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The Best $10,000 I Ever Spent

2019-07-26 · letter vlog · Hank · 3:49 · watch on YouTube

Topic: Economics (also: Personal life, Health) · mode: Personal essay · tags: heavy topic

Hank says the best money he ever spent was over $10,000 on prescription drugs while uninsured, then argues that prevailing economics wrongly equates making more money with creating value: price hikes on insulin or his own drug serve fewer people and destroy value, while drug companies favor buybacks and patent extensions.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — The question 'what's the best money you ever spent?': his guitar and his Honda Civic

  • ★ Asked what the best money he ever spent was, Hank first thought of his guitar, which brought endless enjoyment, and his car, ten years in with no problems. — 00:00:00
  • ★ His Honda Civic was rear-ended so hard the other car's airbags went off without a scratch on it, but Hank, who doesn't care much about cars, would be a poor brand ambassador. (playful) — 00:00:00

00:00:29 — The true answer: over $10,000 on prescription drugs while uninsured before Obamacare, and the drug's rising price

  • ★★★ Hank's true answer: in the roughly three years between losing his insurance after grad school and Obamacare, he spent a little over $10,000 on prescription drugs. — 00:00:29
  • ★★★ The drugs kept Hank out of constant pain, helped his body take in nutrition and stop bleeding into itself, and prevented a lifelong loss of physical ability. — 00:00:29
  • ★★ Hank's drug went from about $250 to $400 while he took it; he still takes it, and uninsured it would now cost $1,700 a month. — 00:00:29

00:01:16 — Money is not value: insulin's price, doubling prices, buybacks, NIH funding, patent extensions and the lies of Econ 101

  • ★★ Hank would pay that, because people pay what they can for the use of their own body; it is the best money he ever spent, but he is not happy about it. — 00:01:16
  • ★★ Not an economist himself, Hank says many economists he has listened to are convinced we have made a massive mistake. — 00:01:16
  • ★★★ Hank says the cost of insulin has increased a thousand percent since he graduated from high school. — 00:01:16
  • ★★★ An economist would say insulin's value to the economy rose a thousand percent, but it hasn't: insulin delivers the same value as twenty years ago, a healthier, longer life. — 00:01:16
  • ★★★ Thankful for his medicine, a tremendous gift to him and his family, Hank says its value is created whether or not we turn it into dollars, which the current system doesn't accept. — 00:01:54
  • ★★★ By prevailing theory, doubling his drug's price so 25% of users can't afford it creates more value because more money is made; Hank says it creates less, serving fewer people. (hypothetical) — 00:02:17
  • ★★★ Against the argument that they need money for new drugs, Hank says drug companies spent more in the last 10 years on buying back their own stock than on research and development. — 00:02:17
  • ★★★ Hank says 75% of revolutionary new drugs were funded by the National Institutes of Health, with public tax money, which he calls money well spent. — 00:02:17
  • ★★ Hank says drug companies spend much of their R&D money turning existing medications into slightly different ones to extend their patents. — 00:02:59
  • ★★ Hank thinks drug companies believe creating more money is the same as creating more value. (hedged) — 00:02:59
  • ★★★ As long as business leaders keep believing the lies of Econ 101, Hank says, we will be destroying value when we think we are creating it. — 00:02:59
  • ★ Hank holds up the $1,000 savings bond he got on graduating from college, just for a good thumbnail so people will watch. (playful) — 00:02:59

00:03:28 — Savings-bond thumbnail joke, sign-off and recommendation of Mariana Mazzucato's The Value of Everything

  • ★★ To read or think more on this, Hank recommends Mariana Mazzucato's book The Value of Everything or any podcast or talk she has given. — 00:03:28

In the description and comments

  • ★★ In the description Hank says he can't define value, but fewer people taking medicine while more money is made is not creating value; the definition of value isn't settled. — video description
  • ★★★ Without systems that drive down the cost of needs, Hank says, we spend everything we have on them; health, education and housing can't be run to extract every drop of value, or people are impoverished. — video description · education

Threads in this video

Mentioned

Central: economics · health care prices in the United States · insulin · value (economics)

Also: People: Mariana Mazzucato

Works: The Value of Everything

Organizations: National Institutes of Health

Concepts: evergreening · health insurance · pharmaceutical industry · share repurchase

Products: Honda Civic

Policies: Affordable Care Act

Only in the description or credits: education

Also centred on health care prices in the United States: The Political Situation at the County Fair · Health Care Reform Thought Bubble · The 1200% Increase in my Prescription Drug Costs · Question Tuesday! Paula Deen Riding Me (and critical reading) · Why Are American Health Care Costs So High? · Is Obamacare Working? The Affordable Care Act Five Years Later

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