Medicine and profits

[MightyGiants]

I was listening to one of my investing podcasts, and they had on a rep from a drug company that developed, not a treatment, but a cure for a disorder.  The issue was inflammatory disease, and it was with children with cancer who receive bone marrow transplants, which triggers an inflammatory response that damages organs and eventually kills the patient.  They have a treatment that, after three doses, cures the disease in 70% of the patients.

Now the drug rep was asked about the pricing, which is like $1.5 million for the treatment.  He justified that cost, not with how much it cost to research and produce the drug, but rather he argued that the drug is cheaper than the cost of the patient being in the ICU for a few weeks before they die.  He argued the cost was justified because the drug saves the patient's life.

Now, thanks to the current people in power in Washington, my job is in jeopardy.  My biggest issue is my health insurance.  It's going to cost me between $15,000 and $20,000 a year because I am old enough to push up the cost of my insurance but not old enough for Medicare.

Those high prices are the result of the drug companies making a fortune, and people not understanding that just because the individual patients do see the cost (another argument put forth by the drug company rep), we as a society see those costs.  He was asked about the lower costs of treatments in other nations, and he argued that we in America have a different cost structure.

Since I was listening to an investing podcast, I get drug companies exist to make a profit and that treatments are infinitely more profitable than a cure.  So if you don't allow the drug company to price gouge when they do develop cures, no cures will be forth coming.

I have to think there is a better way of doing things, but I just don't have an easy answer or alternative.

[Ed Vette]

Your insurance cost is also affected by the Affordable Care Act. My Insurance before the ACA was $550 a month. It's now $1400 a month with a comparable policy, single coverage.

In this case, the cost of developing a drug through Clinical Trials is over a Billion Dollars. Pricing is determined in part by the number of patients who are likely to purchase it, and adjusted from there. In this example, the number of patients is very low. To lower the cost, PCs would have to raise the price of other drugs or be subsidized by the Government. 

I'm not disagreeing with your premise of the high cost of drugs in this country. One of the major issues is how the process of FDA Approval contributes to this cost. Most drugs developed by small Bio-Tech companies never make it, and those companies go bankrupt, banking on stock dilution. Or, if Big Pharma sees potential, they get a buyout.

In the case of the cost of this drug of 1.5 million, what family can afford this? Is this company attempting to get Insurance companies to cover the cost? If that's the case, that subsidy raises your insurance cost.

The good news is that Quantum Computing will be the answer to not only reducing costs in the process but also developing cures to many diseases. I recommend a good book; Quantum Supremacy by Michio Kaku.

[Bill Brown]

A couple of months ago my pulmonary doctor sent in prescription for a drug named OFEV. It's a capsule you take twice a day. When the pharmacy called to arrange shipping for the one month supply they said my copay was 2000.00. The cost of this drug was 13000.00 a month and my insurance would cover 11000. I had to refuse this because there is no way I can afford anywhere near 2000 a month. The thing that is infuriating is that the lowest price for an ofev capsule in the United States is 215.00 a capsule while the price per capsule from various international pharmacies range from 26.00 to 14.00 a capsule.

[LennG]

A couple of months ago my pulmonary doctor sent in prescription for a drug named OFEV. It's a capsule you take twice a day. When the pharmacy called to arrange shipping for the one month supply they said my copay was 2000.00. The cost of this drug was 13000.00 a month and my insurance would cover 11000. I had to refuse this because there is no way I can afford anywhere near 2000 a month. The thing that is infuriating is that the lowest price for an ofev capsule in the United States is 215.00 a capsule while the price per capsule from various international pharmacies range from 26.00 to 14.00 a capsule.

Bill

 We have good friends who live in upstate NY who also use a very expensive drug, at least expensive here in the USA. They regularly make a trek to Canada about every 3 months for a fresh supply, saving countless thousands every time.
This is not an uncommon practice. You are not that far from the border, anything worth considering?

[Sem]

Is anyone here familiar with billionaire Mark Cuban's initiative, Cost Plus? Costplusdrugs.com
Supposedly they offer prescription medication at a fraction of the price the drug companies are charging. I saw an interview with him recently about this but I really don't know much about it. In my case it wouldn't make sense because the three prescriptions I take are all covered by Medicare at no cost for two of them, and less than $10 for the third one.

