Tuesday, August 23, 2016

A Nation of Rackets

Oh look -- in "water is wet" news, costs for simple (yet life-saving) medical devices are usuriously high. SOMEONE SHOULD DO SOMETHING!

EpiPen maker Mylan has become the new boogeyman of the pharmaceutical industry.

Following complaints from consumers that the company had hiked the price of the emergency auto-injector by $100 in recent months for no obvious reason, members of Congress are calling for an investigation. The price has increased 450 percent since 2004, when a dose cost $100 in today's dollars, to its current price of more than $600. Many consumers hadn't noticed the gradual rise in price, however, because the company often only added in 9 to 15 percent each time and insurance companies had made up the difference. But with recent changes in the deductible structure and co-pays for some health plans that have put more of the cost for drugs on consumers, many families have been hit with sticker shock.

So let's see if we have this straight -- a long-standing collusion of profiteering among a triangle of associated industries (pharma, insurance, HMOs) which has any number of congress-critters in their back pockets suddenly has said critters' antennae tingling, even though prices for the Epi-Pen (and any number of devices and medications) have been steadily rising for years.

But now Obamacare -- the same mangled, flawed, industry-written doorstop the congress-weasels already chewed up and spit out years ago -- is starting to cut into all the phat exec bonuses built into the old risk-pooling. This was entirely foreseeable, by the insurance companies as well as the legislators. Part of it is the risk-pool adjustments necessary to cover the formerly uninsurable, most of it is simple greed. Even then it's not enough, which is why Aetna and other big fish are swimming away.

I would love to look at their risk-pool spreadsheets, btw. The typical consumer has seen their insurance premiums, co-pays, and deductibles increase, and their coverages decrease. Meanwhile, you can bet that execs have seen their salaries, bonuses, and profit margins increase. They have been steadily jacking up prices even before Obama became president and got the ACA passed; all that law did was change the cost structure.

The idea behind the ACA was to get indigent or uninsurable people on the rolls, and get them covered in the risk pool (since by definition they cannot afford their own coverage or receive it from their employment, if they're even employable in the first place) by the mandate; in other words, by forcing healthy 25-year olds onto the rolls as well. Well, guess what? Those darned kids are not only healthy, they're flat fucking broke, because they just went through four years or so of the higher education racket, have nothing to show for it but a worthless piece of paper and an $11/hour job, they're back at home with the 'rents and trying to make student loan payments, and no, they don't have an extra couple hundred bucks a month to kick in for health insurance they don't need in the first place. Way more cost-effective to eat the 2%-or-$695/year penalty.

Maybe the state could jack that penalty up as well, give it some teeth. There is a price-point equilibrium for everything and everyone, a point at which someone decides that it's just easier and less crazy-making to opt-out of the system, rather than work to pay for some faceless asshole's second house and private school for their spoiled brats. Let's find out where the middle of that bell curve is, shall we?

Just as long as the execs bonuses aren't touched, or the god-given right for a pharma company to do their R&D in a state university on the taxpayers' dime, then turn around and skull-fuck them with a $700 pen that costs maybe twenty bucks to make once you factor in intellectual property royalties and ancillary costs. I'm sure Mylan will see its problem go away if it finds a way to grease the right palms.

I'm not saying dump Obamacare, not at all, but to pretend that increasingly strapped consumers should have to cover the insane profit margins that these vultures command is simply a built-to-fail revenue model. And it is part of the revenue model; this Epi-Pen deal is no anomaly, it's the norm. It's what the model -- again, it's just an optimized spreadsheet -- is designed to do.

{Update 8/27/16 11:30 PM PDT:  Of course the Mylan story is even worse than you thought -- headed by the daughter (who made $19M last year) of a Democratic US Senator, headquartered in the Netherlands as a tax dodge, etc. Jim Wright has a reasonable devil's advocate explanation of the whole thing, but I says fuck 'em. This company did not make or develop anything -- they bought something and marketed it, and now their desire to recoup their investment, pay shareholders, and reap rewards for themselves puts human beings in danger, simply because they cannot afford the usurious prices being charged.

It's definitely a tough one -- no one wants to trample the capitalist spirit and the innovative lodestone of Profitable Incentive, but Jebus H. Christ on a cracker. There's a difference between pricing something at "what the market will bear" and gaming the system to skull-fuck people who cannot afford it, either financially or in the sense that they might literally watch their child choke to death from a constricted throat due to a bee sting, because they couldn't afford the fucking thing.

I get that the company has a legal obligation to do the best they can for the shareholders. Find a balance, for fuck's sake. Or don't; cash the fat fucking checks and eat what's left of your shriveled soul. I don't believe in god, but I would think that people who profess to would comport themselves at least a little bit better.]

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