this post was submitted on 21 Oct 2023
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Isn't it just this expensive because the government can't negotiate prices? So the insurances will pay a normal price but when the government is paying it'll cost more
No, it’s expensive because the value it provides.
They’re positioning it based on the length of hospital stay it prevents. In that perspective, this is an absolute bargain. For the most part, they’re selling insurance that $1.4k is far cheaper than even one additional night in the hospital. Insurance is willing to pay because it saves them loads of money. For uninsured and underinsured, it sounds like they’re basically not charging.
Only point I'd add is drugs cost more than they are to produce because of R&D costs, which must be recuperated. If costs are high, and volume is low, it means larger markup over the cost to manufacture.
It’s generally a myth that cost to produce has anything to do with market prices.