500? Sounds like there is still a shortage to me. I guess vaccines are out but price gouging is still in in the US healthcare system.
Pharmacies have to have crazy high prices though because PBMs reimburse at such shit rates, based on some percentage of the price given to them. Because if they buy the bottle at $30 and list the price at $60, the PBM contract will only reimburse at the adjusted wholesale price (another made up number), eg: 17% plus a $1.99 dispensing fee. This disgusting math results in getting a loss on the drug.
Even all this leaves out some of the most absurd abuses of PBMs. They set minimum drug copays, have the pharmacy collect a $15 copay for a $5 drug, and have the pharmacy pay the PMB the $10 difference. They make it a breach of contract for the pharmacy to inform the patient this is happening or to charge the $5 and bypass the insurance. The total lack of anything even approaching ethnics is absurd...
This is an extremely politicized question in the US, where a public health insurance option (a solution that's popular in much of the rest of the OECD) is fiercely opposed by a large swath of the population.
At the very least though, in an ideal world, payers, providers, pharmacies, and PBMs should not be allowed to be part of the same company.
Can someone please explain the economics of GLP-1s? How can people pay $1000/month for the rest of their life, just to keep weight off? Rent and mortgages are already insane as is, and then there’s insurance, kids, etc.
> How can people pay $1000/month for the rest of their life
No one actually pays that price. The $1000 misrepresented in the article as the "usual insurance price" is actually the list price, from which insurers negotiate discounts (that is, the full price -- not just the out of pocket price charged to the insured -- for insured patients is significantly less than that $1000 price), while most people who get the drug outside of insurance get it through some program (if it is the actual, brand-name drug, run by the manufacturer) that also charges much less than the list price.
> No one actually pays that price. The $1000 misrepresented in the article…
With respect, that is absolutely incorrect. People absolutely pay over $1000 and do so monthly. For example, Kaiser of Northern California makes it very difficult for their doctors to prescribe these, and nearly impossible to get a prescription for Monjaro (which is particularly effective). Therefore, Kaiser patients/insured for whom these drugs are of immense benefit but who must have their prescriptions from out of network physicians receive ZERO insurance coverage. This means they get neither the negotiated insurance price discount nor any co-pay on the full cost. I am directly aware of this. And it is a travesty. Yet the benefits of these drugs is so significant and uniquely available through these drugs that in a sense, if it is possible to pay, then pay one must. Because in effect they are invaluable.
The US government requires that they receive the lowest public price for any medical care they pay for. Unfortunately, the US government is a very expensive customer to work with for many reasons. By sandbagging costs with very high public prices, it gives healthcare providers the latitude to, after various hidden discounts, charge the government more than private sector customers that actually cost them less to serve.
It is a perverse incentive created by the government insisting on the lowest price but having a very high overhead cost to deal with relative to everyone else that has to be paid for. Far from ideal but that is where we are. Quite a few fake prices in regulated markets can be explained by the government requiring that they receive the lowest price while incurring an unusually high cost overhead to the vendor.
It's confusing, but each payer (insurance companies) negotiates a series of prices for things. Each one is a unique, bespoke, business deal -- and this is why prices are never clear: the cost of something is unique to the deal hammered out by an individual insurance company and individual health care provider networks.
Different payers will come up with their own unique take on health care coverage prices, favoring some things (lower costs) over others. Some may favor prenatal care and maternity, some may favor meat-and-potatoes basic health needs over specific categories of care. Larger payers may get a percentage point or two average-over-everything lower, smaller ones may favor a particular subcategory to create what they feel is a "good enough but still competitive in some key marketable categories" package. Each one is bespoke and quite varied.
From the outside, it can look insane: you walk into a hospital and ask how much a procedure costs, and the person at the desk is honestly confused and honestly has no answer. The reason? The cost is entirely relative to the cost structure package hammered out by a specific insurance company - there isn't really a fixed "cost" per se.
The US healthcare system is a patchwork of policy, local incentives, and unchecked capitalism that barely works, some of the time. You can read intent into it, but it's really just a big mass of inscrutable complexity.
That said, a lot of the time, inentionally or not, the answer is "it facilitates the transfer of money to the shareholders of the big private health insurance companies"
What does this mean? You don't get to write off the difference between your "target price" and actual sale price.
And a reminder that companies always do better if they make more money, not point in purposeful losses (unless you are getting a side benefit like goodwill from charity).
