Why the U.S. Pays More Than Other Countries for Drugs

[jayem]

Nothing we don't already know, but a good summary from the WSJ. There are 2 major reasons:

1) We don't have a unified health insurance system that can negotiate lower prices with drug companies.

2) Other countries consider cost-effectiveness when approving drugs.

Of course, we'd see #2 as a form of the dreaded R-word--rationing. The article also notes the frequently made claim that R & D would be hampered if we controlled prices as other countries do. (I'm very doubtful. I would like to see all the TV, print, and other drug advertising hampered. I think those millions of $$$ can be used for better purposes.)

It's fundamentally an issue of values. Americans are suspicious of regulating economic activity. And we're strongly individualistic regarding health care, and reject anything that even remotely could be considered rationing:

Countries with national health systems tend to feel “we are all in this together” and “we can’t afford everything for everybody at any price,” said Steven Pearson, a physician who founded the Institute for Clinical and Economic Review, a Boston nonprofit that evaluates the cost-effectiveness of health care. “In America it’s more, ‘Well, I’ve paid my insurance premium and I don’t want anyone to tell me no. I don’t want anyone to get in the way of me and my doctor.’ ”

The article--and the user comments after--are a good read.

http://www.wsj.com/articles/why-the-u-s-pays-more-than-other-countries-for-drugs-1448939481

 

[dogs4thewin]

Actually, here there is a such thing as self-rationing ( not that other countries do not have that).

 

[fargonic]

Of course, we'd see #2 as a form of the dreaded R-word--rationing. The article also notes the frequently made claim that R & D would be hampered if we controlled prices as other countries do. (I'm very doubtful. I would like to see all the TV, print, and other drug advertising hampered. I think those millions of $$$ can be used for better purposes.)

There's a high proportion of blockbuster drugs that were actually developed by NIH-funded research which the big pharma companies grab onto, so in a sense we the taxpayers pay for the drug development AND then we get to pay top dollar for the final product and we are told that if we complain the new blockbuster drugs will dry up and we won't have any more.

http://www.citizen.org/documents/ACFDC.PDF

But, hey, why not? Prior to the ACA we paid the most percapita for healthcare of any developed first world nation and we didn't have the top scores on things like longevity or childhood survival rates.

We "value" "fiscal conservative" ideals like pay the most and getting less than the best.

 

[fargonic]

Actually, here there is a such thing as self-rationing ( not that other countries do not have that).

We definitely have "self-rationing" here in the US when seniors have to choose whether to eat or get their drugs to survive.

 

[dogs4thewin]

We definitely have "self-rationing" here in the US when seniors have to choose whether to eat or get their drugs to survive.

No, I am not talking about that. I am talking about cases where for example cancer treatment when someone said for whatever reason that they do not want treatment even if that means that the cancer will kill them sooner rather than later. Same thing with certain transplant cases. For example, I have chosen to not accept a liver transplant if that show mean I die before my 30th birthday then so be it. This would be another example of self-rationing.

 

[fargonic]

No, I am not talking about that. I am talking about cases where for example cancer treatment when someone said for whatever reason that they do not want treatment even if that means that the cancer will kill them sooner rather than later. Same thing with certain transplant cases. For example, I have chosen to not accept a liver transplant if that show mean I die before my 30th birthday then so be it. This would be another example of self-rationing.

I understand, I was just making a point about the horrorshow that is the American greed-based system in which healthcare in general is treated like a "normal market good".

People are free to make whatever choice they want to make. It's when there is no choice that things get bad.

 

[stamperben]

No, I am not talking about that. I am talking about cases where for example cancer treatment when someone said for whatever reason that they do not want treatment even if that means that the cancer will kill them sooner rather than later. Same thing with certain transplant cases. For example, I have chosen to not accept a liver transplant if that show mean I die before my 30th birthday then so be it. This would be another example of self-rationing.

Can't account for any sort of death wish one might have. The vast majority of ill people value their lives and would do whatever they could to prolong it. Unfortunately, as fargonic said, it could be that those who say they don't want treatment forgo it because of the cost of treatment and what going into massive debt would do to their families and loved ones.

 

[dogs4thewin]

I understand, I was just making a point about the horrorshow that is the American greed-based system in which healthcare in general is treated like a "normal market good".

People are free to make whatever choice they want to make. It's when there is no choice that things get bad.

Well, rationing is common sense.

 

[dogs4thewin]

Can't account for any sort of death wish one might have. The vast majority of ill people value their lives and would do whatever they could to prolong it. Unfortunately, as fargonic said, it could be that those who say they don't want treatment forgo it because of the cost of treatment and what going into massive debt would do to their families and loved ones.

It really does not matter why because so long as the person is of sound mind they are free to make whatever decision with whatever motive they choose. That also does not address the issue of people who have living wills; which means that they make that decision PRIOR to becoming deathly ill.

 

[fargonic]

Well, rationing is common sense.

Not when it is unnecessary as it should be for healthcare in the richest nation on earth. If people want to avoid life-saving medical treatment because that is their personal wish then that's one thing. Again, my point is more around involuntary limitations on access to healthcare.

That is unacceptable in this nation.

 

[fargonic]

It really does not matter why because so long as the person is of sound mind they are free to make whatever decision with whatever motive they choose.

Correct. And not in any way part of the conversation here.

That also does not address the issue of people who have living wills; which means that they make that decision PRIOR to becoming deathly ill.