[MightyGiants]

Your insurance cost is also affected by the Affordable Care Act. My Insurance before the ACA was $550 a month. It's now $1400 a month with a comparable policy, single coverage.

In this case, the cost of developing a drug through Clinical Trials is over a Billion Dollars. Pricing is determined in part by the number of patients who are likely to purchase it, and adjusted from there. In this example, the number of patients is very low. To lower the cost, PCs would have to raise the price of other drugs or be subsidized by the Government. 

I'm not disagreeing with your premise of the high cost of drugs in this country. One of the major issues is how the process of FDA Approval contributes to this cost. Most drugs developed by small Bio-Tech companies never make it, and those companies go bankrupt, banking on stock dilution. Or, if Big Pharma sees potential, they get a buyout.

In the case of the cost of this drug of 1.5 million, what family can afford this? Is this company attempting to get Insurance companies to cover the cost? If that's the case, that subsidy raises your insurance cost.

The good news is that Quantum Computing will be the answer to not only reducing costs in the process but also developing cures to many diseases. I recommend a good book; Quantum Supremacy by Michio Kaku.

The drug company is getting the government to force coverage for insurance and Medicaid.  They claim if a family can't get the drug due to funding, they would provide the service for free (I have my doubts how "free" the treatment is).

Also, are you not on Medicare at this point, rather than ACA insurance?

[MightyGiants]

A couple of months ago my pulmonary doctor sent in prescription for a drug named OFEV. It's a capsule you take twice a day. When the pharmacy called to arrange shipping for the one month supply they said my copay was 2000.00. The cost of this drug was 13000.00 a month and my insurance would cover 11000. I had to refuse this because there is no way I can afford anywhere near 2000 a month. The thing that is infuriating is that the lowest price for an ofev capsule in the United States is 215.00 a capsule while the price per capsule from various international pharmacies range from 26.00 to 14.00 a capsule.

Sorry to hear this, Bill.  This is the sort of thing I am talking about.  How do we fix this issue?

[Ed Vette]

The drug company is getting the government to force coverage for insurance and Medicaid.  They claim if a family can't get the drug due to funding, they would provide the service for free (I have my doubts how "free" the treatment is).

Also, are you not on Medicare at this point, rather than ACA insurance?

At this point I am on Medicare Insurance, but Linda's work coverage looked like it was going to end and I called the Broker who got me the original policy after my COBRA ended. The same policy was about $900+ more a month. He said it went up as a result of the ACA. Apparently someone has to pay for the subsidy. Thankfully I was able to bridge the coverage under Linda's employees plan. I wish I discovered that sooner.

Medicare isn't free. There is a monthly charge and deductable, and they only cover 80%, so it's necessary to have a supplement policy that goes up in price every year.

[Kugs53]

I am a retired insurance agent.
It is adviseable to have a supplement for your medicare part B.
You should make sure that supplement covers RX.
Another alternative is a medicare advantage plan.
There are limitations on this.
A good agent can outline the pro's and cons.
I moved to Portugal 2 years ago.
I take Jardiance which was costing me about $150 a month in the states.
I pay $10 a month now.
The rx prices in the states are so inflated it is criminal.
It seems like the US is subsidizing the world.
There has to be a better way.

[MightyGiants]

I am a retired insurance agent.
It is adviseable to have a supplement for your medicare part B.
You should make sure that supplement covers RX.
Another alternative is a medicare advantage plan.
There are limitations on this.
A good agent can outline the pro's and cons.
I moved to Portugal 2 years ago.
I take Jardiance which was costing me about $150 a month in the states.
I pay $10 a month now.
The rx prices in the states are so inflated it is criminal.
It seems like the US is subsidizing the world.
There has to be a better way.

So you are one of those expats who moved to a country like Portugal for the lower cost of living (and the country offering incentives to move).  Are you happy with that decision?


I agree about the criminally high cost of drugs.  My insurance went up nearly 20% this past year, and the cost hike was blamed on the coverage for the obscenely costly obesity drugs you inject.  I am like "go on a f**ing diet, you need to do things the easy way, is killing me financially as I pay a portion of my health insurance cost even though I am working)

[Bill Brown]

So you are one of those expats who moved to a country like Portugal for the lower cost of living (and the country offering incentives to move).  Are you happy with that decision?


