A new report from Reuters suggests that pricing pressures resulting from Obamacare may close U.S. and international prescription drug price disparities – with U.S. prices more than double those of other high-income countries – within three to five years. As good as that could be, it’s a long way away for Americans who currently struggle with drug prices. With tens of millions going without meds due to cost, the problem is more urgent than ever.
U.S. brand-name drug prices continue their vigorous rise, in stark contrast to international price declines. Brand-name U.S. drug prices rose 11% in 2011, almost triple the 3% inflation rate. Meanwhile, prices in Canada stayed the same, and actually dropped in France and Switzerland by 3 and 4 percent, respectively.
Reuters politely explains this gap:
“Companies like Pfizer Inc. and AstraZeneca have grown dependent on higher U.S. prices to generate profits as generic rivals to their best-selling medicines enter the world market, Europe’s government-run health plans clamp down on spending and sales growth in emerging markets stutters.”
Perhaps these price increases explain the 50 million Americans between the ages 19-64 and the 20% of Medicare enrollees who do not fill a prescription due to cost each year.
Look at the price of Januvia, a drug mentioned in the Reuters article. Its wholesale price is 75% higher in the U.S. than in Austria. Our own research shows the price gap at the retail level. The price at a local pharmacy for 90 pills is $978. It costs only $375 online from a verified Canadian pharmacy. That’s 62% cheaper.
Hopefully, the Affordable Care Act will lead to reduced drug prices domestically, but that will take some time. Until then international online pharmacies will remain a lifeline for Americans.
As long as big pharmacy keeps footing the bill for free dinners, drinks, and other perks to doctors, hospital administrators and pharmacists there will be no cost reductions for meds. Not to mention paying off the generic drug manufacturers NOT to produce generic versions of their high profit name brand drugs that go off patent. Ok …. I mentioned it and it should be mentioned and illegal.
The Reuters article is little more than wishful thinking. The PPACA aka Obamacare does nothing to contain pricing for anything. That is not its purpose. Drug pricing will continue to escalate based on the way drugs are developed in the U.S. and around the world. America subsidizes R & D and development costs by a systemic series of challenges from the bench to the bedside. The idea that big pharma's excesses for lavish perks is largely a myth although it does occur. If we want lower prices they exist now but the government puts up barriers to entry for more reasonably priced drugs to come into the United States. There are some simple fixes if only government would get out of the way. Universal drug authentication would drive prices in the U.S. down were the general population allowed to safely import drugs from other nations. Domestic drug suppliers would have to lower prices. You do remember how auto imports in the 70s and 80s. In my opinion the same thing will happen but due to the impact of government.