>One group that would benefit from cheap patent-free drugs is health insurers.
Um...exactly the opposite. Under the ACA "the minimum percentage of premium health plans must spend on health care is 85 percent for large groups and 80 percent for small groups and individual policyholders."
So, if an insurance company spends $65,000 on a drug, they get 65k/.85 or $76,470 in premiums, earning $11,470 in profit.
If the drug only cost $10,000 the profit would just be $1,764.
The more expensive drugs are, the more money health insurers make. Health insurers are harmed by cheap patent-free drugs.
You're completely ignoring the other half of the insurance business which is selling plans to employers and individuals. Insurance companies can't just raise premiums willy-nilly without incurring the wrath of the big employers.
Every single insurance company director I've ever talked to HATES the current pricing of drugs.
Hmm. Hadn't updated my view to account for the ACA.
That could be a problem for healthcare costs in general, in markets where competition among insurance companies is limited. I bet we end up changing that provision sooner or later.
Um...exactly the opposite. Under the ACA "the minimum percentage of premium health plans must spend on health care is 85 percent for large groups and 80 percent for small groups and individual policyholders."
So, if an insurance company spends $65,000 on a drug, they get 65k/.85 or $76,470 in premiums, earning $11,470 in profit.
If the drug only cost $10,000 the profit would just be $1,764.
The more expensive drugs are, the more money health insurers make. Health insurers are harmed by cheap patent-free drugs.