I agree about the criminally high cost of drugs.  My insurance went up nearly 20% this past year, and the cost hike was blamed on the coverage for the obscenely costly obesity drugs you inject.  I am like "go on a f**ing diet, you need to do things the easy way, is killing me financially as I pay a portion of my health insurance cost even though I am working)

I saw an interview with the head guy at the company that makes ozempic. When he was asked about why the shot in the US was 1300.00 while in Europe it was about 100.00 his answer was that the consumer in the US really didn't pay 1300.00 because the insurance company would pay the majority of the cost. So that may be why your insurance cost you so much.

I have been very fortunate with health insurance for most of my adult life. My wife had an outstanding insurance plan when she was employed. It cost us about 300.00 a month but everything was covered. It cost us very little out of pocket. As a retired couple we both have an advantage plan that costs us nothing and has been quite good at covering things that have required medical issues. It has cost me a few hundred dollars out of pocket when I have had a couple of ultrasounds that cost almost 2000 a procedure. My prescriptions are quite inexpensive and are not that hard to cover.

[MightyGiants]

in the US really didn't pay 1300.00 because the insurance company would pay the majority of the cost. So that may be why your insurance cost you so much.

These sort of statements by the drug companies really piss me off.  Medical insurance in the US isn't private, and it's for profit.  When drug makers overcharge for drugs, we ALL pay for it (as you pointed out), and quite a lot of money.  Yet, so many people just believe the "well, it's not coming out of my pocket directly, so why should I care," and don't have the ability to extend their reasoning to realize those same obscenely high drug prices are a major driver of health insurance costs.

[Kugs53]

We had bought a place in Portugal in 2018.
It was really meant as a springboard to explore Europe.
We would be here about 6 weeks a year, travel within the country or to other countries.
When we were not here it was rented out, so my costs were very little.
Unfortunately covid hit and we had a 2 year hiatus.
We started staying for longer periods of time and really enjoyed it.
My wife suggested moving here at first I was a hard no.
We lived in North Miami in a townhouse condo and prices were getting out of control.
Condo fees up, assessments needed to have a legal reserve and insurance rates rising with little coverage.
I told my wife we can explore it.
Our condo sold in three days.
Our boat sold in a week and my neighbor across the street was the CEO of the RangeRover dealership and he bought my car.
In the span of ten days my life did a 180.
It has been great and we love it here.
Learning the language has been difficult.
The lifestyle is great, I am a 5 minute walk from from the beach.
From my balcony to the left is a view of the ocean to the right is an 11th centurty castle.
It is a beautiful country.
We don't regret it at all.
Plus with DAZN I get the Giant games.
Websites like this help me stay connected

[LennG]

We had bought a place in Portugal in 2018.
It was really meant as a springboard to explore Europe.
We would be here about 6 weeks a year, travel within the country or to other countries.
When we were not here it was rented out, so my costs were very little.
Unfortunately covid hit and we had a 2 year hiatus.
We started staying for longer periods of time and really enjoyed it.
My wife suggested moving here at first I was a hard no.
We lived in North Miami in a townhouse condo and prices were getting out of control.
Condo fees up, assessments needed to have a legal reserve and insurance rates rising with little coverage.
I told my wife we can explore it.
Our condo sold in three days.
Our boat sold in a week and my neighbor across the street was the CEO of the RangeRover dealership and he bought my car.
In the span of ten days my life did a 180.
It has been great and we love it here.
Learning the language has been difficult.
The lifestyle is great, I am a 5 minute walk from from the beach.
From my balcony to the left is a view of the ocean to the right is an 11th centurty castle.
It is a beautiful country.
We don't regret it at all.
Plus with DAZN I get the Giant games.
Websites like this help me stay connected

No explanations are necessary. We live in the world for so long, and we need to do what makes us happy. If this was your retirement from all those years of working, then enjoy every minute of it, and no apologies needed to anyone.
 From the few times we have visited Portugal, we also found it beautiful and the people so friendly, not like other European countries that start with FRAN...

[Kugs53]

No apologies, he asked a very legitimate question.