UnitedHealth Group announced a new chief executive Tuesday, a sudden and surprising change following the fatal shooting in December of its UnitedHealthcare subsidiary’s leader.
Andrew Witty stepped down from leading UnitedHealth for unspecified “personal reasons,” the company said. Stephen J. Hemsley, who served as chief executive from 2006 to 2017, will return to the role and remain board chairman. Witty will serve as a senior adviser to Hemsley, the company said in a news release.
UnitedHealth has been the focus of sharp criticism over the health insurance industry’s practices and has seen its stock plummet in the past year. The Justice Department has investigated its business activities.
The gravy train of giant margin drugs is coming to an end.
Medicaid is gonna get gutted and drugs won’t be very profitable in the US overall. I suspect the pharma answer to this may be suspending sales in all other nations so long as the US patents are live, the profits here are so above and beyond all other places in the world that there’s little reason to focus on global markets if the restriction is lowest common denominator pricing in the US.
I worked in pharma for a while at a level that interacted with C level executives and the executive leadership of said companies. I’ve seen where the money is and seen internal numbers. US oncology sales are almost all profits.
I follow you but I also wonder, if no one can afford those drugs to begin with how viable is a plan like this? If the giant margins are ending, people have no income to purchase medicine with, and the US isn’t subsidizing it, how exactly are these meds getting to the public? Suspending sales globally to court poor Americans who can only dream of paying for meds doesn’t seem like an especially bright plan
So we CAN afford these drugs to begin with, because employer sponsored health plans with minimal coverage cost around $14000 and have $6500++ copays (I don’t remember today’s limits for copays, but you have to pay those copays out of pocket before an insurance company covers drugs typically.) The actual drugs cost pennies to make but sell for hundreds to thousands to hundreds of thousands. The prices that are listed for these drugs at retail are not actually what the insurance pays for these drugs, we’re never going to see those figures, but they’re aligned to maximize profits from the industry. Pharmacy benefit managers also collude by using a third party service to recommend pricing.
I’m too lazy to find good sources of material, but revenue in the US for pfizer is more in the US than the rest of the world combined. https://www.statista.com/statistics/267877/revenues-of-pfizer-in-submarkets-worldwide/ (I was able to view this without a subscription.)
Last year they had about ~63600 million in revenue. ~38691 million last year was in the US alone.
~16057 for “developed markets” aka europe and wealthy nations ~8879 for “developing nations” e.g. africa, latin america, poor asian countries.
So 38 billion in the us vs 63.6 billion total revenue.
If you have to choose between keeping US revenue or keeping non-us global revenue, you’re gonna choose the US. It’s not even close.
I’m guessing they can license their drug to some other business to sell internationally and get out of first party sales, but it’s possible they may have a legal mechanism to skirt this already since it’s typical for the US business to be a separate company than the holding company, and all the international businesses are separate companies under said holding company, it’s hard to say. I don’t have any inside information for today’s strategy.
The US isn’t subsidizing. Most of the cost of a drug is marketing and paying obscene amounts for small biotechs and then shifting that cost into drug prices.
Also nearly no one pays Sticker Prices in the US for Drugs and Healthcare. They have to charge an insane price, so some insurance guy can negotiate an astronomical “discount”
Just to tack onto this… it’s possible that we will see different branded drugs, and perhaps even slightly modified drugs to contain effectively a placebo to go through clinical trials concurrently with the primary drug. From there they just release one drug in the US and the other drug exclusively everywhere else.
That’s just one creative way to keep prices exorbitantly high. They can also target medical devices aka the delivery mechanism (think pre-packaged syringes) to try and keep profits high. Just release a US only delivery mechanism and suddenly it’s different than the rest of the world. I’ve worked at companies that slightly altered the injector of their drugs to keep their monopoly going, as doctors preferred the improved injector that had no generic due to being in copyright, even after the drug patent expired.
The pharma lobby is so wealthy and powerful though I sincerely doubt even dumpy can fight them. There’s a reason why biden started with just a handful of drugs, it built a foundation to slowly drain their profits while their current patents run out and they adapt to the new dynamic.
There’s also all those health insurance companies that legally can only profit a % of overall revenue that will face severe profit cuts if treatment costs actually dive, drugs are a key component to building a sizable margin today.___