I think, but am not sure, the point they're trying to make is that hospitals and insurance companies can "charge" really high prices and then they can forgve those high prices in exchange for a tax break?
That's not at all how it works so they don't have any idea what they're talking about. This is like when people say businesses can "write it off on their taxes". Only people who don't know what that really means say it.
Few people actually pay 1000/month. Most get it through insurance (I pay 25/month), and most of the remaining get it through compounding pharmacies like HenryMeds which comes out to 300-400 per month.
In fact, I know a few people who get brand pills (Rybelsus) mailed from India, where it's much cheaper. This insane pricing is a US only thing.
Further, as noted in TFA, it’s possible to get higher doses at the same or almost the same price, though a compounding pharmacy, because pricing is basically the same no matter the dose (the materials are dirt cheap, the drug is very cheap to make, so they sell “the drug’s effect at however much you need” not “this amount of the drug”, basically) and then stretch it by taking smaller amounts than prescribed, or split a prescription with someone else.
1) Any number of ways, they don’t pay that much. Or,
2) They’re rich. Not even that rich. I mean hell we paid $1,500/month for two kids to go to preschool, for years, and that sucked but we could still save. And we had a household income of like $130k or so at the time. Doing fine, not saying we didn’t have alright income, but not that uncommon. Now imagine a two-FAANG income like many folks on here. $1,000/month, even times two, is entirely within reach for them. Also,
3) You can go off it for periods and just go back on if the weight starts to creep up. Anyone who’s successfully maintained weight for periods in the past may be able to manage long stretches without it and not gain much. And further,
4) It’s not going to cost that much for long, in the scheme of things. The price will likely settle in the tens of dollars per month when the patents expire.
Americans are wealthy and don’t even realize it. The median household has >$1000 left over each month after all ordinary expenses against income, per the US government’s own data and statistics. Not everyone can afford it but a large percentage can. They may value this more than many other things they can waste that excess income on.
The drugs are only going to get cheaper with time.
It's easy for Americans to think they're poor when half the country buys into a false version of reality where crime is rampant, the economy is constantly failing and welfare queens are eating your dogs.
Most people I know using it were using insurance, so paying much less than that, however for many of them the insurance companies are dropping coverage for it. That had pushed some to the compounding, and thus ozempocalypse as that avenue is removed as well.
They don’t. If you live outside of the USA it is cheaper (e.g. 400 cad a month in Canada)
The article also mentions the grey market, where you can buy a year’s worth of power from China for a couple hundred bucks. You do need to be able mix it up properly though.
Knowing a couple people who've done it, they do it for a few months to lose weight, then stop taking it and try not to gain the weight back. I don't know anyone who's chosen to go on it permanently.
Well, it’s a medication designed for diabetes (the weight loss variant has a higher dosage and different brand name, Wegowy or so), and for diabetes the usage is, by default, permanent. Unless it is replaced by other medication or if the lifestyle changes make the insulin resistance not be an issue any more.
The drugs have been cheaply and widely available for a little over 17 months, and by some measures, about 1/3rd of patients prescribed semaglutide or tirzepatide are forecasted to be using either permanently.
I can afford 1k/month and will if that's what's required. My life is well over 1k/month better with a healthier weight. I preform better at work, I'm happier, and I should live longer. That's worth the money.
Theoretically, a lot (most?) of healthcare costs are downstream of being overweight. Going to the doctor for diabetes, hypertension, knee problems, and the long term effects of those might be less costly than a constant subscription to purchase GLP-1s.
Bonus is you no longer crave expensive sugary or alcoholic drinks and food.
The status quo was pretty good for the FDA. Lily and Novo Nordisk still saw major stock price rises. Patients had super cheap drug options for something that would free up lots of money for non-medical spending in the economy. Why does an administration ruling via EO not keep the compounding loophole? It aligns with their goals. IMO, the compounders need to turn this into a media sound bite sized win for politicians. Because it certainly doesn’t make any scientific or objective medical sense to cease the compounding.
Compounding pharmacies existed before Ozempic and their entire business model is producing custom drugs at reasonable prices. For Ozempic, they order the GLP-1 peptides from a large Pharma company and then mix it to order with bacteriostatic water and any other additives. Mine includes a B-12 compound that is attempting to help with the weight loss. They are highly regulated and require trained and licensed employees. The compounding pharmacies I don't trust are the ones that only started to do Ozempic and nothing else. But I do trust my local one. They've made me medication for my animals for decades now.
