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    The Healthcare Law Is Definitely Not Working As Proposed
    By Matthew Lazenka | June 4th 2014 01:14 PM | 18 comments | Print | E-mail | Track Comments
    I am a postdoctoral fellow who is currently working on pain/drug abuse research. 

    I was once a hopeful person and enthusiastic about working on the cutting edge of medical innovation.  However, my enthusiasm has been moderated by the new health care law and its lack of honesty. It has also been moderated by the fact that I was forced to sign up for an exchange plan, and that there were several lies about what these plans were supposed to cover.  Far worse is the fact that my new insurance company, Aetna, has been given unlimited abilities to refuse to pay for any medical expenses, even though taxpayers are giving them $580 a month. 

    That’s correct; universities don’t provide postdoctoral fellows (the people who do research at the universities) with health insurance.  I knew that going into it and had no issues with getting private health insurance.  The issue here is that this new entitlement program will most certainly continue the flat funding of National Institutes of Health (NIH), indefinitely.  Not only is money needlessly being siphoned away to pay for my worthless health insurance, the failed federal/state websites for the exchanges cost around 2 billion dollars to produce. NIH, recently, was able to get an extra 1 billion dollars to fund medical research.  I wonder if 3 billion would have been better. 

    My situation also reinforces the controversy over how insurance companies would act with their new found power over the consumer; since citizens are forced to either pay a fine and go without health insurance or buy health insurance.  Insurance companies are already secretive about which drugs are covered under exchange plans, which leads me to believe that they will not cover any new medications, or fight tooth and nail to not have to cover them.  This fact alone will destroy the incentive for life saving medications.  Further, my insurance company denied paying for my daughter’s immunizations, which is only going to increase measles outbreaks.  People who are denied these “preventive services” will likely refuse to finish the immunization schedules.  I would not have imagined that with the government controlling health insurance that companies would actually use that leverage to hurt health care coverage further. The current administration said that they were eliminating these egregious practices, whereas they are only making them worse.  My insurance also does not cover dental visits for my children, even though they are supposed to cover dental insurance.  I was not allowed to get a dental rider for my children through the exchange because, again, I was told that my exchange plan was supposed to cover dental visits. 

    Getting to the thrust of my story, my 6 month daughter went to get her 6 month immunizations.  Under the healthcare law,immunizations are covered free of charge, as long as they are “in-network.”  Well, I chose our exchange plan because it included our pediatrician.  After the visit, I got a bill for $440.  My insurance company denied the claim because our pediatrician is out of network.  It turns out that they terminated my pediatrician after our visit.  To further confound things, my pediatrician is still included as a provider.  



    This is going to be the future of health care.  My biggest issue is that medical innovation is going to be influenced even more by the government as insurance companies continue to refuse payment of procedures. 

    Because the government has given unprecedented powers to health insurance companies, it will only be a matter of time before medical innovation becomes unprofitable. 

    The United States is still the greatest engine of medical innovation, which is why wealthy individuals from single payer countries come to the United States for medical procedures.  Once the new health care law ruins our advantage, where will sick people go?   <!--[if gte mso 9]> Normal 0 false false false EN-US X-NONE X-NONE <![endif]--><!--[if gte mso 9]> <![endif]--><!--[if gte mso 10]><![endif]-->

    Comments

    Hank
    When I was a young guy, I asked the difference between a Democrat and a Republican, since I couldn't see one. My dad said a Republican was a Democrat who had gotten mugged.  It seems a whole bunch of us are getting mugged by health insurance.  I go to the doctor so little he ends up throwing my records out after a few years and other than mandatory checkups my kids never go - yet my premium went up 25%. But I am covered in case I deliver a baby or need birth control pills, so I have that going for me.
    brain2bewild
    That's the rub though.  Provide drugs for diseases, like a menstrual cycle, that is actually a naturally occurring phenomenon, but give insurance companies the ability to deny coverage for immunizations by saying the provider is magically out of network.  I honestly wish my 6 month old was getting birth control and the insurance company tried this same thing.  Then the media would care. I cannot even switch insurance companies because of the open enrollment.  I used to be able to do that.  I have plans of switching to birth control research in the future.  NIH is actually going to force researchers to study female animals/cells.  You can read about it here: http://painresearchforum.org/news/41234-move-toward-sex-equality-preclinical-research

    I am actually happy about this move because there is a definite bias towards using male animals due to behavioral variability in females because of the estrus cycle. 
    Wow, you have single-handedly resolved the health care problem. Who knew that the only medical requirements people had were delivering babies and birth control?

