In the wake of the much-publicized drug price hikes of common prescriptions such as Mylan’s Epipen and Turing’s Daraprim, patients and doctors alike have been scratching their heads about why drug prices keep increasing. Some reasons may be the rise of the cost of living, corporate greed, or just the facts of supply and demand. Regardless of the reasoning, everyone can agree that drug prices, whether they’re name brand or not, are high in the United States.
In fact, between 2013 and 2015, net spending on prescription drugs by consumers in the United States increased about 20%, according to CNN. Not only have the prices been increasing steadily every year, but nearly all prescription drugs cost about twice as much as other developed nations — meaning drug prices in the U.S. are the highest in the developed world.
To put this into perspective, this blog will analyze the cost of one common arthritis drug, Humira, among several developed nations. As an injectable medication for arthritis, Humira is frequently used to treat patients with rheumatoid arthritis because it’s easy to use and quickly reduces swelling. Other than the U.S., the drug is marketed to 14 other countries.
The numbers below were conducted from a 2015 Bloomberg News analysis, in which SSR Health, which is an investment research firm, used prescription data and list prices to determine Humira’s sales in the U.S. before discounts were applied by insurance companies. To approximate the discounts from insurance companies, SSR Health subtracted the actual sales reported by the companies. Then, Bloomberg compared the average discounted price of a prescription to list prices from 14 other countries, using local data from IHS Inc., a data analysis and consulting firm, and other sources.
The results listed below will surprise you!
So why is there roughly a $2,000 difference in price for the same drug? It all revolves around the country’s regulatory system. Because the U.S. government doesn’t negotiate or regulate prices of prescription drugs, drugmakers can sell their products at whatever price point they choose. Other countries either have government agencies negotiate the price with drugmakers, or the country’s public healthcare system covers the bulk of the cost.
What are your thoughts on this finding?
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