> They are highly regulated and require trained and licensed employees. The compounding pharmacies I don't trust are the ones that only started to do Ozempic and nothing else.
We already know that the compounding pharmacies violate patent law. Why should I believe they follow any other regulation?
And this type of drug lends itself to some of the least expensive trials you can hope for. The dosage level, expected dosing period, and measurement of outcomes are all uniquely well suited to inexpensive study. The trials were also exceedingly fast and quickly broke off into testing for all kinds of conditions such as Parkinsons but for the core case of weight loss it was as easy as it gets.
Medicare should spend 1% of its budget each year to buy pharma stocks. Slowly it will become neutral to drug prices since what it pays for expensive drugs will be returned in the stock value.
No, slowly it will pay out on one side and get back a bit on the other until it becomes a major stock holder and the whole house of cards collapses.
This is actively improving health outcomes for millions of people so of course insurance won't cover it and it is being taken away from consumers. If the shortage is over, why does it cost $1k or even $500? Sounds like there is still a shortage to me. I guess vaccines are out but price gouging is still in in the US healthcare system.
Profits over patients.
Pharmacies have to have crazy high prices though because PBMs reimburse at such shit rates, based on some percentage of the price given to them. Because if they buy the bottle at $30 and list the price at $60, the PBM contract will only reimburse at the adjusted wholesale price (another made up number), eg: 17% plus a $1.99 dispensing fee. This disgusting math results in getting a loss on the drug.
Even all this leaves out some of the most absurd abuses of PBMs. They set minimum drug copays, have the pharmacy collect a $15 copay for a $5 drug, and have the pharmacy pay the PMB the $10 difference. They make it a breach of contract for the pharmacy to inform the patient this is happening or to charge the $5 and bypass the insurance. The total lack of anything even approaching ethnics is absurd...
How should this system work, in an ideal world?
Short answer: Systems 1, 3, 12, or 23 in Figure 3 in this paper are pretty good options: https://eclass.ekdd.gr/esdda/modules/document/file.php/KST_B...
This is an extremely politicized question in the US, where a public health insurance option (a solution that's popular in much of the rest of the OECD) is fiercely opposed by a large swath of the population.
At the very least though, in an ideal world, payers, providers, pharmacies, and PBMs should not be allowed to be part of the same company.
Can someone please explain the economics of GLP-1s? How can people pay $1000/month for the rest of their life, just to keep weight off? Rent and mortgages are already insane as is, and then there’s insurance, kids, etc.
> How can people pay $1000/month for the rest of their life
No one actually pays that price. The $1000 misrepresented in the article as the "usual insurance price" is actually the list price, from which insurers negotiate discounts (that is, the full price -- not just the out of pocket price charged to the insured -- for insured patients is significantly less than that $1000 price), while most people who get the drug outside of insurance get it through some program (if it is the actual, brand-name drug, run by the manufacturer) that also charges much less than the list price.
> No one actually pays that price. The $1000 misrepresented in the article…
With respect, that is absolutely incorrect. People absolutely pay over $1000 and do so monthly. For example, Kaiser of Northern California makes it very difficult for their doctors to prescribe these, and nearly impossible to get a prescription for Monjaro (which is particularly effective). Therefore, Kaiser patients/insured for whom these drugs are of immense benefit but who must have their prescriptions from out of network physicians receive ZERO insurance coverage. This means they get neither the negotiated insurance price discount nor any co-pay on the full cost. I am directly aware of this. And it is a travesty. Yet the benefits of these drugs is so significant and uniquely available through these drugs that in a sense, if it is possible to pay, then pay one must. Because in effect they are invaluable.
It seems like the entire US medical system runs on prices that no one actually pays.
I don't really understand what all that extra complexity achieves?
It hinders individuals from making purchasing decisions that affect price. Less clarity on the actual price means that it's harder to shop around.
The US government requires that they receive the lowest public price for any medical care they pay for. Unfortunately, the US government is a very expensive customer to work with for many reasons. By sandbagging costs with very high public prices, it gives healthcare providers the latitude to, after various hidden discounts, charge the government more than private sector customers that actually cost them less to serve.
It is a perverse incentive created by the government insisting on the lowest price but having a very high overhead cost to deal with relative to everyone else that has to be paid for. Far from ideal but that is where we are. Quite a few fake prices in regulated markets can be explained by the government requiring that they receive the lowest price while incurring an unusually high cost overhead to the vendor.
