Nothing makes anything less affordable than a government promise to make something more affordable, and a Texas pharmacist revealed this week how an $18 generic antibiotic gets listed for $2,500. But from there, things get so seriously stupid that you just know there must be a government program involved.
Brad Hart, along with his wife Glenda, own Forest Park Pharmacy in Fort Worth, so he knows a thing or two about how the system works — and just how dysfunctional it is.
"A family came in wanting to transfer their kid's antibiotic to us," he posted to X earlier this week. "The child had already STARTED the course. Then, mid-treatment, the insurance company decided the last 14 tablets suddenly needed a 'prior authorization' before the other pharmacy could hand them over."
All this for Linezolid, a generic antibiotic that costs Forest Park $18.
Why all the fuss for something so inexpensive?
Hart explained, "Insurance and the PBMs [Pharmacy Benefit Manager] behind them price drugs off a number called AWP — 'Average Wholesale Price.' People in my industry have another name for it: 'Ain't What's Paid.' It's a benchmark number, not a real-world cost. On paper, the AWP for just those last 14 tablets is about $2,500."
"The system that's supposedly 'protecting' this family from cost is the same system that inflated an $18 medication into a $2,500 line item, then slapped a prior auth on it to "review the expense" THEY invented," Hart continued. "They manufactured the problem, then billed everyone for the privilege of solving it."
PBMs and AWPs were unfamiliar to me, so I asked Grok to explain how they work and why they exist.
The short version is that Washington's tax incentives and Affordable Care Act (thanks, Obama!) mandates push everything into third-party insurance, disconnecting patients from real costs. Medicare Part D (thanks, W!) and weak transparency rules empower PBM middlemen (another Washington creation) to profit from fictional AWP benchmarks, delaying care and sucking up tax dollars while also overcharging sick people.
You get robbed coming and going.
Really, what the insurance companies do here is play arbitrage games enabled by government meddling in the name of affordability. That's why Forest Park Pharmacy doesn't take insurance and just sells medications at a market-rate markup from their wholesale cost.
One solution — and this is exactly what I used to do — is to buy bare-bones high-deductible health plans with catastrophic coverage and pay cash for everything else. But I can't do that anymore because Obamacare made those plans mostly illegal or unobtainable.
Why, it's almost as though the entire system were geared for price-gouging.
Fraud, too.
There's the case this week of the Las Vegas nurse practitioner who put together a [dr_evil_voice] ONE BILLION DOLLAR [/dr_evil_voice] Medicare fraud scheme. She's just the most recent of countless other cases that we read about so often, it's become numbing.
"Prosecutors allege that between October 2023 and April 2026, [Marizel] Yukee and unnamed co-conspirators submitted more than $906 million in fraudulent claims to Medicare and TRICARE, the federal health insurance program covering military members and their families, through four wound care companies she owned," Texas Scorecard reported this week. "From those claims, the government paid out approximately $297 million, according to the indictment."
"I have to think that the sheer scale of her operation probably doomed her," Lawrence Person added at Battleswarm. "Employees in her Houston-area clinics had to have known skin grafts for dying patients weren’t medically necessary."
Well, yeah — but smarter fraudsters can keep going for much longer, maybe forever. And don't forget the insurance companies that regularly commit acts that would be fraudulent if they weren't following the "affordability" laws written by Congress.
So even if we set aside the warped market conditions that incentivize insurance companies to rip you off, Washington acts as the world's largest honeypot for fraudsters.
Federal spending on Medicare/Medicaid amounts to $1.8 trillion. That's a one and an eight followed by 11 zeroes. That's 80% more than we'll spend on national defense (!!!), and while I can read with my own eyes where the Constitution calls for an army and a navy, the word "health" doesn't appear anywhere.
Nevertheless, Washington spends so much on Medicare and Medicaid that, if federal health spending were a nation, it would be an economic superpower ranking among the world's ten largest economies. The People's Republic of Medistuff would rank just above South Korea and just below Canada.
So what I'm saying is this: When you put that much money in any one place — and make it basically untouchable because it's ostensibly to serve the old and the poor — it's going to attract every kind of scammer.
There's no reform. There's no fixing it. It's got to end.
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