For those who want a comprehensive but straightforward explanation about why drug prices are incredibly higher in the U.S. than in other countries, I strongly recommend reading in VOX, “The true story of America’s sky-high prescription drug prices.”
Many of you know that in other countries, such as Australia and Canada, government agencies negotiate with pharmaceutical companies through myriad policy interventions to keep prescription drugs affordable for their citizens. This article explains how that’s done, why it works – but also identifies the tradeoffs where in some cases a new drug is not available outside the U.S. because regulators decide it doesn’t offer additional value over existing drugs.
It also addresses the issue of how research and development to find new drugs may be negatively affected if the U.S. institutes more control over drug prices. Some people argue that broader access to currently available drugs at lower prices means fewer new breakthrough drugs coming to market. [EDIT 12/9/2016: I wanted to make clear that many people do not agree with this position and argue that more drug company profits are spent on marketing and advertising than on research and development and the pharmaceutical industry greatly exaggerates the prospects of less innovation due to drug price controls].
In speaking with lots of people on different sides of the political spectrum and with contrasting governing philosophies — everyone agrees that us Americans are getting a bad deal on drug prices right now. This VOX piece really speaks to the issues at hand, objectively and truthfully, and if you’re interested in “getting it” you should read it.Tagged with: price controls, VOX