[quote=SK in CV]
Is there some evidence that the administrative cost of providing care has gone up? Martin Shkreli’s testimony had absolutely nothing to do with the ACA.[/quote] On the first, talk to doctors who are leaving practice. There is no ‘official’ study that I have found yet, probably because that would be incredibly non-PC. On the second, yes it did.. though he did not tie it directly to the ACA. He was able to increase the price because he knew the ACA would cover it because it was deemed ‘lifesaving’ under the ACA – so insurance must pay, and distribute the cost over the rest of their client base. If insurance was not covering it, people would stop taking it because they could not afford it(morbid/heartless/but true) – so the price would be sensitive to price/demand curves ( as I mentioned, morality was not Shkreli’s strong point ).
This combined with the byzantine and lengthy process to start up production of these drugs (which were mostly off-patent) and to get approval from FDA to produce.. allowed Shkreli to charge what ever he wanted.. until someone else got through the FDA to make the drugs (at least 5 years).
When ever you introduce a unrelated payor aka insurer into a purchase arrangement – it shifts and distorts the price-demand curves. These drugs are life saving, by law must be supplied-(mandated by ACA), there was nothing in the ACA to cap the price on the drugs (charged by the manufacturer) therefore the insurers must cover the price no matter what is charged (per ACA). Shkreli did not directly state the relationship.. but he looked/smirked at the congressmen when questioned about the price increases and literally said that they created the situation. Do you think the congressmen who voted for the ACA, who said that to find out what is in it; we must pass it.. then turn around and say ‘oops’ or admit their screwup(s)?
Currently there is action to work around or try to cap the price by either direct cap action(through mod of ACA), or allow buying back drugs from other markets (ie. Canada) though the drugs are still produced in the US(ironic). I don’t expect the current congress to get anywhere on this.
