Comment by AnthonyMouse

> You don’t want drug companies figuring out what price makes them the most money, because the market for patented drugs is not a competitive market (or a transparent one for the consumer). The price that makes the company the most money is not the same as the one that maximizes welfare.

It's not supposed to be competitive, that's the entire point of a patent. They're supposed to be able to extract nearly the full value of the drug during the patent term, because that's the value of the drug existing, so that's how much incentive you want there to be to create it. After that the patent expires and it becomes a cheap generic, which is what the public gets out of the deal.

> Romania has state mandated public health insurance (if you're employed or if you make over minimum wage from non employement sources, you have to pay for public health insurance), but the private health insurance market is also thriving.

Where this happens it's basically because the public wants more insurance than the government is providing, e.g. you're required to pay $3000 for $3000 worth of insurance but there are people who want $5000 worth of insurance so they buy another $2000 in private insurance.

But that doesn't really change the problem because the extra insurance covers different stuff. If your coverage from the government covers the drug and your coverage from a private insurer covers longer inpatient stays or hospice care, the latter is unrelated to the former. Meanwhile there are still a lot of people who only have the government insurance and can't switch to a different provider for that coverage because the government plan is required by law. And even if you could get drug coverage from a private insurer, the patient would then be paying for the whole cost of the drug out of the private insurance premiums even though they're still paying for the public insurance, which will deter people from doing that unless the government coverage is not just bad but catastrophically bad.

The way you could make it work is that instead of the government setting the retail price of the drug, they set how much they pay for the drug and the patient pays the rest, which the patient could then have covered by private insurance at their option. Then you actually have price discovery because if the drug is worth more to people than the government is paying, they'll buy the amount of private insurance needed to pay the rest.

> But, in Romania, Ozempic was negotiated/price controlled by the government to be for around ~100$/month. First year or two supply was enough, so we got it, this year demand in places with more cash is high, so Romanians don't get any more Ozempic (but we still have Rybelsus)

Production capacity isn't normally the issue for drugs under patent. The issue is that you need somebody to pay enough to cover the R&D or otherwise you don't get the drug, and drug R&D is crazy expensive because the price has to cover the R&D cost for all the drugs that don't work out.