    Apparently your willing to forgo treatment for yourself or your family if you ever get injured in a car accident, or your kid breaks an arm/leg engaged in sports or some other activity. Of course, no one ever gets sick to where they might require a doctor's care. What a marvelous world you live in.

    Now if we can apply this same logic to car insurance, then we should only have to get insurance if we can demonstrate that we will have an accident. Otherwise, those drivers with no accidents are being "mugged" by the insurance companies.

    Hank
    What are you talking about? If you are getting something for free that you could not get before thanks to me paying 25% more to get something I do not need, what goofy economic alternative universe says that is better for everyone?
    You obviously don't understand economics nor specifically how insurance functions. The whole basis of insurance is that the majority of those paying premiums will require minimal payout of claims or no payouts. Therefore, by definition, insurance leverages the premiums to pay for those that require larger claims.

    No one needs insurance until they need it. Do you believe you only pay insurance as some kind of "savings account" for when you get sick or need services? The point is because of the unpredictability and the unexpected expenses should the need arise, so to claim you don't need it is simply ridiculous. You can't possibly know.

    The other aspect of these premiums is to expand the coverage available to those that don't have it or can't afford it. You may argue that you shouldn't have to pay for what others lack, but that's a different argument. I also don't feel I should have higher premiums because of younger people that don't want to have insurance and then require medical services when they break bones or require surgeries that they are unprepared to pay for.

    Hank
    You obviously don't understand economics nor specifically how insurance functions
    You're getting emotional and this is leading you to make rookie logical mistakes, like assuming deficit thinking on the part of someone you don't know anything about. If you want to be taken seriously, act like an adult.

    The flaw in economics understanding remains yours - because yours is the big government redefinition of insurance, which says we are all forced to buy something so corporations can afford to give it to a few cheaper. That is actually not the definition of insurance, it is the definition of commerce by government fiat. 

    Insurance as know it today only came into existence in World War II - because the government imposed wage controls and "benefits" were the only way that corporations could recruit new employees. And the intent was definitely not to have everyone insured, it was to allow people to gamble against a catastrophic event.

    That is what insurance is, not forcing the public to pay for birth control or sex change operations and be told they are bad citizens if they don't.

    brain2bewild
    The ACA has to be the single dumbest way to provide health insurance.  I paid 240 dollars a month for about the same amount of coverage, minus maternity and birth control.  Now I pay 0 dolllars and taxpayers pay 580 dollars.  I chose the cheapest plan available.  If everyone else is going to have their wages reduced to give me free health insurance, it better be awesome health insurance.  However, it turns out that it is worse insurance than I had before, and Aetna is pocketing 580 dollars a month.  If I were the one paying, I'd be outraged.  My outrage is the fact that no one will admit how stupid it is.  I don't want taxpayers overpaying for insurance so that the CEO of Aetna can double his salary again.  Anyway, I gotta get back to writing about cannabinoids and doing research.  Look, at least taxpayers have the hope of my research.  The ACA provides nothing of value.
    JohnK.
    Were we not warned that the VA was the model for how Obamacare would function?  Senator Durbin (D-IL) was very clear that there were no problems with the VA.  

    I know this sucks for you, and for everyone else that has been forced onto an exchange.  Central planning always results in this type of calamity, that is the very nature of central planning.  Instead of opening the system up for innovation, they took absolute control over the system.
     
    So what are you going to do about it?
        
    Writing about it here is a nice start, but that just really tells us what we already knew, although the vaccine angle is completely insane.  You, and everyone else that is stuck in this, are going to have to do something more.  I am thinking Stamp Act, but on a larger scale.  Absolute non-compliance seems like a good starting point.     

