Everyone knows the cost of prescription medications it the US is very high. In fact, there is a whole industry that caters to people that need large or constant quantities of said medication, either due to a person’s age or for health reasons, in order to make them affordable.
But why? Why is prescription medication so expensive in the US? And is there something we can do about it?
There are many reasons that explain why the costs of medications are higher in the US than elsewhere, however, one of the main reasons is a country’s ability to negotiate with the drug manufacturer.
In the US, the drug manufacturers provide drugs directly to consumers. The manufacturer sets the price and the consumer pays (either directly or indirectly through health insurance). In other countries, the manufacturer must go through a few more steps before they can sell their drug to their citizens, one of them is a negotiation between the country and the manufacturer.
During this negotiation, the country will agree to buy the drug in bulk and thus get a better rate. It is only after this negotiation that a consumer can purchase the drug at a pharmacy.
By negotiating directly with the manufacturer, countries have more leverage to get a better price for their citizens. How effective is this negotiation for the consumer? Here is an example:
| Drug Name | US | Elsewhere |
| Advair (Asthma) | ~$300 | ~$30 |
| Janumet (Diabetes) | ~$8 | ~$0.50 |
| Premarin (Hormone) | ~$7 | ~$0.20 |
| Flovent (Asthma) | ~$800 | ~$60 |
| Viagra (Male stuff? :-)) | ~$60 | ~$6 |
And this table is not comparing brand-name vs generics. These are apples to apples comparisons.
What can we do about drug pricing here? We should follow the lead of other countries and have our government negotiate for a better price.