It's confusing, but each payer (insurance companies) negotiates a series of prices for things. Each one is a unique, bespoke, business deal -- and this is why prices are never clear: the cost of something is unique to the deal hammered out by an individual insurance company and individual health care provider networks.
Different payers will come up with their own unique take on health care coverage prices, favoring some things (lower costs) over others. Some may favor prenatal care and maternity, some may favor meat-and-potatoes basic health needs over specific categories of care. Larger payers may get a percentage point or two average-over-everything lower, smaller ones may favor a particular subcategory to create what they feel is a "good enough but still competitive in some key marketable categories" package. Each one is bespoke and quite varied.
From the outside, it can look insane: you walk into a hospital and ask how much a procedure costs, and the person at the desk is honestly confused and honestly has no answer. The reason? The cost is entirely relative to the cost structure package hammered out by a specific insurance company - there isn't really a fixed "cost" per se.
PBRs have contracts with medical insurance. They get paid based on how much money they "save" the insurance company.
"Save" is defined as list price minus contracted price that the insurance pays for the drug.
PBRs manipulate the list price to be higher so that they "save" the insurance company more money.
They also manipulate the co-pays so that patients will choose drugs that "save" the most, as opposed to the lowest price drug.
If you use an abbreviation like PBR, it helps to either explain what it means or use the correct one. Do you mean PBM = pharmacy benefit manager?
The US healthcare system is a patchwork of policy, local incentives, and unchecked capitalism that barely works, some of the time. You can read intent into it, but it's really just a big mass of inscrutable complexity.
That said, a lot of the time, inentionally or not, the answer is "it facilitates the transfer of money to the shareholders of the big private health insurance companies"
The sellers can write it off as a loss. It’s a way to avoid paying taxes
What does this mean? You don't get to write off the difference between your "target price" and actual sale price.
And a reminder that companies always do better if they make more money, not point in purposeful losses (unless you are getting a side benefit like goodwill from charity).
I think, but am not sure, the point they're trying to make is that hospitals and insurance companies can "charge" really high prices and then they can forgve those high prices in exchange for a tax break?
That's not at all how it works so they don't have any idea what they're talking about. This is like when people say businesses can "write it off on their taxes". Only people who don't know what that really means say it.
This is you: https://www.youtube.com/watch?v=XEL65gywwHQ
Few people actually pay 1000/month. Most get it through insurance (I pay 25/month), and most of the remaining get it through compounding pharmacies like HenryMeds which comes out to 300-400 per month.
In fact, I know a few people who get brand pills (Rybelsus) mailed from India, where it's much cheaper. This insane pricing is a US only thing.
Further, as noted in TFA, it’s possible to get higher doses at the same or almost the same price, though a compounding pharmacy, because pricing is basically the same no matter the dose (the materials are dirt cheap, the drug is very cheap to make, so they sell “the drug’s effect at however much you need” not “this amount of the drug”, basically) and then stretch it by taking smaller amounts than prescribed, or split a prescription with someone else.
Rybelsus doesn’t work.
Of course it does, it is just much less effective than the injectable versions.
1) Any number of ways, they don’t pay that much. Or,
2) They’re rich. Not even that rich. I mean hell we paid $1,500/month for two kids to go to preschool, for years, and that sucked but we could still save. And we had a household income of like $130k or so at the time. Doing fine, not saying we didn’t have alright income, but not that uncommon. Now imagine a two-FAANG income like many folks on here. $1,000/month, even times two, is entirely within reach for them. Also,
3) You can go off it for periods and just go back on if the weight starts to creep up. Anyone who’s successfully maintained weight for periods in the past may be able to manage long stretches without it and not gain much. And further,
4) It’s not going to cost that much for long, in the scheme of things. The price will likely settle in the tens of dollars per month when the patents expire.
> And we had a household income of like $130k or so at the time. Doing fine, not saying we didn’t have alright income, but not that uncommon.
Americans with six-figure incomes seriously don't understand the rest of the country lives.
> but not that uncommon
Taking in nearly double over the average household income is, by definition, uncommon.
I think that’s a pretty average income for a couple with two children
Median household income is like $80k
In San Francisco, maybe.
Americans are wealthy and don’t even realize it. The median household has >$1000 left over each month after all ordinary expenses against income, per the US government’s own data and statistics. Not everyone can afford it but a large percentage can. They may value this more than many other things they can waste that excess income on.