    I am not opposed to universal health care, but I am absolutely opposed to mandatory health care, especially one that is completely regulated by the government.  I wish you luck, but really, you and everyone like you, is going to have to take real action in order to make it change.

    You might wish to edit the image of the Explanation of Benefits page to remove your insurance ID number to prevent fraud.

    brain2bewild
    Duly noted, but what are they going to do?  They sure aren't getting their medical bills covered.
    MikeCrow
    The ACA is going to quite literally be the death of most of us.
    Never is a long time.
    Dear Matthew, I am sorry to hear you were wronged by Aetna. I sympathize very much.
    Anybody who ever had to deal with his insurance company has some horror story (Pain and Abuse come to mind).
    You post mixes personal experience and some general observations, as does my comment /lengthy rant here.

    * "universities don’t provide postdoctoral fellows (the people who do research at the universities) with health insurance. "
    Well, those universities I am familiar with (still) do. Perhaps you should name this university,
    so as to shame it to provide this benefit? Certainly, beyond charging your salary directly to the grant,
    your university collect lots of overhead from grant money to pay for such things.
    Is there some way you could get employee status with (some) benefits?
    Or if you are on a grant, the agency giving the grant should lean on the university to provide (some) benefits.
    Talk to your HR department and people in your department.
    (Adding you to university health insurance pool would be a benefit to them, as postdocs are presumably
    younger and healthier than the existing older profs and employees)

    * " insurance companies continue to refuse payment of procedures."
    They have always done so. Notice that your main complaint is against Aetna, a private company,
    changing the rules after your enrollment there. That problem would not exist in a single-payer scheme like in Canada, most OECD countries, or in a tightly-regulated insurance market (as in Switzerland)
    As long as there are private insurers, these will have an economic incentive to try and bend the rules, so as to avoid paying legitimate claims to increase their profits.
    (And there are a fair number of stories about that, preceding Obamacare, e.g. at
    http://scienceblogs.com/mikethemadbiologist/2007/11/09/doing-everything-... )
    Obamacare now limits insurer's rate of profit+overhead to 15% (or 'Medical Loss Ratio' to 85%), so insurer's profits did possibly decrease. Too bad for them. Their CEOs still get rather fat bonuses (as stock options, so as to avoid paying taxes on them). These moneys certainly don't go to NIH.

    * "the failed federal/state websites for the exchanges cost around 2 billion dollars to produce. "
    see: http://mediamatters.org/blog/2013/10/24/the-myth-of-the-634-million-obam...
    (may indeed be more than said there, but there is much rhethoric, underlying problem is that
    underfunding in-house IT did not allow HHS to adequately check on contractors)
    and compare to health insurer's profits (in 2012) at
    http://archive.fortune.com/magazines/fortune/fortune500/2012/industries/...

    * "new entitlement program will most certainly continue the flat funding of National Institutes of Health (NIH),"
    That is a non-sequitur. One also could say that the Bush tax cuts, or the cost of the Iraq war, or bank bailouts etc., made for an artificial budget crisis reducing the budgets of all science agencies including NIH.)
    Perhaps if drug companies, all of whom are hugely profitable, would pay more taxes (in the US, as opposed the Bahamas), or obliged to pay more for licenses to NIH for drugs invented there, NIH would do better.
    Decreasing profit to insurance companies does not subtract or add to NIH's budget.(See above, 15% overhead limit.)
    And the subsidy to lower income people's insurance premiums makes the subsidy explicit;
    before it was borne by county hospitals, under the obligation to treat everyone,
    'charity care' by all health care providers (who realize that they cannot collect their bills from poorer patients,
    although they try, and make the lives of poorer sick people terrible;
    after all, some 60% of bankruptcies in the U.S. involve some medical bills [not so in Europe]).
    Actually, medical cost growth, nationwide, has decreased under Obamacare (same as Romneycare in MA);
    one reason providers agreed to decreases in reimbursement was that they knew that their 'charity care' /unpaid bills would decrease.
    The overall taxpayer subsidy to healthcare is now only becoming more visible (rather than being covered up).--
    Germany, with a very tightly-regulated private and semi-public insurance scheme seems to do fine in medical innovation.

