Easy to follow explanation for why drug prices are so high in United States as compared to other countries. Here are several excerpts from this important Medscape Today article:
Why Are Drug Costs So High in the United States?
Roxanne Nelson – November 19, 2014
The United States has the dubious honor of paying the highest costs for drugs in the world, even compared with other wealthy nations, such as Canada, Germany, and Japan. The difference in price can often be substantial, especially among the newer and very costly agents that have recently come on the market…
“For the longest time drug companies had a dual mission,” said Hagop M. Kantarjian, MD, professor and chair of the Department of Leukemia at the University of Texas M.D. Anderson Cancer Center in Houston, who was involved with the study published in Blood. “They wanted to help patients and at the same time make a reasonable profit.”
Dr Kantarjian pointed to George Merck, son of the founder of the pharmaceutical company, who highlighted this concept when he said that “medicine is for the people. It is not for the profits.”
“Until about 2000, this practice has been followed; they were in synergy with investigators, they were helping patients, and they were making reasonable profits,” Dr Kantarjian told Medscape Medical News. “But now I think they have lost their moral compass…”
Drug prices in the United States are basically a confluence of the complex and lengthy drug development and approval process, and an equally complicated healthcare system.
“The drug companies and others believe that these drugs represent such a significant value to patients and society that the cost is warranted,” said J. Leonard Lichtenfeld, MD, Deputy Chief Medical Officer for the American Cancer Society. “They say that if we don’t allow the drugs to be priced properly, we will stifle innovation on a number of fronts, especially when it comes to new ‘druggable’ targets, where we have only scratched the surface…”
It’s rare to see a twelve page article about anything these days. This is definitely a must read.
One of the many debates it covers: Does it really cost over a billion dollars to bring a new drug to marked? I had heard it’s closer to 30 or 40 million, especially for drugs in cancers like multiple myeloma, where the FDA has helped speed the process along. It can now take as little as five years to get approval, not over a decade like in the past. And it only takes a few patients to get to Stage 3 trials, then hundreds–not thousands–of patients to make it through Stage 3.
Contrast that with blood pressure medications, for example, that may require many years of testing on thousands of patients in order to garner FDA approval.
Regardless, why is the cost of cancer drugs 20-40% higher here than in Europe–and even less in many Asian countries?
“The US makes most of the discoveries, the taxpayer funds 85% of the basic research, and yet at the end of the day when a drug is FDA-approved — for cancer as well as for other indications — we as Americans are paying at least twice the price as those outside the US,” said Dr Kantarjian. “In the setting of most cancer drugs, you can find them at half the price in Canada…
The major reason for the disparity in pricing is that the United States lacks any sort of central or universal healthcare system or agency that regulates across the board cost. In contrast, negotiations of drug prices between governments and pharmaceutical companies are routine in Canada, most European nations, and most countries in the Middle East and Far East. They have centralized authorities to negotiate more favorable prices with manufacturers, and some also have drug formularies and advisory boards that put restrictions on the use of new and expensive medications…
Here’s the link to the article:
You may have to register in order to see it, but there’s no charge.
Reading it may be frustrating, but it’s hard to facilitate change without some background information. On my daily blog, MultipleMyelomaBlog.com, I’ve been advocating that cancer patients and caregivers become a voting block, pushing for better and less expensive access to care. If a politician–regardless of party–tries to cut NIH or NCI budgets–vote ’em out!
Feel good and keep smiling! Pat