Adventures in the U.S. health care system

In case of crazy weather on our Greenland-to-Alaska cruise (through what used to be called the “Northwest Passage” and is now the “Trump Global Warming (TM) Passage”), I decided to fortify myself with some scopolamine patches. A physician friend wrote me a prescription for 8 patches, each of which can last for three days, but sometimes they come off in the shower, etc.

Wikipedia dates the medication to 1881. The brand name patches were about $340. Thanks to the patent (presumably on the delivery mechanism) having expired, the generics are available for only… $275.

We pay the big $$ for Blue Cross/Blue Shield coverage, so I had the pharmacy run my card. Coverage was denied due to a mismatch in name/gender/relationship that could not be further explained. It was a Saturday, so calling Member Services was unsuccessful.

On Monday, I invested some time in calling Blue Cross, which invested some money in paying a woman to deal with me. She explained that the pharmacy had “rung me in” with two Ls in my first name and with a gender of “female” (of course I asked how many additional gender options there were and she was familiar with only “male” and “female”; where is the LGBTQIA enthusiasm?) It should be a $10 co-pay for a 30-day supply.

After visiting four different pharmacies, I found one that had two packages of the patches in stock. They said that the insurance company would pay them $154, which means that the total price would be $165 (a 40% discount off the $275 that would have been charged to the struggling uninsured person!).

To me this is a great example of how the 18 percent of GDP that is purportedly for “health care” is illusory in terms of benefits to Americans. Absent FDA regulation, the generic patches would have cost $20-40 (8 cost about $60 in the Canadian regulatory environment). It took a week and the efforts of multiple people to get this organized. As soon as the doc wrote the prescription, why didn’t the patches show up a few days later via a standard ecommerce retail process?


9 thoughts on “Adventures in the U.S. health care system

  1. If there’s only a single generic manufacturer, that’s the usual competitive equilibrium – slight brand premium, but both parties are effectively monopolies in different market segments.

    • Are you kidding? FDA acts as a cartel enforcer for pharmas by excluding lower-priced competition. Despite the common misconception, it doesn’t do much to protect the public from quack medicine and downright poisonous drugs… check the story of Vioxx which killed over 50000 people *and* was FDA-approved. Needless to say, no FDA bureaucrat suffered any consequnces.

    • Can you give a specific example of how lower priced competition is excluded, besides patents, which are not unique to the FDA or the pharmaceuticals industry?

  2. When I worked for McKesson, the price of a drug was largely determined by the cost of regulating it. The street price of opiates were largely determined by strictly the drugs were regulated legally. Schedule 1’s were most expensive (super heavy regulation, research only), Schedule 2’s were less expensive but still very expensive. Schedule 3-5 less so, but still regulated.

  3. We have enough problems with shipping drugs through the mail. To wit: the Chinese are happy to supply all the fentanyl needed to kill 14 million people by sending it through the U.S. Postal Service!

    30+ Kg of Fentanyl, 30+ Kg of Heroin, 5+ Kg of coke, $700 grand in cash, 24 guns — *Including an AK-47.”

    You can’t make stuff like this up! The video IS the Onion.

  4. However: given the problems you talk about, I wouldn’t bet against Amazon spinning off a pharmaceutical delivery business by drone. In principle it should be easier than delivering almost anything else by drone: most prescriptions don’t weigh much, they could probably fit a dozen of them into a delivery package at a time. The whole thing could be robot from one end to the other: doctor sends prescription to Amazon, their Pharma facility picks the product, the logistics are all done instantly, the drone goes out and drops the drugs where they’re supposed to be. It’s coming.

  5. > To me this is a great example of how the 18 percent of GDP that is purportedly for “health care” is illusory in terms of benefits to Americans.

    Well, the crash is coming and people are going to go back to the old-fashioned ways of treating illnesses. We’ll be back to leeches and poultice before too long – at least for most people. I mean that seriously.

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