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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