The High Cost of Prescription Drugs

Many countries need be thankful to the US and other richer nations for something they might not even realize. It�s the cost of prescription drugs. Why? Because most drug companies practice what is known in the industry as a �price gouge�. This practice is worldwide and yes, it�s basically a conspiracy.

Now the big talk is about getting prescription drugs from Canada.
"Representative Bernard Sanders (I-VT) said the newest ads by the pharmaceutical industry are proof that legislation to allow the reimportation of FDA-approved medications from other countries is gaining momentum and has taken center stage in the fierce debate over prescription drugs in Congress. The full-page ads, which ran in the Washington Post on Sunday and Monday, attack Sanders� legislation, using unfounded assertions and scare tactics that ignore the facts surrounding the reimportation issue."

Just look at the price differences:
Prescription Drug Comparison - Compare Drug Prices between the U.S. and Canada

This whole matter prompted me to ask "what's the big deal"? In asking that question, I learned more about this practice of the "price gouge". Have a look at this chart of two popular prescription drugs, Synthroid and Micronase.



Now of course, most of the talk is about senior citizens paying high costs so drug companies can make their huge profits, but there is more. The entire US pays generally higher costs. Why? To cover the expense of Research and Development (R&D). The US and many other countries are "price gouged" the costs of research, so that poorer countries can not only have the drugs, but pay lower costs as well. How many countries are out there that say "what has the United States done for us"? How little they actually know. We pay the high price of being a successful nation and help foot the bill for the world.

Many other countries too, but not quite as much as the United States. Have a look at this comparison:

USA = $1.00
Switz. = 65�
UK = 64�
Germany = 60�
Sweden = 60�
France = 51�
Italy = 49�

"South African Aids patients have been given new hope by pharmaceutical giant GlazoSmithKline announcing that it will cut the price of some antiretrovirals by nearly 50%."

Jean-Pieere Garnier, chief executive of GSK, said: "Our price reduction demonstrates our commitment to making life-saving medicine more affordable through sustainable preferential pricing."

Firm slashes Aids drug prices

"Preferential pricing" = "price gouging"

Discounted pricing for least developed countries (LDCs)
(Cost of daily dose, $)

Fluconazole
USA = $10.00
LDC = 0

Zerit
USA = 9.83
LDC = 0.15

Ziagren
USA = 10.68
LDC = 3.80

Trizivir
USA = 27.92
LDC = 6.60

Agenerase
USA = 18.50
LDC = 8.70

Malarone
USA = 52.71
LDC = 19.20

Source: UN Africa Recovery from UNAIDS data as of 2001.

So poor countries get the medicine they need, and richer countries foot the bill. Is this acceptable? From a humanitarian standpoint sure, but what makes the US or other richer nations responsible for the worlds problems? How many poorer countries think we just stick our nose where it doesn't belong and that the average American does nothing for them? Do they have any idea that we all foot the bill for their medicine?

They claim that we intrude and we should mind our own business. How would they feel if we did mind our own business and the medicine they need was priced so high they could not afford it? Then as their mothers, brothers, and children die...they would come back "help, oh help". I find this an interesting political question.

As for the conspiracy in the matter. That comes from the fact that most average citizens don't know the drug companies make richer nations pay for the world's R&D. The market for drugs in less-developed countries is too small and too poor to support the research and development costs required to create a new drug. (On average it costs more than a half of one billion dollars to create a new drug.) Once a drug has been created, however, production costs are typically low. So long as the price covers production costs, firms can recoup some of their R&D costs by selling drugs at low prices in less developed nations....yet the richer nations still pay more and foot the difference.

Put simply, if firms had to charge a single low price throughout the world there would be no money to spend on R&D and no new drugs. If firms had to charge a single high price throughout the world then consumers in less developed countries could not afford to buy any new drugs, and US and other richer nations would pay 100% of the R&D costs. "Allowing a firm to charge different prices in different parts of the world benefits consumers everywhere" is the belief, but how do I benefit? I pay more? Is that my benefit? And when I travel to a less developed country, they hate me?

