>

Classic "I got mine" perspective. Good for you, glad you got what you need. That's no reason to defend the exploitation of millions who aren't so fortunate.
The U.S. Department of Health and Human Services' Office of Inspector General in 2020 concluded that the proposal could violate the kickback law by inducing patients to buy Pfizer's drug while leaving taxpayers to bear the costs.
Pfizer sued the department to challenge its determination. The Manhattan-based 2nd U.S. Court of Appeals last July ruled in favor of the government, rejecting Pfizer's argument that a subsidy program would violate the anti-kickback law only if it were administered with corrupt intent.

An interesting case for sure. Basically Pfizer offering to pay for the copay component of the treatment will saddle Medicare with the rest of the costs. Since more patients will presumably be then induced to take the drug, Pfizer is effectively increasing its addressable market into low income families but shifting the cost of the drug into the government. >

The whole 'charge what the market will bear' idea, central to Capitalism, can work - but, this is a case of the market not being able to bear the asking price, and Pfizer basically saying: 
'Nah... this is how much money we WILL get, and it's up to you poor fools to figure out how you're going to give it to us!' >

That concept only works as well when you’re dealing with something where consumer and seller have approximately equal power in the system. Medication frequently does not fit that situation. Cancer drug X which is your best chance for survival, just for example, is a situation where the seller inherently has you over a barrel. >

There's multiple levels of hidden power - Cancer drug X might work best for you in your situation, but your doctor (or their practice) may be incentivized to prescribe drug Y. Or, your insurance may not cover drug X, or it might be part of the formulary where you have to pay a much higher copay. Maybe the manufacturer of drug X has a consumer rebate program, maybe not - almost certainly the doctor doesn't know, and the insurance company surely doesn't. (I've been told that insurance companies do factor in consumer rebate programs in creating their formularies; I don't know if that's true, but at that point it becomes your responsibility to research medication rebates, as well as dealing with your cancer diagnosis.)
But if you're American, your insurance is probably through your work, which means your insurance coverage was selected by your employer's HR department, and you got little if any say in what plan you got.
A few years ago, the company I worked for changed their insurance provider to Kaiser Permanente. Kaiser is an HMO, which means you only get to go to their doctors. So, people who've been seeing the same family doctor, OB/GYN, pediatrician, etc, for years, suddenly had to drop everything and find a new set of doctors. And, they sprung it on us so late in the year that people's spouses' open enrollments had already ended, so married employees didn't have the option of switching to their spouses' coverage, and keeping their same doctors. They did this because Kaiser needed them to hit certain threshold of enrollment, and if people left, it would be less profitable for them. >

Sounds like an interesting case of productivity dropping by 50% while people find new doctors and having to work around the new insurance. It's a lot of work to find a doctor who gets you. >

That might literally kill me.  I have several chronic illnesses and I'm on 15 prescription meds written by 4 doctors.  I would have to scramble just to keep all my meds active and not get serious complications/discontinuation syndrome from some. >

Pfizer could simply lower the cost of the drug instead of this weird rebate system. >

They make the system as labyrinthine and inconvenient as possible in hopes that poor patients will just give up and pay anyway. One of my nerve medications used to be like that, until their patent expired and a generic came onto the market. >

You couldn't design a stupider system if you wanted to. Every other major world power has figured out healthcare to a somewhat workable system and we have this outrageous system where getting sick can financially cripple you. >

Something like over half of the personal bankruptcies in the US are due to medical debt.
I remember years ago when a doctor suggested I should get a blood test, I asked them how much would it cost.
They said they had no idea, but that "it shouldn't be much".
3 weeks after the blood test, I get a +$500 bill in the mail. Oh, and insurance refused to cover it.
Imagine if buying a car or a house meant that you couldn't see the pricing until after you agreed to pay for it... >

And then you get a second bill for what the insurance didn't agree to pay, do you get a forced surprise second mortgage. >

No, you get forced arbitration. I have to go often enough that I know the first names of most of the firms arbiters. >

I'd argue thats just an extra step, that takes more of your time and resources, and still often leaves you with some amount of extra bill left. >