    * On children's immunizations, I do remember from my children, pre-Obamacare, that the original bill was
    always terribly high, then the insurance got a big rebate, and the only real cash the medical clinic got
    was my co-pay of some $80-120 (insurance paid about nothing, even after deductible was used up.)

    * https://www.healthcare.gov/what-are-my-preventive-care-benefits/
    lists which preventive care should be covered, for free. It includes immunizations for children.
    You may have to 'remind' Aetna of it. (See about insurance commissioner in next paragraph)

    * "they terminated my pediatrician after our visit"
    So Aetna changed the rules after your enrollment there, and even after your pedriatrician's visit
    In that case, your pediatrician iss presumably still under contractual obligation to accept the insurance payment
    and give rebates as per plan... and Aetna obliged to pay accordingly. So you should appeal to both,
    with copy to your state insurance commissioner (if your state still has such evil government bureaucrats,
    may not work in Republican-run states).
    (An 'innocent' question, if he could send a copy of mail exchange and transcript/logs of phone calls
    to the insurance commissioner once got a friend an instant decision, that his diabetes meds
    and checkup were indeed covered,
    and apologies, that apparently computer made a mistake flagging it as unreimbursable/not covered.)
    But you may also be hit by heavy deductibles, depending on your plan.

    So, you have two reasons to complain:
    1. Aetna shoud cover total cost of immunizations under PPACA (Obamacare in legalese)
    2. Doctor was in network while medical services were rendered.
    DO IT! And post here what happens. Perhaps telling Aetna that your complaint gets some
    public airing will get them to approve your reimbursement fast!


    I now work for a small company, and the only coverage company/I could get was something similar to the Obamacare / Bronze plan in my state;
    it has a heavy deductible (~4k$ individual/ ~11k$ family). So if someone in my family gets sick, it is indeed very bad.
    But at least I will not lose all the equity in my house should one of us get seriously sick.
    For people on a small salary, of course, the huge deductibles are a big problem. But the premium on the better plans are
    cheaper if you are younger (which I assume you are as a postdoc). So figuring out the best plan (high premium/lower
    deductible vs lower premium/high deductible) is still a big problem; it is easier if there is a single plan,
    covering everyone and about everything, with premium based on salary, as in European countries.

    * " why wealthy individuals from single payer countries come to the United States for medical procedures."
    ...and Americans, priced out, travel to Thailand, Singapore, Japan....
    ("A McKinsey and Co. report from 2008 found that between 60,000 to 85,000 medical tourists were traveling to the
    United States for the purpose of receiving in-patient medical care. The same McKinsey study estimated that 750,000
    American medical tourists traveled from the United States to other countries in 2007 (up from 500,000 in 2006)."
    http://en.wikipedia.org/wiki/Medical_tourism). Most of those traveling to the U.S. must be very rich, as cost here
    exceeds by far the cost in any developed country.

    * "to pay for my worthless health insurance," Actually, one thing Obama/...care did was to require insurances
    to actually cover things, as before there were many people happy to pay low rates, as long as they never got sick,
    after some accident, though, they learned that there was a $100,000. deductible....
    all surveys show that the most happy insurance customers are those, who never had a claim.

    Good luck with getting your claim against Aetna adjudicated!

    -------------------
    ** To the various commenters who complain that they don't need maternity care or birth control
    or better insurance at all, because of their inherent maleness and good health:
    Insurance is to reduce the risk of life, you'll need it sooner or later.
    You can't avoid it, you never know when an uninsured drunken driver hits you...
    And you may even get married and have children.
    (Would you wan to have your wife pay a larger premium?
    Or charge a higher premium to young couples,
    to be reduced after menopause or evidence of tubal litigation?
    And, if male and in a relationship, are you now paying for your gf's birth control?)

