Okay, so the insurance company would pay $10 Trillion for one person to receive the cure for that cancer then? Obviously there is a limit.
The fact is that $1000 is not the cost of producing the pill, that is the amount they can charge for the pill while still getting people to pay for it. When there is no competition, and people would die without it, prices get very high very quickly. There is an extremely large barrier to entry for new medicines, and pharmaceutical companies are structured to recoup the massive development costs by charging large sums for inexpensive to produce goods that they have essentially a monopoly over. If it costs billions of dollars to develop a cure, that cure is going to have to be expensive, but a cure administered repeatedly can amortize those costs over many low-cost doses, while a one-time cure can't. Insurance companies are all about spreading costs over time - paying out large sums to large numbers of people all at once is a lot more problematic than smaller, predictable payouts over a longer period of time. It is in their best interest as well for you to manage the disease.
The fact is that $1000 is not the cost of producing the pill, that is the amount they can charge for the pill while still getting people to pay for it. When there is no competition, and people would die without it, prices get very high very quickly. There is an extremely large barrier to entry for new medicines, and pharmaceutical companies are structured to recoup the massive development costs by charging large sums for inexpensive to produce goods that they have essentially a monopoly over. If it costs billions of dollars to develop a cure, that cure is going to have to be expensive, but a cure administered repeatedly can amortize those costs over many low-cost doses, while a one-time cure can't. Insurance companies are all about spreading costs over time - paying out large sums to large numbers of people all at once is a lot more problematic than smaller, predictable payouts over a longer period of time. It is in their best interest as well for you to manage the disease.