can liberating medicine increase the price? Claritin.

[gusl]

This reminds me of the "identify the fallacies" part of the GRE Writing section

from here

When Claritin recently became available without a prescription, the health insurance industry and the companies they cover were licking their chops over the nearly $1 billion in prescription cost savings they'll enjoy each year. As for allergy sufferers, instead of a $15 to $20 co-payment to be diagnosed and prescribed the medication, they now have to pay around $1 per pill for over-the-counter Claritin, which adds up to hundreds of dollars per allergy season. While this plan is one heck of a deal for the HMOs, it perhaps can best be described as a whopping tax increase on average Americans with allergies.

The question, of course, is why over-the-counter Claritin would be more expensive. Perhaps this is a good case for archeological economists.

For one thing, they sell more, so they become cheaper to mass-produce... OTOH, being the only over-the-counter drug of its kind, it enjoys a sort of monopoly.

Comments

[candid.livejournal.com]

Where does it say it's more expensive?

I'm pretty sure it's cheaper, but insurance no longer pays for it, so it costs the consumer more out-of-pocket.

[gustavolacerda.livejournal.com]

ah... so insurance doesn't cover over-the-counter stuff... makes sense, since this way it would be totally open to abuse. Except, of course, in a system where patients were held accountable by a sort of credit system.

Do you think this would be possible in a world where patients were very well-informed (imagine HikeTheGeek level) i.e. insurance companies that trust the patient? Of course, they can always get audit.

I can imagine two extreme health insurance models:
* spending-based, i.e.: similar to loans (total patient responsibility), where all that matters is how much you've spent in the past.
* an idealization of the present model, where what matters is whether you "deserve" treatment (little to no patient responsibility),

with everything in between.



I'm pretty sure it's cheaper
why? The article suggests it's more expensive: "~US$1 per pill". Maybe they are simply misleading, but I'd like to hear your reasoning: why should it cheaper?

[altamira16.livejournal.com]

No, basically, the price didn't really change when it became over-the-counter (OTC). Before it went OTC, there was a huge price drop because the patent expired. Due to the fact that it is now OTC, patients, not the insurance companies, cover the cost of the medication. Typically insurance companies cover half of a prescription to all but a given co-pay between $5-$20 dollars. The generic brand claritin is MUCH cheaper. I think I have a bottle of 100 for less than $20 which is about what it would cost me to get 20 to 30 name brand Claritin pills over the counter.