I was ready to crap on the Supreme Court for this, but... this is crazy, and it's definitely valid that they shot it down.
So this drug costs $225,000 a year.
On medicare, the copay cost to the patient in the end would be $13,000.
Pfizer subsidizes poor people for it, and wants to broaden that to middle class, as they claim some people are choosing not to take this medication due to the cost.  At a glance that sounds nice, helping people get medicine.
But when you think about the money, Pfizer would spend in theory up to a max of 13k, to then get the government to pay them 225k.  That seems very suspicious, and seems why the "anti-kickback" statute would come in to play.  Easy enough for Pfizer to run around handing out $13,000 checks when they know every one will results in a $225,000 check to them in return.
On a side note, this explains some of those medication commercials where they say "might have trouble affording this medicine?  call us, you can get a discount or even get it for free!"
I always assumed that was a lie or exaggeration, but now I think maybe they are happy to give it to YOU for "free", since they are helping you pay a small amount so the government can give them a large one.
Without the anti-kickback statute, companies could just continually jack up the prices over and over (even more than they already do) and "kindly" offer to pay the patients costs.  "Our medications are ALL free! Just send us an invoice, we'll cover your costs!" >

Medicare can reject covering a drug under its program, it's not forced. That's part of this, they theoretically can't continuously jack up prices.
Playing devil's advocate, the other side of this is that if Medicare has an issue with the $200k+ sticker price, they shouldn't have accepted this drug or should negotiate lower.
The issue for Pfizer is that whether they charge $100k or $200k, the copay for the patient remains the same because they are going to hit the cap. In other words, cutting the price in half doesn't spur any more patients that need the drug to take it.
We can argue all day what profits the company "deserves" on drug development, but this is a niche disease with a limited customer base. It needs to charge high levels to fund development. If a disease impacts 10,000 people, you can't charge $5/month for meds under capitalism. You'd lose money.
There are very few other industries where cutting the current price by significant amounts doesn't spur more people into consuming it. >


The issue for Pfizer is that whether they charge $100k or $200k, the copay for the patient remains the same because they are going to hit the cap. In other words, cutting the price in half doesn't spur any more patients that need the drug to take it.

What cap? There is no cap. If they cut the price in half, the Medicare patient's price is cut in half. >

No, they have a copay maximum. Under Medicare Part D, they pay the first tier  fully out of pocket ($4,660, basically a deductible) and then 25% of the cost until the out of pocket maximum ($13,000 according the person I responded to, I see $7,440 as the 2023 out of pocket maximum doing research under standard drug plans but doesn't matter in this case).  After that is reached, the government picks up the tab 100%.
Whether the drug costs $100,000 or $200,000, the individual on this drug would end up paying the same: the out of pocket maximum. To the consumer, the price cut doesn't matter because they are still getting reamed for the same amount out of pocket. >

The person you responded to claimed there is a max out-of-pocket of $13k. That person was wrong. 
Apparently there’s a MOOP coming to medicare part D in 2024/2025, but currently there is none. >

Yes I was wrong, the patient cost is not linear >

Our medical system is so incredibly broken. I don't understand how we, as a country or just as human beings, can be okay with people not being able to afford or access care.
Our technological capabilities are advancing incredibly rapidly, but our empathy continues to decline. >

Sorry according to my spreadsheet calculations your concerns do not equate to maximum profits so we'll just kindly ignore that. >

The argument I hear most against universal healthcare is that it’s too expensive… even though it’s cheaper… and covers everyone
People in the US are so checked out, their entire argument against universal healthcare is wrong, and they don’t care. >

People think universal healthcare in the US will cost too much because Medicare is banned from negotiating drug prices since 2003. Our government insurance literally is banned from using it's massive bargaining power. They passed a law to change this last year, but it doesn't take effect until 2026 for some reason. >

And this is why :     

Office of Inspector General in 2020 concluded that the proposal could violate the kickback law by inducing patients to buy Pfizer's drug while leaving taxpayers to bear the costs.       

F-ing Pfizer...  How about you develop treatment and not charge $250,000/year?     
They make $2.02 billion/year profit off this drug. >

Katie Porter already proved pharma costs are outrageous and very little of the revenue goes into R&D compared to stock buybacks and marketing. Pharma greed is killing people and destroying lives for every penny of profit they can get >

It's saving a lot of people too. In 2022 I was diagnosed with a similar condition that has a similar new and expensive drug, and I'm grateful for it. I'm also grateful to have private insurance that covers everything and has an out-of-pocket max.
E: apparently the world is black and white, everyone is either a hero or a villain, and I’m not allowed to be grateful to be alive