Posts Tagged price setting
Elisabeth Rosenthal wrote the lead story for The New York Times today (10/13/13) “The Soaring Cost of a Simple Breath“. This is another blockbuster exposé of drug costs that are crippling US health care. Sadly, not a story about what is being done to correct the problem.
Here are some of her key points:
- The average brand name prescription has risen from 1995 at $40 to 2013 at $170
- The average generic prescription has risen from 1995 at $20 to 2013 at $45.
- A common asthma medication Pulmicort costs $175 in the US but only $20 in the UK and $25 in France.
- Drugs account for 10% of the $2.7 trillion annual health bill.
- Americans take more generic medications than people in other countries (they just can’t afford branded or new medications)
- Other countries set the wholesale price of drugs to make drugs affordable.
- US pharmaceutical companies have used the FDA to restrict manufacturing rules to favor large companies and have used the judicial system to bankrupt competitors.
- US pharmaceutical companies have paid generic companies not to sell their products in the US.
- Medicaid, paid for by taxes, pays millions of dollars to drug companies for high priced medications.
- Asthma medications have been the target of profiteering drug companies. Not a single inhaler is available as a generic. Despite the fact that inhaled medications have been available for over 30 years. The effect on people with this condition is a tremendous burden.
- Drug companies spend about 50% of funds on marketing and only about 20% on drug research. Other advanced countries prohibit marketing prescription medications directly to consumers.
- Medicare is prohibited from negotiating prices.
- Drug prescribing guidelines published by the government are prohibited from considering cost.
Rather than just be angry about the sorry state of drug costs, what can be done? Just take a lesson from other countries, this is not rocket science:
- The US government should set the prices for all drugs
- The FDA needs to loosen the rules for generic manufacturing — for goodness sake, an inhaler is an inhaler, not the space shuttle.
- Comparative effectiveness research should be required, and the results published for doctors as in the UK. Drug cost is important to all US citizens, so restricting the government from considering cost borders on insanity (perhaps giving psychiatric medications to Congress is currently too expensive).
- Finally, there is no excuse for the current drug cost problem — other countries have solved the problem, the US needs to do the same.