8 Prescription Drugs That Cost Way Too Much in America
Prescription medications are the most costly aspect of health care for many Americans. Overall, the U.S. spends nearly $1,000 per person per year on pharmaceuticals, according to the Organization for Economic Cooperation and Development (OECD). This makes the U.S. by far the world’s biggest drug spender, shelling out 40% more each year than Canada, the next highest-spending country. Why the large disparity? Americans tend to take more medications than people in other developed countries, and the drugs themselves are priced much higher.
A 2014 study by AARP found that the retail prices of brand name prescription drugs increased faster than the rate of inflation from 2006 to 2013, and the gap between the two continues to widen. Pharmaceutical prices surged at a rate of 12.9% in 2013, more than eight times faster than the 1.5% general inflation rate.
Gleevec is a popular cancer medication and one of the drugs you’ll find on the following list. Not only is Gleevec much more expensive in the U.S. than abroad, according to a recent 60 Minutes special titled “The Cost of Cancer Drugs,” but the price of the drug keeps climbing in the U.S. There are several drugs like it now available, yet the price of Gleevec tripled from $28,000 a year in 2001 to $92,000 a year in 2012.
One of the big problems identified in the 60 Minutes report was the absence of negotiation on the prices of cancer medications. So here you have the drugs that patients are most desperate to purchase, no matter how high the cost, and drug manufacturers have complete control over setting the prices. Medicare is also forced to pay exactly what the drug company decides to charge in these cases. There are no price negotiations with any government or regulatory bodies, as is typical in other countries.
For years, Big Pharma has leaned on its R&D defense, saying high prices are necessary because of the high cost of funding the development of new medications, which largely happens in the U.S. However, this excuse has been widely criticized for a number of reasons. PhRMA, the industry’s lobby group, claims drug companies spent an estimated $48.5 billion on R&D in 2012, but these figures have been called into question. Numerous factors went unaccounted for in the group’s 2013 study, most notably the fact that about one in 10 of these so-called “new drugs” are actually minor variations or “me-too” drugs that cost less to produce and are nonetheless priced high.
It’s true that the U.S. is an attractive market for releasing new drugs, as there are minimal price regulations and drugs can go to market very quickly after FDA approval. However, the out-of-control prices seen in the U.S. are hurting patients. A 2013 survey from the Commonwealth Fund showed that approximately one in five U.S. adults failed to fill a prescription or skipped doses because of the high costs of medicine. In Germany, Canada, Australia, and several other countries, the ratio was less than one in 10. This is likely due to universal health care availability in foreign countries and the use of price controls. While the U.S. pushes new and expensive drugs relatively quickly, other countries in the OECD require strict evidence of value in relation to cost, and then prices are negotiated accordingly.
In its 2013 Comparative Price Report, the International Federation of Health Plans (IFHP) compiled data covering differences in health care prices by country, including common medical procedures, average hospital visits, and pharmaceutical drugs. According to the IFHP, “Prices in the U.S. are based on prices negotiated between private health plans and health care providers.” Previously, we looked at nine common medical procedures that cost way too much in America.
Here are eight common and specialty prescription drugs that are significantly cheaper outside the U.S., based on data provided by the IFHP report. For each drug, we list the average price in America, followed by the highest average price among the other countries surveyed, and finally the lowest price. Drug prices vary within the U.S. as well, where the 95th percentile price is often more than double the average.
- Average price in America: $2,225
- Average price in Canada: $1,646
- Average price in Switzerland: $1,017
- Prescribed to treat: Autoimmune diseases
- Average price in America: $6,214
- Average price in Switzerland: $3,633
- Average price in New Zealand: $989
- Prescribed to treat: Certain cancers, including some types of leukemia
- Average price in America: $2,246
- Average price in Canada: $1,950
- Average price in Switzerland: $881
- Prescribed to treat: Rheumatoid arthritis
- Average price in America: $3,903
- Average price in Switzerland: $1,357
- Average price in England: $862
- Prescribed to treat: Multiple sclerosis
- Average price in America: $5,473
- Average price in Canada: $2,541
- Average price in Spain: $2,287
- Prescribed to treat: Multiple sclerosis
- Average price in America: $225
- Average price in Spain: $164
- Average price in Canada: $51
- Prescribed to treat: Pain
- Average price in America: $194
- Average price in Canada: $110
- Average price in England: $46
- Prescribed to treat: Depression, anxiety, and fibromyalgia
- Average price in America: $215
- Average price in Switzerland: $60
- Average price in Netherlands: $23
- Prescribed to treat: Acid reflux