# The American healthcare system warps the market for health technology At least in the US (and remember [[The US accounts for almost half of the world’s spending on drugs]]) many insurance companies are contractually obligated to pay for drugs that successfully go through FDA trials. As a result, companies have a basically guaranteed market and the ability to command large prices if they can create a drug that is better than state of the art. High margins on health technologies are also a result of strong disconnect between patients using them, organizations ultimately paying for them (primarily employers or the government) and the organizations setting prices (some combination of hospitals, drug companies, and insurance companies). The dynamics of this system are complicated and understanding them requires expertise far beyond my own, but the result is that health technology can command prices far above what it would in a competitive market.