Prescription drug prices in the United States

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Prescription drug prices in the United States are the highest in the world. "The prices Americans pay for prescription drugs, which are far higher than those paid by citizens of any other developed country, help explain why the pharmaceutical industry is — and has been for years — the most profitable of all businesses in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue."[1] The high price of prescription drugs is one of the major areas of discussion in the U.S. health care reform debate.

Prices of brand name drugs in the United States are significantly higher than in Canada, India, the UK and other countries, nearly all of which have price controls. Prices for generic drugs tend to be higher in Canada. The price differential for brand-name drugs between the U.S. and Canada has led Americans to purchase more than US$1 billion in drugs per year from Canadian pharmacies.[2]

As an example of the extremely high U.S. drug prices, consider the cholesterol drug Lipitor, one of the best selling drugs in the world. At CVS, a leading U.S. pharmacy, Lipitor (40mg/90 tablets) costs $361.99. At Drugstore.com, another U.S. pharmacy, the same drug costs $335.97. While in Canada at CanadianOnlineRx.com pharmacy, the cost is $215.46, and in India at licensed pharmacy InternationalDrugMart.com, the identical generic drug costs $120.94 (Source: All costs in US$,19 May 2008, from the respective pharmacy websites).

To save money, "U.S. Customs estimates 10 million U.S. citizens bring in medications at land borders each year. An additional 2 million packages of pharmaceuticals arrive annually by international mail from Thailand, India, South Africa and other points," reports the Washington Post.[3] A few years ago, uninsured Americans would often purchase their cheaper medications from Canadian pharmacies. However, today, consumers shop at lower-cost online pharmacies in India, the UK, and other countries where they can save even more money -- up to 60 to 80 percent or more savings off US prices.

Pharmaceutical companies argue that the prices they set are necessary in order to continue to fund research. Only 11% of drug candidates that enter clinical trials are successful and receive approval for sale.[4] Critics of pharmaceutical companies point out that only a small portion of the drug companies' expenditures are used for research and development, with the majority of their money being spent in the areas of marketing and administration.[5]

The AARP has published a series of studies suggesting that prescription drug prices are rising significantly faster than general inflation.[6] The American Enterprise Institute has criticized the methodology used as overstating drug price inflation.[7]

Prescription drug prices, in particular as part of Medicare, have become a political issue in the United States. Critics argue that there is no reason for American consumers to subsidize the low drug prices in other first-world nations.[who?]

Both houses of Congress have passed legislation to permit imports; but the Bush Administration and the FDA are opposed. The anticipated Medicare reforms, expected to pass, include prescription drug coverage under Medicare, and there is some interest in Congress in permitting imports under FDA regulation.[8]

The pharmaceutical industry has thousands of lobbyists in Washington, DC, that lobby Congress and protect their interests. The pharmaceutical industry spent $855 million, more than any other industry, on lobbying activities from 1998 to 2006, according to the non-partisan Center for Public Integrity.[9]

[edit] See also

[edit] References

  1. ^ Why We Pay So Much, TIME magazine, Feb. 2, 2004
  2. ^ Morgan, S.; Morgan, Steven and Hurley, Jeremiah (2004-03-16). "Internet pharmacy: prices on the up-and-up". CMAJ 170 (6): 945–946. doi:10.1503/cmaj.104001. PMID 15023915. http://www.cmaj.ca/cgi/content/full/170/6/945?etoc. Retrieved on 2007-07-11. 
  3. ^ Millions of Americans Look Outside U.S. For Drugs, Washington Post, Oct. 23, 2003
  4. ^ Nature Reviews Drug Discovery, 2004 (3), 711-716.
  5. ^ Why Are Drug Prices So High?, PSC/CUNY
  6. ^ David Gross, Leigh Gross Purvis and Stephen W. Schondelmeyer, "Trends in Manufacturer Prices of Prescription Drugs Used by Older Americans", AARP, March 2007
  7. ^ Joseph Antos and Thomas F. Wildsmith, "Inflated Claims about Drug Prices", American Enterprise Institute, July 8, 2005
  8. ^ New York Times article
  9. ^ Senators Who Weakened Drug Bill Got Millions From Industry, USA Today, May, 10, 2007
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