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View Full Version : Why are prescription drugs expensive here and cheap around the world?




Knightskye
12-09-2009, 03:35 PM
YouTube - Sen. Dorgan Reads from Flomax, Lunesta Ad Scripts on Senate Floor (http://www.youtube.com/watch?v=O6N4YIO0_8w)

There is a bunch of Democrats using a chart that shows the cost of Nexium, a prescription drug. It shows $33 for Canada but $424 for us.

I remember in "Sick in America," John Stossel talked to a doctor who had his own price list, and they talked specifically about Nexium. The doctor said, why not take Zantac, which only costs $5 a month (or something like that) instead of Nexium that was a lot more.

And I know it has something to do with the FDA regulations on approving drugs for use by consumers, and the billions of dollars of R&D money it takes to get a drug onto the market.

What other reasons are there?

Brian4Liberty
12-09-2009, 03:39 PM
Insurance (removes customer from the pricing decision) and price fixing (a joint effort of insurance, drugs companies and government).

RonPaulVolunteer
12-10-2009, 04:14 PM
American-style insurance. Which, isn't, insurance, of course.

Dr.3D
12-10-2009, 04:18 PM
I would guess it is because of the FDA. They usually seem to be the problem.

tangent4ronpaul
12-13-2009, 12:40 AM
There is a bunch of Democrats using a chart that shows the cost of Nexium, a prescription drug. It shows $33 for Canada but $424 for us.

I remember in "Sick in America," John Stossel talked to a doctor who had his own price list, and they talked specifically about Nexium. The doctor said, why not take Zantac, which only costs $5 a month (or something like that) instead of Nexium that was a lot more.

And I know it has something to do with the FDA regulations on approving drugs for use by consumers, and the billions of dollars of R&D money it takes to get a drug onto the market.

What other reasons are there?

I'll give your question a try. First off, frug companies spend 20% of their revenue on R&D and 20% on advertising. As Americans, we spend more on drugs than anyone else in the world, and use more drugs, per person than anyone in the world. As far as I know, every other country bans drug advertising.

The FDA regulations are written such that they don't allow importation of non-US based drug company drugs. Big Pharma lobbied for this, as they did to fight re-importation of drugs from other countries like Canada, who negotiated and got a better price and for things like shelf lives that are years shorter then the life of the drugs (so they have to legally be tossed if they haven't sold) and fighting insurance companies and the government negotiating to lower drug prices here.

OK, lets talk about Prilosec and Nexium. When a new drug is approved, the Pharma company is given monopoly rights to manufacture and sell it for so many years, 12 IIRC. AstraZenica invented Prilosec and it's patent was running out, so they took the Prilosec molecule and "tricked it up" / changed it a bit and VIOLA! - a new drug was born, called Nexium! that could get a brand new patent. This process is known as "evergreening". Prilosec then went generic - meaning that anyone could manufacture and market it. It also went from it's Rx status to OTC.

The dirty little secret:
===============
I'm sure everyone has seen the TV ads claiming that Nexium is more effective than Prilosec and *technically* they are not lying. They in fact did a clinical study that showed a slight advantage in esophageal healing with Nexium over Prilosec. What they aren't telling you is that slight advantage didn't show up until after 65 days and only lasted a few days. They also are not telling you that this was the fourth study. The first three didn't give them the results they wanted, so they buried them. Yes, that is the entire basis for their claims that Nexium is a superior drug.

This isn't the first time either. Earlier this year, whey were on the wrong end of a 9,000 person class action lawsuit where they buried 3 studies too, though did cherry pick some results from one of them. It seems they neglected to tell anyone that their anti-psychotic drug Seroquel can cause diabetes and other health problems...

Why would a drug company do something like this? Well, lets look at some history. Back around 1960, drug companies did their own R&D / testing / approval and brought a drug to market when they were sufficiently satisfied that it was safe and they wouldn't be hit with tons of lawsuits. It generally took 2 years from invention to market and cost in the low thousands. Drugs were also CHEAP! Then the federal government decided that they needed to regulate the industry and approve drugs... (I think you know where I'm going with this). Other countries followed their lead. Approval times and costs got longer and larger, year by year. More hoops and steps to go through - all to "keep us safe"... :rolleyes: Now approval times because of testing / approval are often over a decade and this costs millions or more likely tens of millions. Big Pharma uses R&D costs / risk as an excuse to charge outrageous amounts for new drugs under patent. When they go generic, they get cheap. With that much at risk, both in time and money and the potential for billions in returns - is it any wonder that drug companies resort to these tactics?

There are a few ethical pharma companies - Merck is one, but in general they are scum.

On your prices - for a bottle of 100, OK - but per pill - move the decimal point over 2 places.