    brain2bewild
    You have a thoughtful response, and I just want to clarify some things. First, I am paid through NIH funding. Because of this, I am only provided limited funds, provided by NIH, to cover health insurance. I was able to cover health insurance with a private exchange policy with those funds. What the ACA did was increase the cost of that coverage 200%, about $240 to $750. Now I have an exchange plan that has 1) very narrow networks and 2) costs 100% more than my old plan even though deductibles, etc, are comparable. I am not sure why health insurance was so cheap in my state, but I promise you that having had it for 5 years, I knew exactly what was covered and how much I would pay.  My Aetna coverage did include my pediatrician but, as I stated, they told me she was terminated. I have since followed up with the practice and found out that they pulled this stunt on everyone else who got this exchange plan. Now my pediatrician is trying to figure out how to rectify the situation, which is going to cost a lot of extra hours. You see, these exchange plans, like Medicaid, will cause ridiculous overhead. This will drive up costs and put more practices out of business. What this is doing is increasing hospital conglomerates, which get a monopoly on care and further drive up costs. What also drives up costs are the fact that the US subsidizes drug prices for other countries. In fact, the US subsidizes drug costs for hospitals that use this great loophole: http://www.nytimes.com/2013/02/13/business/dispute-develops-over-340b-di...
    I also think you need to check your sources since wikipedia is not a great primary source.  The McKinsey article focused on this:
    "An estimated 40% of all medical travelers are looking for the world’s most advanced technologies, worrying little about the proximity of the destination or cost, according to consulting firm McKinsey&Co. It narrowly defined medical travelers as only those whose primary and explicit purpose in traveling was to obtain in-patient medical treatment in a foreign country, putting the total number of travelers at 60,000 to 85,000 per year.  Most of those patients in search of the best care, including 38% from Latin America, 35% from the Middle East, 16% from Europe and 7% from Canada, are heading to the United States."

    The part about how many Americans go to other countries provides no context.
    You also mention the Elizabeth Warren study, which has a lot of problems on its own.  Most notably, no one has repeated the analysis nor had they expanded the number of locations, which were very narrowly chosen by those researchers.  Anyway, the take home message is that the government is actually the reason health care is so bad in the United States and it is actually going to be made worse because of further interference by the government.  Even before the ACA, the government controlled most of health care.  Now it will control all of it.  My own experience in the early stages are that it is a complete failure.  Anyway, I am not a health policy expert, I study pain/drug abuse.  What I do know is that this law has made my life very difficult for over 6 months.  I am going to just have to bite the bullet next year and go without health insurance.  Luckily, I can 0 out my taxes and not pay the fine.  They forgot to provide a mechanism for the IRS to collect that fee.
    Hi Matt,
    I agree that I don't understand the NIH payment modalities. I am still surprised that your lab or university does not consider you an employee (even with contract ending with end of grant, and limited access to, say, retirement benefits) So NIH grants limit your health insurance premiums? So should we complain. loudly "NIH grants force researchers to go without health insurance?" Indeed I am surprised that you are not in your employer's insurance pool, and could not get (better) group insurance through them. Who signs your pay check? (Well, in the end its NIH, but most likely it is some other entity, though which your grant money flows, like your university, Medical School, HHMI....) What does your university/institute do with the overhead money they certainly extract from NIH? Should one tell your contract manager?--
    It is indeed sad that your premium went up by so much, but I assume the $240 you paid before, if for family coverage, also was subsidized by your then employer, and now you see the total cost (+ subsidy by Obamacare due to limited income, instead of employer subsidy). (Monthly premium for by now teenaged children was also last year, on group plan ~190/month -each-[low deductible with large employer, a very high one now, with small employer - free market at work], so 240 for family is cheap). Anyway best advice is to get on your employer's plan.
    When working for a large university, we also had every other year changes in plans, networks etc. That was before Obamacare. Of course, insurance companies use Obamacare as pretext to impose changes (to the worse).
    It is good that your pediatrician is on the case for reimbursement, and he might not like lower reimbursement offered by Aetna, and therefore quit their network (though it seems they dropped him for doing too many expensive procedures ... the free market at work).
    Anyway, if you can show you were insured, and pediatrician in network on day of delivery of medical service, Aetna must pay for it under PPACA, and you should insist they do. (After all their justification for premium increase was that now they have to pay 100% for immunizations etc under PPACA) Get the number of insurance commissioner, and tell Aetna about your blogging about your adventure with Aetna bureaucracy.

