‘Paying Till It Hurts’: Why American Health Care Is So Pricey

A new series on NPR focuses on the high cost of healthcare in the US. As always with this topic, there are things I agree with, and things I don’t.  Particularly when the cost of a drug therapy or device is brought into question and the ethics of the industry come under scrutiny.

On joint-makers keeping prices high

“You would think that if five different companies were making candy bars, that would drive the price of candy bars lower. But if five different companies are making joints and trying to sell them at $10,000 a piece, it’s really in no one’s interest to say, ‘Hey, guess what guys? I’m going to sell mine for $1,000 because that’s what it really costs me to make it.’ Because then everyone loses money; the whole industry kind of implodes.”

You can’t compare the cost of producing a candy bar to the cost to produce a knee/hip/shoulder replacement. 

A Stanford University report (PDF) states that the average cost to bring a low-to-moderate 510(k) product from concept to market is $31 million. More than 77 percent of that, $24 million, was spent on FDA-dependent or related activities. High-risk PMA costs averaged $94 million, with $75 million spent on FDA-linked stages, nearly 80 percent of the total cost of bringing devices to market.

The high cost of regulation in the U.S. is coupled with an unpredictable review process, according to the report. Nearly half of all respondents said they experienced some reviewer-related delays during the regulatory process, including turnover in key FDA personnel. On average, devices take two years longer to reach patients in the U.S. than in other countries, according to the report.

This doesn’t even take into consideration the Medical Device Tax and the cost to bring failed products to market. I don’t understand the fallacy that just because a company produces a product that benefits society like a medical device/diagnostic or drug therapy, that company is expected to waive profit. Especially when obesity is one of the main reasons for joint replacement.  Keeping in mind that I am on the huskier side of the scale, I would be interested in reading a study comparing the lifetime cost an individual spends to put themselves in poor health (diabetes, heart/circulatory disease, ect), to the cost of the device or therapy to reverse or treat the conditions. I am guessing the latter is much less.

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