As to your primary question: Why are prescription drugs expensive here and cheap around the world? There are a number of reasons. Specifically:

Why are drugs expensive here? - See above, I think I answered that.

In the non-US developed world, drugs are still expensive - but less so. This is largely due to most of these countries being socialistic and there is an incredible difference in price between going to a MD to get a Rx, then to the pharmacist and filling an order for 30 pills vs a country going directly to the sellier and saying we'd like X Million doses and this is what we are willing to pay.

The seperation of MD and pharmacist in this country came about at the dictate of the US gvmt in the early 1900's. It was thought that the person prescribing and profiting from the sale was a conflict of interest. This argument has a bit of merit. In Mexico and South America, it is common for the pharmacist to Dx and sell a drug based on a verbal description of what is ailing the person. Generally everything is OTC, though due to US pressure relating to the "war on drugs", narcotics are restricted many places. In any event, sometimes the drug that will line the pharmasists pocket the most is the one that is recommended. There is also the matter of standards and training. I've heard of oxytocin being displayed in pharmacy windows. It's heat and light sensitive.

In the developing world they get drugs cheap... why?

For one, most countries follow the WHO essential drugs guidelines. That generally means, with the exception of certain AIDS and other specialty drugs, like for river blindness, *NO* drugs that are under patent. For the few that are under patent - they generally beg, and the drug companies generally give them to them - for PR value.

http://www.who.int/medicines/publications/essentialmedicines/en/

Secondly, they buy as a country or a NGO, in bulk and negotiate - getting deep discounts. There are non-profit organizations that buy in even bigger bulk quantities and sell to NGO's and countries for cost.

Third, They buy drugs from countries like India, Indian drugs are good and effective - but they patent the synthesis, not the molecule. That cuts out R&D costs. Like China, Russia, France and Israel, industrial espionage is more cost effective - though in this case they just reverse engineer the molecule and figure out how to make it. This flies in the face of our patent system.

Forth, they don't have our asinine drug expiration policies. Many, if not most drugs are good for 15 to 20 years. "Good" is defined as maintaining 90 or 95% potency. Obviously, a 80% effective drug is just as effective if given in overage. So degraded drugs could still be good 50 or even 100 years post manufacture. In the US no drug can get a shelf life past 5 years. Big Pharma likes it this way. They make tons of money off of replacing unsold drugs or drugs from stockpiles that have to be thrown out due to expiration dates. They lobbied for this!

Fifth, drug companies will donate drugs coming up for expiration to NGO's for the tax write off and PR.

If you want to make drug prices drop like a rock in this country - do 4 things: 1) open up import to foreign drugs. 2) Abolish the FDA. 3) Abolish the DEA. 4) re-evaluate expiration dates.

Once again, the problem is the federal government.

There are a few drugs that actually have short lifespans - and unfortunately, most are emergency drugs. Only 2 or 3 become "harmful" post expiration.

Today, the rule of the day is as much as the market will bare. That is why drugs are so expensive. Our system is corrupt. They can buy legislation that is favorable to their profits.

-t

fletcher
12-13-2009, 01:49 AM
Not sure if anyone answered this correctly yet, but the simple answer is price controls. They are not allowed by law to charge over a certain amount in many countries.

Andrew-Austin
12-13-2009, 04:58 AM
Because all of the absurd amounts of testing they have to do in order to be allowed to sell it by the FDA.

Nate K
12-13-2009, 11:51 AM
What would happen to prices and the industry if we did away with all forms of intellectual property?

angelatc
12-13-2009, 12:31 PM
There is a bunch of Democrats using a chart that shows the cost of Nexium, a prescription drug. It shows $33 for Canada but $424 for us.

I remember in "Sick in America," John Stossel talked to a doctor who had his own price list, and they talked specifically about Nexium. The doctor said, why not take Zantac, which only costs $5 a month (or something like that) instead of Nexium that was a lot more.

And I know it has something to do with the FDA regulations on approving drugs for use by consumers, and the billions of dollars of R&D money it takes to get a drug onto the market.

What other reasons are there?

We subsidize the socialism. When a new drug is introduced the Canadian government does not care about anything except how much it wil cost. They tell the manufacturer that they will pay $33 for the pill.

The maufacturer says, "OK - we'll just stick the other $200 cost on to the American sales." :(

Kbeaubs
12-13-2009, 12:42 PM
We subsidize the socialism. When a new drug is introduced the Canadian government does not care about anything except how much it wil cost. They tell the manufacturer that they will pay $33 for the pill.

The maufacturer says, "OK - we'll just stick the other $200 cost on to the American sales." :(

That's exactly right. It's a shameless form of welfare.

Little does Canada care that it in reality reduces further R&D and literally costs them more in the long run because of it.

Further global demise of capitalism makes for poorer health care globally. How we ever got to a point where making profits as a private company is evil is beyond me.