The drugs are only going to get cheaper with time.
It's easy for Americans to think they're poor when half the country buys into a false version of reality where crime is rampant, the economy is constantly failing and welfare queens are eating your dogs.
Most people I know using it were using insurance, so paying much less than that, however for many of them the insurance companies are dropping coverage for it. That had pushed some to the compounding, and thus ozempocalypse as that avenue is removed as well.
They don’t. If you live outside of the USA it is cheaper (e.g. 400 cad a month in Canada)
The article also mentions the grey market, where you can buy a year’s worth of power from China for a couple hundred bucks. You do need to be able mix it up properly though.
[dead]
Knowing a couple people who've done it, they do it for a few months to lose weight, then stop taking it and try not to gain the weight back. I don't know anyone who's chosen to go on it permanently.
I'm doing essentially right now. Not big by any means, but loosing 20 to 30 pounds would be amazing for my joints.
For me, I've been at a stable weight for over a decade. I figure if I can drop down over a few months, I can stay at my target weight.
Well, it’s a medication designed for diabetes (the weight loss variant has a higher dosage and different brand name, Wegowy or so), and for diabetes the usage is, by default, permanent. Unless it is replaced by other medication or if the lifestyle changes make the insulin resistance not be an issue any more.
The drugs have been cheaply and widely available for a little over 17 months, and by some measures, about 1/3rd of patients prescribed semaglutide or tirzepatide are forecasted to be using either permanently.
I can afford 1k/month and will if that's what's required. My life is well over 1k/month better with a healthier weight. I preform better at work, I'm happier, and I should live longer. That's worth the money.
People who need statins are on them for the rest of their life. People who need blood pressure regulators are on them for the rest of their life.
Why should GLP-1s be any different?
There are a lot of very inexpensive statins and blood pressure drugs (not all of them, of course).
$1000/month seems like a lot. Although if you end up eating significantly less, there's some savings there.
Theoretically, a lot (most?) of healthcare costs are downstream of being overweight. Going to the doctor for diabetes, hypertension, knee problems, and the long term effects of those might be less costly than a constant subscription to purchase GLP-1s.
Bonus is you no longer crave expensive sugary or alcoholic drinks and food.
The status quo was pretty good for the FDA. Lily and Novo Nordisk still saw major stock price rises. Patients had super cheap drug options for something that would free up lots of money for non-medical spending in the economy. Why does an administration ruling via EO not keep the compounding loophole? It aligns with their goals. IMO, the compounders need to turn this into a media sound bite sized win for politicians. Because it certainly doesn’t make any scientific or objective medical sense to cease the compounding.
I'm far from convinced that some random "compounding pharmacy" produces effectively the same thing as Ozempic.
Compounding pharmacies existed before Ozempic and their entire business model is producing custom drugs at reasonable prices. For Ozempic, they order the GLP-1 peptides from a large Pharma company and then mix it to order with bacteriostatic water and any other additives. Mine includes a B-12 compound that is attempting to help with the weight loss. They are highly regulated and require trained and licensed employees. The compounding pharmacies I don't trust are the ones that only started to do Ozempic and nothing else. But I do trust my local one. They've made me medication for my animals for decades now.
Is there a compounding pharmacy aggregator online youve found trustworthy?
https://www.glpwinner.com/ is a good resource for comparing compound glp-1 providers
> They are highly regulated and require trained and licensed employees. The compounding pharmacies I don't trust are the ones that only started to do Ozempic and nothing else.
We already know that the compounding pharmacies violate patent law. Why should I believe they follow any other regulation?
The thing is, GLP-1 isn't that hard to make, and these compounding pharmacies make effectively the real thing.
Even further, most drugs aren't _that hard_ to manufacturer.
The hard part is discovering them and proving they're safe and effective.
What would convince you?
What do you believe is different between their process and the patent holders?
They don't need to recoup their investments in discovery and regulatory approval.
What do we believe the discovery pathway was? Billions of dollars spent by heady businessmen with a keen eye for the molecules of interest? Hardly:
https://www.pnas.org/doi/10.1073/pnas.2415550121
And this type of drug lends itself to some of the least expensive trials you can hope for. The dosage level, expected dosing period, and measurement of outcomes are all uniquely well suited to inexpensive study. The trials were also exceedingly fast and quickly broke off into testing for all kinds of conditions such as Parkinsons but for the core case of weight loss it was as easy as it gets.