Why Government Health Programs Overpay for Drugs by 50 Percent

In this episode of The Fiscal Policy Podcast, Lucas and Luna explore how the US government's drug-pricing system for Medicare and Medicaid results in overpayments of over 50 percent compared to other countries. They focus on a specific case: the drug insulin, which costs US taxpayers $6,000 per patient per year versus $1,200 in Canada. The hosts discuss the role of pharmacy benefit managers (PBMs), the lack of direct negotiation, and recent policy proposals like the Inflation Reduction Act's Medicare negotiation provision. Lucas breaks down the mechanics of 'list price vs. net price' and explains why government procurement rules actually prevent the US from negotiating lower prices. Luna raises the question of why the government doesn't just set prices like other nations. The episode ties into broader themes of government spending inefficiency and the fiscal impact of healthcare costs. #Medicare #Medicaid #DrugPricing #Insulin #PharmacyBenefitManagers #GovernmentSpending #FiscalPolicy #InflationReductionAct #HealthcareCosts #PrescriptionDrugs #Negotiation #Procurement #Economics #PublicFinance #FexingoBusiness #BusinessPodcast #PolicyAnalysis #CostSavings Keep every episode free: buymeacoffee.com/fexingo