Why the US Pays More for Drugs

The people in the United States pay more for drugs than any other country.  And, they pay more to universities to do drug research than other countries.  In a nutshell, it is due to a lack of regulation in the U.S.

Two very insightful articles appeared in the past week addressing the inequity of global drug prices — The New York Times and the Wall Street Journal.

Drug companies constantly complain regulations are hurting profits.  Now it appears without enough regulation drug companies are hurting sick patients.  As big pharma points out, it’s all legal.  Basically, big pharma points a finger at the US Congress for not imposing restrictions common in the rest of the world.  Sounds like a circular argument!

Between the two articles linked above and this author’s experience here are the reasons:

1. Abuse of patent laws
2. Driving small drug  companies and generic companies out of business with frivolous but highly expensive suits.
3. Release of a similar drug before a patent expires and manipulating doctors and patients to change to the new drug suggesting the similar drug is “MUCH” better (evergreening).
4. Paying new drug makers to delay marketing their competitive drug (pay-to-delay).  While at the same time asking for a fast track through the FDA approval process.
5. Claiming a new drug is novel when by any reasonable standard it is not (asthma inhalers are a good example).
6. Coupling devices to drugs to double the difficulty for competition (like insulin pumps).
7. Failing to pay their fair share of basic drug research, funded by the US government instead.
8. Happily doing “inversion” deals to move headquarters to other countries to evade US taxes — into the very countries that strongly regulate drug company profits.
9. Voluntarily limiting profits in many countries due to the threat of regulation, but failing to offer the same deal to the US.
10. Lobbying successfully to prevent Medicare (a larger health program than the NHS in the UK) from negotiating prices as the UK has done for many years.
11. Blackmailing patients to pay for old drugs at exorbitant prices because generic companies are afraid to compete (pricing because-they-can, oral beclomethasone is one example).
12. Preventing drugs from other countries to be sold across borders because of unfounded safety concerns (crocodile tears).
13. Actively avoiding drug comparison research — forcing others to do that type of research after the drug is already marketed.
14. Doing cancer drug research with endpoints (such as tumor size) rather than life expectancy.  85% of cancer drugs now have no connection to the most basic expectation of patients, to live longer.
15. The WSJ review of 40 drugs administered in physicians offices:  39 cost less in the UK, 37 cost less in Norway and 28 cost less in Ontario Canada.  The price gouging in the US certainly suggests racketeering.
16. Drug company profits are 17% in the US and 7% elsewhere.
17.  Actively avoid cost-effectiveness research — prescribers don’t know whether a new drug is better or worse than old drugs except by what is told to them by marketing.  (Unlike the UK drug system which is strongly linked to cost-effectiveness)
18. Drug companies hide special deals with large customers so other customers have no idea of the low end of the price spectrum.  The companies are so large that a lone US State can not leverage deals needed to lower prices like countries can.

Perhaps I have missed some other corrupt practice or unethical behavior, there are just so many.  This mess needs to be cleaned up!  At very least the US Congress needs to institute controls similar to other countries.  Feel free to send this blog to your congressional representative — with a copy of your drug bills!