USA Pays a Lot More for Drugs Than Other Countries
December 30, 2015 6:00am by Barry Ritholtz
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The irony that Bush and the Republicans made a mad dash to cover all seniors regardless of need with Medicare Part D (Socialism) that allows drug comapies to charge what they want (Martin Shekel) while those very same GOPers decry free market ACA marketplaces (Free markets) and the proud Republican governors deny their own state’s citizens Medicaid (Politics) is the bellcow for the lunacy of the Republican party without philosophy other than maintaining emotional commitment from The Base (Trump!) to give deficit exploding tax cuts (Paul Ryan’s $700B) above all else.
The drug companies like to argue the difference in pharmaceutical prices between US consumers and elsewhere is less than it appears because of numerous ‘discounts’ but the difference in profits tells the real story and the putative discounts primarily serve as smoke and mirrors to hide the truth which is actually quite simple: big pharma’s extraordinary profits derive from government granted monopoly via (a) patent laws, (b) restricted sourcing, and (c) limited or no price bargaining including Medicare.
Why???
er, greed, corruption, ignorance, monopolistic economics, more greed, more corruption.
Hmmm, did I mention greed and corruption?
BigPharma and Medicine are hardly angels of mercy simply because they are in health care. We call it the Health Care Industry for a reason; patients are inputs and sources of revenue. There are no human beings in a hospital; there are units of income generation. Every act of health is calculated by managers and lawyers who figure out how far they can push before the risk or cost of lawsuits outweigh the profits. When that hits its limits, they bribe Congressmen to push through legislation like Obamacare (which is neither Democrat nor socialist. It is fascist and not-so-secretly loved by the Republican party for the huge handouts it gives to insurance and healthcare).
Why? When the pharmaceutical industry can lie, cheat, bribe, and steal to create monopolies and massive profits, then the real question is “Why the hell Not? Bwah ha ha ha ha ha!”
The article leaves “Why” completely unexplained.
Merck KGaA is a German multinational chemical, pharmaceutical and life sciences company headquartered in Darmstadt,
Sanofi S.A. is a French multinational pharmaceutical company headquartered in Gentilly, France
AstraZeneca plc[3] is a British-Swedish multinational pharmaceutical and biologics company headquartered in London, United Kingdom.
GlaxoSmithKline plc (GSK) is a British multinational pharmaceutical company headquartered in Brentford, London.
Novartis International AG is a Swiss multinational pharmaceutical company based in Basel, Switzerland
Bush and the Republicans saying the government couldn’t negotiate drug prices with their socialisylt expansion of Medicare part D? Maybe?
Free markets work great when one groups hasnto take the other’s price. Real hard economic thinkers those Republicans.
Countries with universal healthcare (most of Europe plus Japan) negotiate for drug prices or have a formula based on other countries’ prices (Canada). The USA has wide open legal monopoly pricing. Q.E.D. Either eliminate drug patents or institute price controls/caps like every one else.
I don’t understand your point? That they are all multinationals located outside the USA?
The article also ignores the fact that individuals without insurance almost never get the ‘discount’ rate. It is a mystery how these executives can sleep at night knowing they are gouging the most vulnerable among us.
Insulin is a great example of crazy pricing models. The price of 37 year-old non-recombinant varieties of insulin has gone up by 1400% in the past 15 years. Thankfully, walmart supplies the drug at a 300% markup, but if you’re not near a walmart and are uninsured…. pay or die in a coma.
The modern insulin analogues derived developed in the past 20 years conveniently have their patent protections extended every time they come up for expiration. Even though the newer insulin greatly improve quality of life and decrease the chances of long-term complications (leading cause of amputations and blindness in the USA), the government actively works to ensure there are no cheap generics available.
What a screwed up system!
The why is pretty easy – the drugs company bought off Congress.
the drug industry claims there are discounts. but wont tell us what they are. so why should we believe them?
Why? Most other countries governments regulate how much essential products, such as drugs.
Here, lobbyists have brought off enough politicians that any effort to impose price controls on drugs will be blocked. Same with gun control.
Many countries have price controls thus companies have less room to jack up prices versus the US system. Costs in other countries may also be lower since 1) advertising costs are lower (most countries do not allow direct to consumer advertising for pharma products so that expense doesn’t exist…and “professional” advertising cost is also lower than in US market) and 2) US legal costs are typically higher. We, alas, are consumer and lawyer driven in ways that are not necessary helpful to consumers.
I have been in the life and health insurance business for 40 + years. One of the reason drugs are so expensive is the PDP for seniors passed by a Republican controlled Congress that stayed open late into the night to get the required votes to pass, after which several retired from Congress and joined drug firms or lobbying firms representing the drug industry. There was a penalty for those who signed up after they were originally eligible, and silly me since I was healthy and not taking any drugs at the time ,I didn’t sign up. The result is that I now pay $11.70 extra a month for my current drug plan as the penalty for signing up several years late. The insurance companies found a way to bigger profits with these plans and not much incentive to control drug costs. While pricing many drugs this year, I notice that 50-100% drug price increases were not unusual.
Yet Seniors got no COLA because gasoline prices were down! I venture to guess that seniors pay more for drugs and or Part D than they do for gasoline.