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Why do Americans pay more for their meds?
Why do Americans pay so much for their pharmaceuticals? That's the question posed by Sen. Herb Kohl, a Democrat and chairman of the Senate Special Committee on Aging, who has written to the world's top drugmakers to demand an explanation.
"Americans pay, on average, twice as much as people in other industrialized countries," Chairman Kohl states in the letter. "While I firmly believe that drug quality should not be sacrificed for cost, the large discrepancies in the cost of identical drugs cannot be explained by differences in production or manufacturing." Recipients of the letter included top drugmakers AstraZeneca, GlaxoSmithKline, Lilly, Novartis, Pfizer and Sanofi-Aventis.
What say ye, Big Pharma? Well, Novartis says it's reviewing the letter and will respond to Kohl and his committee. A GSK spokeswoman wouldn't comment. Pfizer's spokeswoman says the company stands behind the value of its drugs and reminds Reuters that it had programs that provide free or discounted meds to uninsured or needy patients.
Only Eli Lilly takes a stab at a substantive response, saying that drug prices are lower in other countries for a lot of reasons, including currency exchange rates, individual market dynamics, and government price controls. U.S. prices tend to be higher, says Lilly spokesman Ed Sagebiel, because Americans rely "on competition rather than government-imposed price controls that contain costs." Plus, Americans have the greatest access to new drugs, which also tend to be the most expensive, he adds. In other words, the free market gives the U.S. free access, but at a higher cost. What do you say to that?
- here's the committee's release
- click here to see links to the letter
- read the Reuters story
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How do international drug prices stack up?
Comments
One big reason is marketing cost. Was once told by C-level at AZ that if marketing in US was same as EU then cost would be same. However, much more marketing in US - adverts etc - therefore much higher costs to payor.
A large part of the marketing costs are the free samples at the doctors office that everybody loves.
I believe pricing also is indicative of what the market will bare.
Does Ketchup cost the same in Mexico as it does in the US? How about Bread?
I know, I know -- because Big Pharma and Big Insur have managed to get Big Gov to fund them beyond their wildest dreams. They have bought enough Reps and Senators to repel any attempts to bring the prices to heel. Oh, wait -- quality; yeah, that's the ticket. Them ignorant Europeans must want low quality meds. Strange folks, huh?
Big Pharma/Big Insur funding = wrong; increase samples to MD's = wrong, Increase Advertising = wrong. People are SOO NIEVE about this subject. Remember, there isn't a generic drug that wasn't a brand drug at one point that a company spent 1-1.5 billion to develop. We have the best medical system in the world....quit bitching! Sell your house that you cannot afford or that car that you cannot afford and buck up for medical services...nothing is free!
Americans pay more because everyone, especially the government, want discounts. To balance this out, drug companies have to start with a significantly higher list price. If one has no leverage, they pay top prce. Where the extra money goes is into the pockets of middlemen who group sales and pass on (part) of the savings. What we need is one fixed price for all from drug company to patient. Then all the middlemen will be squeezed out, prices will decline and manufacturer's profits will increase.
Drug prices in the US are simply an matter of charging what companies believe is the highest 'competitive' price in the market place. It's what managed care will pay for relative to alternative therapies and play that off against rebates etc.It has nothing to do with what goes on in Europe or else where. American get the prices they do because they arent prepared for 'government run healthcare'...Except if they get Medicare, Medicaid, Tricare etc.
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