Its amazing how compinies that send jobs overseas to save a few bucks and hide behind free enterprise cry foul whan people want to get their drugs from the overseas compinies.

Then its a whole nother story......LOL

I didn't notice any hidden costs in the article. Here, Canada, we pay a dispencing fee, don't know if they do that elsewhere, that can range from 6-7 dollars up to 12-14 dollars. You can actually pay more for the dispencing fee than you pay for the medication.

Well with Pfizer you are basicly screwed if you live in the US and buy drugs in Canada. Current policy states that you, more or less, have no right for information or legal recourse for complains if you break the law with reimportation to begin with. We are all told that anyone suspected of breaking this law is immediately to be transfered to a sub-division of the legal department.

Further more if a Canadian pharmacy is caught selling Pfizer products to US residence, then that pharmacy will have its product shipments either canceled or greatly decreased.

So what is the real reason that Pfizer does this? Well money of course, but as far as the specifics I have heard so many rumors around here that I don't know what to believe about it any more.

Originally posted by intrepid
I didn't notice any hidden costs in the article. Here, Canada, we pay a dispencing fee, don't know if they do that elsewhere, that can range from 6-7 dollars up to 12-14 dollars. You can actually pay more for the dispencing fee than you pay for the medication.

That's the thing. It's not a "hidden cost". It's an open "price gouge". The consumers in the US are charged more to help foot the bill for R&D.

Many people are under the impression that the Government in Canada helps subsidize the cost. Not the case. The costs are cheaper because of the drug companies and the "preferential pricing".

�Dispenser� means a person who dispenses a drug pursuant to a prescription.
It's the stores way of getting a "price gouge" in too. The pharmacist gets the dispensing fee.

Originally posted by ZeddicusZulZorander
�Dispenser� means a person who dispenses a drug pursuant to a prescription.
It's the stores way of getting a "price gouge" in too. The pharmacist gets the dispensing fee.

And that is why you always need to call the different pharmacies in your area to fill a prescription in order to find the best price.

This is a perfect example of why this country needs Libertarians in office.

The soultion is not to raise the prices every where or to lower them in the US, its to allow free trade to where we can buy them from whereever and the market will settle on a fairly standerd price around the woirld.

But it cannot work unless the consumers are giving the same chance as the companies but since the companies are owned by our leaders or they are on there payrolls the chances of this happining are slim

Well, for Americans and other richer nations, what do you think about my statement of:

"Allowing a firm to charge different prices in different parts of the world benefits consumers everywhere" is the belief, but how do I benefit? I pay more? Is that my benefit? And when I travel to a less developed country, they hate me?

We pay more. We help countries that think we mettle and should mind our own business. What if we really did?

Quote by ZZZ: We pay more. We help countries that think we mettle and should mind our own business. What if we really did?

That is a loaded question. Are you helping them with the price of drugs? Yes. The question it begs is what else are you doing to their country that they say "you should mind your own business"?

Maybe one does not offset the other.

Imagine, you buy a new Ferrari and take it out for a drive on a sunny day.
You pull up next to another guy in a Ferrari and begin to discuss them.

You paid $250,000 for your car.
He paid $100,000 for his car which is the same.

The manufacturer wanted to make sales worldwide, so you as the citizen of a richer nation, have to pay the higher price to foot the difference.

That's how it is with the prescription drugs.
The "you can afford it" attitude? Fair?

I find it quite interesting...

This is a topic that is near and dear to my heart! My husband has two prescriptions he takes daily. With insurance for the name brand is $110 for both! Without insurance it over $300! We are relatively "healthy" people. Between meds and insurance we spent over $6000 last year! How seniors do this, I will never know! Something needs to be done in this country about the drug prices and the doctors (especially shrinks!:flame They get you hooked on a med you can't get off of and now the insurance company and the doctor have you by the balls.