    * "...cost a lot of extra hours. You see, these exchange plans, like Medicaid, will cause ridiculous overhead. "
    The overhead of US medicine is tremendous. The reason: many private insurance plans, with myriad restrictions,
    calls to find out what is covered,pre-treatment approvals by accountants
    appeals for wrongfullydenied reimbursement..... (Whoever denied your care got a bonus, though).
    A US hospital may employ 200 accountants and such to collect the bills, where a similar-sized Canadian one employs 3.
    As for the governmental programs, Medicare/Medicaid, the overhead is minimal, standard code forms... doctor gets paid
    by the end of the month, reliably (even if your doctor complains about the low rate).
    So this is a good argument for single-payer healthcare, apart from the overhead on the payer side, where I mentioned that the overhead for private insurance is now, limited to 15% by Obamacare (that is insurances must now pay out 85% of your premium dollars to health care providers; before PPACA they paid out less, and kept more). By comparison, for Medical/Medicare, ~3% goes to overhead /administration /fraud, 97% goes to health care.
    Another secret never mentioned in the press. (Government being more efficient than private industry! Can't mention it, even if true!)So when you hear about the 'millions lost by Medicare fraud,' you now know that it is insignificant (as part of total Medicare budget of ~500 billion in 2010).--
    What we now call Obamacare was invented, after all, by the conservative Heritage Foundation
    http://thinkprogress.org/politics/2010/04/10/90621/heritage-romneycare/ as an alternative to 'Hillarycare,' so as to keep private health insurance in business, and many faults we find with it have to do with the continued involvement and insufficient regulation of private insurers.--

    * In another comment you write, " I don't want taxpayers overpaying for insurance so that the CEO of Aetna can double his salary again." I agree, but that is an argument for single-payer.
    As long as you want to have the different of private insurance plans, you need the three legs of 1. Community rating 2. Individual mandate 3. Cross-Subsidies. (See: http://www.nytimes.com/2013/08/19/opinion/krugman-one-reform-indivisible... )

    * "US subsidizes drug prices for other countries. In fact, the US subsidizes drug costs for hospitals that use this great loophole" That is a claim of the pharmaceutical industry proffered so they can continue to charge excessive prices in the U.S.
    http://archive.fortune.com/magazines/fortune/fortune500/2012/industries/21/ tells us that the drug industry makes very healthy profits, all 10-14% of sales, much more than other industries.(The pharma sector in my retirement fund seems to pay out healthy dividends, more so than most). The claim is that this excessive profit is needed to fund drug research.
    Now new drugs, like really new ones, not me-too drugs, are typically discovered, as you may guess, by researchers under a NIH grant, who then form a small company to evaluate it, if successful, small company then is bought by big pharma company, which then pays for expensive clinical studies and FDA approval. Once approved, they have the patent, allowing them not only to recover their sunk cost in a short time, but to continue to fend of producers of generics and charge high prices for many years. So it is not that they are limited by income (apart from the fact, that they can deduct research expenses as business expense from taxes, and spend more on advertising than research)
    (See also http://www.bmj.com/content/345/bmj.e4348 )
    So there may be horrendous expenses at the beginning, but once the drug is approved, the marginal cost of production is relatively low, and they can make rather large profits, sheltered by the government license called 'patent.'
    Now, if the government or large insurers require drug companies to give them a rebate, as in the NYT article you cited, pharma companies won't go under, and drug development does not halt. Drug do cost less in other countries, as the drug companies can still make a rather good profit selling it there, and are optimizing the price for max profit considering the ability of local people to pay. That does not mean that the US subsidizes the rest of the world, but that selling at lower prices is still profitable And , Hoffman La Roche also develops new drugs in Switzerland, as does Bayer in Germany, ... in France.... And, finally, absent Obamacare, drug companies would still feel the pressure from private insurances to give rebates, as otherwise their drugs would not be reimbursed. For years already many insurance plans required the use of generics if available, and restricted certain new and expensive drugs. (And as regards the NYT article, shouldn't government be able to get some rebate so as to pay less for more poorer people's care; wouldn't we accuse the government bureaucrat paying full price, no questions asked, of wasting taxpayer money?)