Indeed, living wills are crucial. And, again, not part of the conversation here.

 

[dogs4thewin]

Not when it is unnecessary as it should be for healthcare in the richest nation on earth. If people want to avoid life-saving medical treatment because that is their personal wish then that's one thing. Again, my point is more around involuntary limitations on access to healthcare.

That is unacceptable in this nation.

Well people define "necessary".

 

[bhsmte]

Nothing we don't already know, but a good summary from the WSJ. There are 2 major reasons:

1) We don't have a unified health insurance system that can negotiate lower prices with drug companies.

2) Other countries consider cost-effectiveness when approving drugs.

Of course, we'd see #2 as a form of the dreaded R-word--rationing. The article also notes the frequently made claim that R & D would be hampered if we controlled prices as other countries do. (I'm very doubtful. I would like to see all the TV, print, and other drug advertising hampered. I think those millions of $$$ can be used for better purposes.)

It's fundamentally an issue of values. Americans are suspicious of regulating economic activity. And we're strongly individualistic regarding health care, and reject anything that even remotely could be considered rationing:

Countries with national health systems tend to feel “we are all in this together” and “we can’t afford everything for everybody at any price,” said Steven Pearson, a physician who founded the Institute for Clinical and Economic Review, a Boston nonprofit that evaluates the cost-effectiveness of health care. “In America it’s more, ‘Well, I’ve paid my insurance premium and I don’t want anyone to tell me no. I don’t want anyone to get in the way of me and my doctor.’ ”

The article--and the user comments after--are a good read.

http://www.wsj.com/articles/why-the-u-s-pays-more-than-other-countries-for-drugs-1448939481

I agree the ability to negotiate better pricing is a big piece of this.

With that said, I would frown on any attempt, to remove the benefits of drug companies being motivated to perform the expensive R&D, to produce new drugs, that could have a dramatic impact on controlling disease.

Lastly, in the United States, about 50% of doctor prescribed medicines, are either not filled by the patient, or they are not taken as prescribed if filled. This is a huge issue and has been for a while.

 

[Hetta]

It really does not matter why because so long as the person is of sound mind they are free to make whatever decision with whatever motive they choose. That also does not address the issue of people who have living wills; which means that they make that decision PRIOR to becoming deathly ill.

Having a living will doesn't meant that you are opting not to have life saving treatment, it just expresses how far that treatment will go, amongst other things. I have a living will, but if I needed cancer treatment or transplant, my goodness I would get them.

 

[dogs4thewin]

Having a living will doesn't meant that you are opting not to have life saving treatment, it just expresses how far that treatment will go, amongst other things. I have a living will, but if I needed cancer treatment or transplant, my goodness I would get them.

that is what I am saying that one may put in his or her living will how far that treatment will go. That could mean ANYTHING from the will saying that you do not want to "live" on a machine all the way to writing that you do not want ANY treatment if you cannot consent.

 

[Hetta]

that is what I am saying that one may put in his or her living will how far that treatment will go. That could mean ANYTHING from the will saying that you do not want to "live" on a machine all the way to writing that you do not want ANY treatment if you cannot consent.

That's what I just said.

 

[dogs4thewin]

That's what I just said.

You just said that having a living will does not mean you get no treatment, so I thought you were implying that that is what I thought and I was clearing up that was not the case.

 

[jayem]

With that said, I would frown on any attempt, to remove the benefits of drug companies being motivated to perform the expensive R&D, to produce new drugs, that could have a dramatic impact on controlling disease.

No argument there. But there was a WP piece earlier this year claiming that in 2013, 9 of the 10 biggest US drug companies spent more on sales and marketing than on R & D.

https://www.washingtonpost.com/news...spending-far-more-on-marketing-than-research/

I don't know if these numbers include clinical trials, which are really the big ticket expense. (And I assume it doesn't include NIH, private charitable, and other funding.) But adding them all up, these 10 drug makers spent just over $66B in R & D in 2013. Which doesn't sound like that much. I've heard a proposal that all drug and medical device development be publicly funded. The government would own the patents. The drug makers' role would be limited to manufacture and sales, and they would bid competitively for the licenses to do this. This would free them from R & D costs. I haven't studied it enough to how much extra taxes would be needed to publicly fund all pharmaceutical research. It may not be feasible or politically possible. But it's an interesting suggestion.

 

[fargonic]

.....

 

[bhsmte]

No argument there. But there was a WP piece earlier this year claiming that in 2013, 9 of the 10 biggest US drug companies spent more on sales and marketing than on R & D.

https://www.washingtonpost.com/news...spending-far-more-on-marketing-than-research/

I don't know if these numbers include clinical trials, which are really the big ticket expense. (And I assume it doesn't include NIH, private charitable, and other funding.) But adding them all up, these 10 drug makers spent just over $66B in R & D in 2013. Which doesn't sound like that much. I've heard a proposal that all drug and medical device development be publicly funded. The government would own the patents. The drug makers' role would be limited to manufacture and sales, and they would bid competitively for the licenses to do this. This would free them from R & D costs. I haven't studied it enough to how much extra taxes would be needed to publicly fund all pharmaceutical research. It may not be feasible or politically possible. But it's an interesting suggestion.

The reason that they have been spending so much on marketing, is because there is a reality today, that didn't exist years ago. That is, people educate themselves about their health conditions and go into their doctor, asking about certain medicines. It only makes sense, the drug companies want patients to be very aware of their medicines. It wasn't long ago, that this was not the case.