"There are some bad actors, absolutely true. However 'Hanlons Razor' -- never attribute to malice that which is adequately explained by stupidity -- definitely applies."
In healthcare especially incompetence opens the door for bad actors to exploit weaknesses in the system which amount to huge amounts of money being wasted. Medical fraud, for example, is one of the most sophisticated organized criminal activities in the United States. Mafias setup hijack doctors offices and pharmacies (or setup fake ones) and they know exactly how long it will take until they get caught. In the meantime they can extract tens of millions of dollars from insurance companies in fake claims.
And the fraud pales in comparison to the blatant waste. Doctors office's who order unnecessary CT scans when they or their affiliates happen to own a CT scanner. Pharmaceutical companies who market brand name pills that are no more effective than generics. Insulin manufacturers who manage to charge $1,000 a month for a product that's over a hundred years old.
In the case of pharma specifically, there are a lot of pricing inefficiencies that are deliberately not corrected due to political corruption so that they can be exploited.
$1000/month insulin is not 100 years old. Your comment is like complaining that because penicillin was isolated in 1928, nobody should have a patent on any antibiotic.
Humalog insulin was patented in the 90s, and IIRC, is what Walmart sells for $25/vial. Novo Nordisk (among others) continually improves the product. Those improved products are where you see the $1k/month prices.
The 3 main reasons cited by pharmaceutical companies for the high cost of new prescription drugs do not apply to insulin. First, the “high cost of development” is not relevant for a drug that is more than 100 years old; even the latest and most commonly used analog insulin products are all over 20 years old.8 Second, the pricing is not the product of a free market economy. Free market forces are clearly not operational; there is limited competition on price, the person who needs the product is not in a position to negotiate the price, and there is no relationship of price increases over time compared with overall market inflation. The price of insulin has risen inexplicably over the past 20 years at a rate far higher than the rate of inflation.9 One vial of Humalog (insulin lispro), which used to cost $21 in 1999, costs $332 in 2019, reflecting a price increase of more than 1000%.10, 11, 12 In contrast, insulin prices in other developed countries, including neighboring Canada, have stayed the same. Insulin pricing in the United States is the consequence of the exact opposite of a free market: extended monopoly on a lifesaving product in which prices can be increased at will, taking advantage of regulatory and legal restrictions on market entry and importation. Third, the arguments that high costs are needed for continued innovation and that attempts to lower or regulate the prices will hamper innovation are not a valid excuse.13 There is limited innovation when it comes to insulin; the more pressing need is affordability.
In healthcare especially incompetence opens the door for bad actors to exploit weaknesses in the system which amount to huge amounts of money being wasted. Medical fraud, for example, is one of the most sophisticated organized criminal activities in the United States. Mafias setup hijack doctors offices and pharmacies (or setup fake ones) and they know exactly how long it will take until they get caught. In the meantime they can extract tens of millions of dollars from insurance companies in fake claims.
And the fraud pales in comparison to the blatant waste. Doctors office's who order unnecessary CT scans when they or their affiliates happen to own a CT scanner. Pharmaceutical companies who market brand name pills that are no more effective than generics. Insulin manufacturers who manage to charge $1,000 a month for a product that's over a hundred years old.
In the case of pharma specifically, there are a lot of pricing inefficiencies that are deliberately not corrected due to political corruption so that they can be exploited.