Overdosing on Drug Costs

An article about counterfeit drugs in AARP’s daily e-letter got me thinking about all of the scams that are perpetuated on the elderly, and also about how much my pills for high blood pressure and cholesterol are costing me these days, even with a co-pay. The simple fact is that prescription drugs are cheaper in other countries. A Wall Street Journal article, among several published in the last few months, pinpointed the problem: “drug prices in the U.S. are shrouded in mystery, obscured by confidential rebates, multiple middlemen and the strict guarding of trade secrets.”

One portal where drug pricing can be compared is Medicare Part B, where the prices are public. The WSJ found that U.S. prices were higher for 93% of 40 top branded drugs available in Norway. Similar patterns appeared when compared with those in England and Canada’s Ontario province.

Unlike other countries, Medicare, the largest single U.S. payer for prescription drugs, is not allowed by law to negotiate pricing; essentially forfeiting its buying power and leaving the negotiations to doctors’ office with limited leverage. Also, the prevailing sentiment in countries with national health systems, according to one expert, is that they can’t afford everything for everybody at any price. In the U.S., the prevailing thought is just the opposite and akin to walking into a Burger King and having it your way.

One new potential solution to lower costs in the U.S.: paying for drugs according to how well they actually work. This past summer a doctor and his colleagues at Memorial Sloan Kettering Cancer Center in New York City stirred the pot by introducing the DrugAbacus, an online calculator which, according to Wired Magazine, compares present-day costs for dozens of cancer drugs with theoretical prices determined by adjustable variables such as side effects, R&D costs, predicted years of life added, and the number of people each drug could help.
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Learn more:
http://www.wsj.com/articles/why-the-u-s-pays-more-than-other-countries-for-drugs-1448939481
http://www.drugabacus.org/drug-abacus-tool
https://hbr.org/2015/10/a-new-way-to-define-value-in-drug-pricing
http://www.wired.com/2015/12/rising-drug-costs