    * On the medical travelers: Of course, the world's wealthy people may flock to some famous hospital or clinic in the US,
    but these famous hospitals may not be covered by your insurance plan, Nor are they covered by mine, or that of anybody else I know. These hospitals won't perish because the reimbursement rate goes down under PPACA-provided insurance.
    -- The context I wanted to provide is that 10 times as many Americans go abroad for medical services as foreigners come to the U.S. Of course, the wealthiest of the wealthy want the most advanced facilities the US can provide. But it makes no difference to the rest of us.

    Enough ranting. Also need to work.....

    Thom Hartmann at Alternet expands on drug pricing (under inflammatory heading:
    11 Major Drug Companies Raked in $85 Billion Last Year, and Left Many to Die Who Couldn't Buy Their Pricey Drugs):
    http://www.alternet.org/11-major-drug-companies-raked-85-billion-last-ye...

    Hank
    We'd better hope the 'all corporations but the one I work for are evil' crowd don't get their wish. New small molecule drugs cost billions to make and fail 95% of the time, then they get a short window to sell it before it goes generic. If the government has to take over this too, it will cost $60 billion and take 40 years just to get a different flavor of aspirin.

    Crackpots on Alternet have zero clue how actual innovation works - they think the government invented the Internet.
    H.C. "they think the government invented the Internet. "
    The 'they' referred to here are poor souls, like those who who did not get the message, that
    " Apple Computers ...: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other’s garages. "

    Drug development is costly,but if it is already done so efficiently by the pharma industry, why do we still need NIH?

    H.C.: "'all corporations but... are evil' " You are the first to mention that in this thread. I do hope your employer is not evil,
    and actually assume that (non-evilness) of most companies. It is required that companies make a profit, so as to survive. It is expected that companies work to increase their profits, and that may be largely good, and occasionally not so good. Sometimes one may object to companies using lobbyists to bribe lawmakers to write laws that protect them from the free market, as by granting patent or copyright licenses for too long a time.(Definition of 'too long' is of course, difficult.) E.g. as Matthew said" I don't want taxpayers overpaying for insurance so that the CEO of Aetna can double his salary again."--

    H.C.: " New small molecule drugs cost billions to make and fail 95% of the time, "
    From Light and Lexchin, Pharmaceutical research and development: what do we get for all that money?, BMJ 2012;345:e4348
    http://www.bmj.com/content/345/bmj.e4348 or www.bmj.com/content/345/bmj.e4348?ijkey=Y1g4ZVUImIbtXOI&keytype=ref (may be behind pay wall, so I excerpt a segment:)
    " Although the pharmaceutical industry emphasises how much money it devotes to discovering new drugs, little of that money actually goes into basic research. Data from companies, the United States National Science Foundation, and government reports indicate that companies have been spending only 1.3% of revenues on basic research to discover new molecules, net of taxpayer subsidies.23 More than four fifths of all funds for basic research to discover new drugs and vaccines come from public sources.24 Moreover, despite the industry’s frequent claims that the cost of new drug discovery is now $1.3bn (£834m; €1bn),25 this figure, which comes from the industry supported Tufts Center,26 has been heavily criticised. Half that total comes from estimating how much profit would have been made if the money had been invested in an index fund of pharmaceutical companies that increased in value 11% a year, compounded over 15 years.26 While used by finance committees to estimate whether a new venture is worth investing in, these presumed profits (far greater than the rise in the value of pharmaceutical stocks) should not be counted as research and development costs on which profits are to be made. Half of the remaining $0.65bn is paid by taxpayers through company deductions and credits, bringing the estimate down to one quarter of $1.3bn or $0.33bn.27 The Tufts study authors report that their estimate was done on the most costly fifth of new drugs (those developed in-house), which the authors reported were 3.44 times more costly than the average, reducing the estimate to $90m. The median costs were a third less than the average, or $60m. Deconstructing other inflators would lower the estimate of costs even further."