One theory of how single payer/universal healthcare systems are less expensive than the US private insurance market is that each country functions as a monopsony: a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. For example, with drug pricing, a country can ultimately tell Pfizer, "We don't want to pay more than X for your new drug. If you don't agree, you can take your business elsewhere", and Pfizer is forced to agree because otherwise they lose an entire market. I have two questions on this logic:
Pfizer is a global company, they sell to many countries, how can any single small country be considered a "monopsony" on Pfizer's products? . In a global marketplace, with many payers, it would seem that none of those payers individually can claim to have a monopsony. And this is especially true for small payers, such as Sweden, Norway, Denmark, New Zealand, which are individually a very small part of the global customer base. And this brings me to the next question, the flipside:
Why don't US health insurers have the same "monopsony" power? Why can't Aetna, which is bigger than many countries, tell Pfizer the same thing: "We don't want to pay more than X for your new drug. If you don't agree, you can take your business elsewhere"? How is their "monopsony" any less than Sweden's, which is a much smaller market?